QUEEN'S BENCH DIVISION
33 Bull street
Birmingham B4 6DS)
B e f o r e :
| (1) Primary Health Investment Properties Ltd
(2) Primary Health Properties plc
(3) Dr N.B. Turnbull, Dr V.L. Beveridge,
Dr R.A. Elder, Dr I.M. Wheatley
|- and -
| (1) The Secretary of State for Health & others
(2) The National Health Service Litigation Authority Family Health Services Appeal Unit
|- and -
|Lincolnshire South West Trust NHS Teaching Primary Care Trust
Mr. J. Herberg (instructed by Solicitor to the Department of Work & Pensions ) for the 1st Defendant
Mr. P. Coppel (instructed by Bevan Brittan, solicitors) for the 2nd Defendant
The Interested Party was not represented
Hearing dates: 3 – 10 February 2009
Crown Copyright ©
Mr. Justice McCombe:
"If following the agreement or determination of the New Rent on any relevant Review Date or calculation of the Substituted Rent pursuant to clause 21 hereof the New Rent first receivable (having made the Retention) is less than the Rent receivable (having made the Retention) prior to the relevant Review Date then the retention determined in accordance with Clause 60.1 hereof shall be decreased by such amount to ensure that the New Rent (less the Retention) following any Relevant Review Date is not less than the Rent (less the Retention) prior to such Review Date,"
(B) The Agreements and the Statutory Background
"Where premises costs are payable to the Contractor [i.e. the Doctors] these are included from [sic] the annual contract price and paid separately in accordance with the equivalent provisions of the SFE part 5 (existing premises development) and the National Health Services (General Medical Services – Premises Costs)(England) Directions 2004 "
"Leasehold premises' rental costs
31. Subject to the following provisions of this Part, where
(a) a contractor which rents its practice premises makes an application to its PCT for financial assistance towards its rental costs; and
(b) in the case of rental costs arising under a lease agreed or varied on or after 1st April 2004, the PCT is satisfied (before the lease is agreed or varied), where appropriate in consultation with the District Valuer, that the terms on which the new or varied lease is to take effect represent value for money the PCT must consider that application and, in appropriate cases (having regard, amongst other matters, to the budgetary targets it has set for itself), grant that application.
Amount of leasehold premises' rental costs payable
32. If a PCT does grant the application, subject to the following provisions of this Part, the amount that it must pay in respect of a contractor's rental costs for its practice premises is
(a) the current market rent for the premises; or
(b) the actual lease rent for the premises, plus any Value Added Tax payable by the contractor if this is properly charged to the contractor by the landlord, whichever is the lower amount.
Current market rents
33. The amount of the current market of leasehold premises, is to be determined in accordance with Parts, 1 and 2 of Schedule 2. However, having regard to the fact that current market rent levels in some areas of deprivation may be too low to provide
(a) sufficient returns to support new capital investment in practice premises; or
(b) sufficient support for existing premises that meet the minimum standards set out in Schedule 1, PCTs may in such circumstances increase the amount they would otherwise pay as the current market rent of practice premises by applying an appropriate uplift factor (as provided by the Valuation Office Agency)."
"93. Local resolution of agreement disputes
(1) … in the case of any dispute arising out of or in connection with the agreement, the contractor and the relevant body must make every reasonable effort to communicate and cooperate with each other with a view to resolving the dispute, before referring the dispute for determination in accordance with the NHS dispute resolution procedure (or, where applicable, before commencing court proceedings).
94. Dispute resolution: non-NHS contracts
95. NHS dispute resolution procedure
(1) Subject to sub-paragraph (2), the procedure specified in the following sub-paragraphs and paragraph 96 applies in the case of any dispute arising out of or in connection with the agreement which is referred to the Secretary of State –
(a) in accordance with section 4(3) of the 1990 Act (where the agreement is an NHS contract); or
(b) in accordance with paragraph 94(1)) where the agreement is not an NHS contract).
(3) Any party wishing to refer a dispute as mentioned in sub-paragraph (1) shall send to the Secretary of State a written request for dispute resolution which shall include or be accompanied by –
(a) the names and addresses of the parties of the dispute;
(b) a copy of the agreement; and
(c) a brief statement describing the nature and circumstances of the dispute.
(4) Any party wishing to refer a dispute as mentioned in sub-paragraph (1) must send the request under sub-paragraph (3) within the period of three years beginning with the date on which the matter giving rise to the dispute happened or should reasonable have come to the attention of the party wishing to refer the dispute.
(5) Where the dispute relates to an agreement which is not an NHS contract, the Secretary of State may determine the matter himself or, if he considers it appropriate, appoint a person or persons to consider and determine it.
(6) Before reaching a decision as to who should determine the dispute, either under sub-paragraph (5) or under section 4(5) of the 1990 Act, the Secretary of State shall, within the period of 7 days beginning with the date on which a matter was referred to him, send a written request to the parties to make in writing, within a specified period, any representations which they may wish to make about the matter.
(7) The Secretary of State shall give, with the notice given under sub-paragraph (6) to the party other than the one which referred the matter to dispute resolution a copy of any document by which the matter was referred to dispute resolution.
