Appeal Court Ruling gives NHS Practices better Contract Security
Following a judgement in the Court of Appeal delivered on the 10th. December 2008, the imbalance in the David and Goliath relationship between PCTs and their PDS contracted dental practices has reduced slightly.
The judgement relates to the case of Crouch v South Birmingham PCT, which was previously decided in favour of Mr. Crouch by Mr. Justice Collins sitting in the Administrative Court. The British Dental Association was also represented as an interested party.
The subject of the case concerned paragraph 67 of schedule 3 to the NHS PDS Agreement Regulations 2005, which states –
67 (1) The relevant body (PCT) may terminate the agreement by serving notice on the contractor at any time.
(2) Where a notice is served pursuant to sub-paragraph (1), the agreement shall terminate on the date provided for in the agreement.
Although a rare occurrence, there have been instances of PCTs seeking to arbitrarily terminate PDS contracts without a specified cause, as stipulated in the contract, probably as a result of financial constraints or a change in policy priorities.
The case was appealed by the Secretary of State, a decision apparently prompted either by a desire to establish a definitive ruling, or, more perversely, a wish to show support for the PCTs in their role as financial intermediaries between the Department of Health and independent dental practices. Dismissing the appeal, the Appeal Court determined that the right of a PCT to terminate a PDS contract by notice is not a “standalone” right, and paragraph 67 is merely a procedural provision to be read in conjunction with other provisions in the Agreement which relate to specified causes allowing a termination by notice – i.e., the contracted practice is in breach of its obligations in some form (dishonesty, misconduct, unsuitability etc.).
The ruling makes clear that the PCT does not have the power to unilaterally terminate a PDS contract without cause. Notice can only be served when a specific cause can be identified as stated in the Agreement.
Contract law is not a subject which many dentists would consider ideal bedtime reading, and fortunately most PDS contracts are executed without undue conflict between the parties. Nevertheless, as with the revision of any longstanding business relationship, the ‘new’ dental contract will inevitably require legal clarification on occasion as points of contention arise.
In this instance at least, NHS dentists can be confident that their livelihoods will not be jeopardised at the whim of a paymaster whose priorities may change during the course of their PDS contracts.
For more information please contact Ray Goodman on 0151 707 0090 or email [email protected]