Devon County Council is facing a second judicial review this year into how much it pays private care home providers.
Three members of Devon Quality Care Forum (DQCF) were granted permission for a judicial review into the way the council determined the fees it will pay providers to care for residents in 2012/13.
The review, which started yesterday at Cardiff Administrative Court, comes after a High Court judge ruled in May the council had failed to consult properly over fees for care home operators' services.
The three members involved in the legal process represent the operators: South West Care Homes Ltd; South West Residential Homes Ltd, a subsidiary of South West Care Homes Ltd; Forde Park Care; and Chartbeech Ltd. Apart from Chartbeech Ltd. They were all involved with the first judicial review along with two other operators.
According to the grounds on which the court granted the review, Devon County Council failed to lawfully consult with care providers during its decision-making process.
The authority also failed to meet its Public Sector Equality Duty by properly considering how its actions would impact on vulnerable groups, and its decision-making process was irrational and based on inaccurate figures.
The third ground was allowed after an appeal by the members, following the judge's initial decision to allow the review on the first two grounds only.
The Equality and Human Rights Commission has been granted permission to appear at the hearing and clarify the equality and human rights law to the court.
Alan Beale, managing director of South West Care Homes and DQCF member, said: "Although we are pleased that the Court has granted permission for a second judicial review, we are disappointed that a second court case is necessary, because we have tried extremely hard to engage with DCC to resolve the ongoing issues.
"We are particularly disappointed that, despite the outcome of the first judicial review in which the judge ruled that DCC's consultation process was unlawful, the claimants have succeeded in proceeding to a second judicial review using the same grounds.
"Even though DCC offered an increase for this financial year, this follows two consecutive years of fee freezes and we continue to hear from our members that providing high quality care is incredibly difficult given the level of fees paid for local authority residents."
A Devon County Council spokesman said: "We are disappointed that after receiving a 6.6% rise in fees this year, these few home owners continue a costly legal dispute that we can ill-afford and that detracts from the business of meeting the care needs of vulnerable people in Devon.
"We believe that we have acted sensibly and fairly in determining fee levels and will contest the case vigorously.
"We will, of course, abide by any decision from the court," the spokesman added.