ON APPEAL FROM HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
THE HONOURABLE MR JUSTICE TURNER
Strand, London, WC2A 2LL |
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B e f o r e :
THE RIGHT HONOURABLE LORD JUSTICE LONGMORE
and
THE RIGHT HONOURABLE LORD JUSTICE KITCHIN
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DAVID KREBS | ||
Appellant | ||
- and - | ||
NHS COMMISSIONING BOARD (AS SUCCESSOR BODY TO SALFORD PRIMARY CARE TRUST) | ||
Respondent |
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Mr David Lock QC (instructed by Hill Dickinson) for the Respondent
Hearing dates: 13th November 2014
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Crown Copyright ©
Lord Justice Longmore:
Introduction
The background
"9. In complying with this Contract, in exercising its rights under the Contract and in performing its obligations under the Contract, the Contractor [here, Dr Krebs] must act reasonably and in good faith.
10. In complying with this Contract, and in exercising its rights under the Contract, the PCT must act reasonably and in good faith and as a responsible public body required to discharge its functions under the Act.
11. Clauses 9 and 10 above do not relieve either party from the requirement to comply with the express provisions of this Contract and the parties are subject to all such express provisions.
…
197. The Contractor shall ensure that any dental practitioner performing services under the Contract –
…
197.2 co-operates with an assessment by the NPSA when requested to do so by the PCT [It is agreed that NPSA and NCAS are the same entity]
…
329. Where the Contractor has breached the Contract … and the breach is capable of remedy, the PCT shall, before taking any action it is otherwise entitled to take by virtue of the Contract, serve a notice on the Contractor requiring it to remedy the breach ("remedial notice").
330. A remedial notice shall specify-
330.1 details of the breach;
330.2 the steps the Contractor must take to the satisfaction of the PCT in order to remedy the breach; and
330.3 the period during which the steps must be taken ("the notice period").
331 The notice period shall, unless the PCT is satisfied that a shorter period is necessary to –
331.1 protect the safety of the Contractor's patients; or
331.2 protect itself from material financial loss,
be no less than 28 days from the date that notice is given.
332. Where the PCT is satisfied that the Contractor has not taken the required steps to remedy the breach by the end of the notice period, the PCT may terminate the Contract with effect from such date as the PCT may specify in a further notice to the Contractor."
"The purpose of NCAS is to improve patient safety by helping to resolve concerns about the professional practice of doctors, dentists and pharmacists. We provide expert advice and support, clinical assessment and training to the NHS and other health care partners (see http:/www.ncas.nhs.uk)."
"Regulations may provide that a health care professional of a prescribed description may not perform any primary dental service for which the Board is responsible unless he is included in a list maintained under the regulations by the Board."
At the relevant time the relevant regulations were the National Health Service (Performers List) Regulations 2004 ("the 2004 Regulations"). They required performers, who applied to be on the DPL, to give undertakings as set out in regulation 3. Regulation 3(3) included an
"undertaking to co-operate with an assessment by the NCAS when requested to do so by the Primary Care Trust"
The facts
1) as early as 2008 concerns had been raised about Dr Krebs' practice in relation toa) poor diagnosis and treatment;b) poor record keeping; andc) potentially excessive claims for remuneration;2) on 2nd June 2009 the defendant's Associate Director of Professional Support, Mr Alan Berry, informed Dr Krebs of concern about
a) administration, claims and treatment planning; andb) performanceand invited a response to tabulated particulars of that concern;3) Dr Krebs' response failed to deal with all those concerns;
4) Dr Krebs agreed that Mr Mike Wanless, the Educational Programme Director of the local Deanery, should work with him to support "remediation" and "continuing professional development";
5) in March 2011 Mr Wanless reported that Dr Krebs had failed to embrace change;
6) on 15th August 2011, in response to a proposed visit to analyse further his treatment claims data and notes, Dr Krebs told Mr Berry that he would not release any more patient cards until "you have established a reasonable justification". Clauses 211 and 212 of his contract, however, obliged Dr Krebs to produce (or allow the defendant to have access to) patient records;
7) on 14th October 2011 the defendant gave Dr Krebs a "remedial notice" to grant access to his records for a Records Case Review within 28 days. If that were not done, the defendant was threatening to issue a termination notice which would have ended Dr Krebs' contract;
8) on 15th November 2011 the defendant issued that further notice and referred for the first time to an NCAS assessment. Dr Krebs in a letter written by solicitors instructed by him purported to welcome a visit by NCAS but, in the event, as a result of a visit to Dr Krebs by Dr Johnson, a Clinical Advisor to the defendant, on 9th January 2012 it was decided that, in respect of Dr Krebs' failure to grant access to records, "termination of the contract would be a disproportional response to the breach of the remedial notice";
9) following his visit Dr Johnson produced a report which was highly critical of Dr Krebs' performance in his practice. This resulted in the defendant informing Dr Krebs on 13th March 2012 that he had been referred to the NCAS for assessment;
10) Dr Krebs then decided to consult solicitors who, on his behalf, declined to co-operate with the NCAS;
11) on 14th August 2012 the defendant served a second "remedial notice" saying that Dr Krebs' refusal to engage with the NCAS assessment was a breach of clause 197 of his contract which required to be remedied within 28 days;
12) it was not so remedied and notice of termination was served on 27th September 2012 to take effect on 31st October 2012;
13) on 2nd October 2012 the defendant gave notice to Dr Krebs of a reference to the NHS Salford Lists and Contracts Panel (the Panel) to consider his removal from the DPL on the basis that his failure to comply with the remedial notice of 14th August gave rise to serious doubts about Dr Krebs' clinical competence;
14) on 29th October Dr Krebs' solicitors threatened to begin High Court proceedings for declarations that both the remedial notice of 14th August and the termination notice of 27th September were unreasonable and disproportionate and for an injunction to restrain the defendant from transferring patients to another practitioner. On 7th November they issued and served a claim form claiming (inter alia) declarations and other relief. The defendant then instructed its own solicitors, who said on 8th November:-
"The PCT does not currently intend to terminate your client's … contract until such time as the dispute between the parties is resolved. Should our client's position change we will provide you with reasonable notice."The envisaged "dispute" was presumably the dispute whether the notice of termination of 27th September was a good notice.15) on 15th November the Panel decided to remove Dr Krebs' name from the DPL, but that removal was stayed pending any appeal to the First Tier Tribunal.
1) The fact that the claimant had changed his position at the FTT hearing reinforced the defendant's view that it had been reasonable for him to be required to co-operate in the first place and that his High Court proceedings lacked substantial merit;2) The defendant continued to entertain serious concerns over the quality of treatment provided by the claimant and the appropriateness of his applications for payment; and
3) The claimant had taken a deliberate decision not to comply with a lawful requirement to undergo an NCAS assessment in spite of the clear terms of the remedial notice.
The submissions
The letter of 8th November 2012
Clause 10 of the contract; the law
"… the exercise of judicial control of administrative action is an analogy which must be applied with caution to the assessment of whether a contractual discretion has been properly exercised … In my judgment the authorities show that not only must the discretion be exercised honestly and in good faith, but, having regard to the provisions of the contract by which it is conferred, it must not be exercised arbitrarily, capriciously or unreasonably."
See Abu Dhabi National Tanker Co v Product Star Shipping Ltd [1993] 1 Lloyds Rep 397, 404.
Reasonableness in fact
"i) The claimant had repeatedly demonstrated a disinclination (for whatever reason) to abide by the clearest terms of his contract;
ii) The claimant had, on occasion, either disengaged from the legitimate contractual process or imposed conditions upon compliance which were unjustified;
iii) The claimant had previously indicated his unqualified enthusiasm for an NCAS assessment only later to recant for no adequate reason;
iv) The defendant had shown a considerable degree of indulgence during the period leading up to the service of the termination notice and beyond. The history of the process and the reasons behind the decisions and suggestions made were set out in correspondence repeatedly and meticulously;
v) The issue of central importance was not just one of contractual discipline but extended to the welfare of patients which was potentially put at risk by the defendant's continued non-compliance."
These are all very telling points which Mr Butler's submissions did nothing to contradict. They are essentially findings of fact made by the judge after hearing Dr Krebs give evidence and were open to the judge on the totality of the evidence he heard.
Public law issues
"If the causes of action based on contract are rejected the other causes of action will only constitute attempts to obtain, by the declaration sought, specific performance of a non-existent contract. The exploitation and extension of remedies such as judicial review beyond their proper place should not be encouraged."
This dictum has recently been applied by this court in Hampshire County Council v Support Wave Community Services Ltd [2006] EWCA Civ 1035 para 45 as pointed out by the judge in para 72 of his judgment.
Article 1 of the Protocol 1
"Every natural or legal person is entitled to the peaceful enjoyment of his possessions. No one shall be deprived of his possessions except in the public interest and subject to the conditions provided for by law."
Conclusion
Lord Justice Kitchin:
The Chancellor (Sir Terence Etherton):