(8) The Secretary of State shall give a copy of any representation received from a party to the other party, and shall in each case request (in writing) a party to whom a copy of the representations is given to make within a specified period any written observations which it wishes to make on those representations.
(9) Following receipt of any representations from the parties or, if earlier, at the end of the period for making such representations specified in the request sent under sub-paragraph (6) or (8), the Secretary of State shall, if he decides to appoint a person or persons to hear the dispute –
(a) inform the parties in writing of the name of the person or persons whom he has appointed; and
(b) pass to the person or persons so appointed any documents received from the parties under or pursuant to sub-paragraph (3), (6) or (8).
(10) For the purpose of assisting him in his consideration of the matter, the adjudicator may –
(a) invite representatives of the parties to appear before him to make oral representations either together or, with the agreement of the parties, separately, and may in advance provide the parties with a list of matters or questions to which he wishes to give special consideration; or
(b) consult other persons whose expertise he considers will assist him in his consideration of the matter.
(11) Where the adjudicator consults another person under sub-paragraph (10)(b), he shall notify the parties accordingly in writing and, where he considers that the interests of any party might be substantially affected as a result of the consultation, he shall give to the parties such opportunity as he considers reasonable in the circumstances to make observations on those results.
(12) In considering the matter, the adjudicator shall consider –
(a) any written representations made in response to a request under sub-paragraph (6), but only if they are made within the specified period;
(b) any written observations made in response to a request under sub-paragraph (8), but only if they are made within a specified period;
(c) any oral representations made in response to an invitation under sub-paragraph (10)(a);
(d) the results of any consultation under sub-paragraph (10)(b); and
(e) any observations made in accordance with an opportunity given under sub-paragraph (11).
(13) In this paragraph, "specified period" means such period as the secretary of State shall specify in the request, being no less than two, nor more than four, weeks beginning with the date on which the notice referred to is given, but the Secretary of State may, if he considers that there is good reason for doing so, extend any such period (even after it has expired) and, where he does so, a reference in this paragraph to the specified period it the period as so extended.
(14) Subject to the other provisions of this paragraph and paragraph 96 and to any agreement by the parties, the adjudicator shall have wide discretion in determining the procedure of the dispute resolution to ensure the just, expeditious economical and final determination of the dispute.
96. Determination of dispute
(1) The adjudicator shall record his determination and the reasons for it in writing and shall give notice of the determination (including the record of the reasons) to the parties.
(2) Where the adjudicator makes a direction as to payments under section 4(7) of the 1990 Act (as it has effect as a result of regulation 9 or paragraph 94(1), that direction is to be enforceable in a county court (if the court so orders) as if it were a judgment or order of that court."
(C) Background facts of the present dispute
"1.1 …As Chief Officer of the FHS Appeal Unit and authorised officer of the NHS Litigation Authority, I may determine the matter myself or, if I consider it appropriate, appoint a person or persons to consider and determine it.
1.2 The dispute resolution procedure also allows for advice to be sought.
6.1 The PMS Agreements Regulations 2004 apply in this case …
6.3 Given the limited information provided and in order to be able to determine the dispute properly, I have decided to consult and seek advice from the Chief Executive's Office of the Valuation Office Agency. The VAO uses its expert knowledge on these matters to weigh the merits of the arguments presented but, importantly, has no pecuniary or budgetary interest in the outcome. It is open to the VOA to ensure that this has available to it as full an understanding as possible of the parties view on the appropriate valuation. "
The covering letter stated as follows:
"The Appeal Unit has decided to seek advice from the Chief Executive's Office of the Valuation Office Agency. As you will see, both the Doctors and the PCT will be given an opportunity to provide further comments before the final decision on the application for dispute resolution is made."
The Claimants challenge the procedure outlined in these documents.
"I had understood that Schedule 5 Part 7 paragraph 95 of the Statutory Instrument 627 (2004) required the Secretary of State (or the delegated Authority) to appoint an "independent adjudicator" to hear such matters. I did not take your letter of 30 July as an indication that you had asked the Chief executive's Office of the Valuation Office Agency to appoint an individual from the VOA to act in this role.
The SI appears to give the Secretary of State the authority to appoint an adjudicator of his choice but as in all such matters the Secretary of state is required to act in a reasonable manner and have due regard to the rules of natural justice.
As you are aware I have serious reservations as to whether the VOA can be regarded as sufficiently independent to perform this role. In the circumstances I should be obliged if you would confirm that a VOA individual has been appointed as "independent adjudicator" and if not what is the nature of the advice being sought from the VOA. Similarly if an adjudicator has been appointed what is the exact nature of the quasi-judicial role that he or she has to perform. In particular is the adjudicator an independent expert or an arbitrator and if not what regulations govern the conduct of the independent adjudicator?
My clients would prefer the matter to be dealt with in accordance with the normal arbitration procedures as laid down in the Arbitration Act (1996). As such your adjudicator would be restricted to consideration of the evidence submitted and nothing else. If your "adjudicator" wishes to act as an independent expert then I would point out that such an individual has a legal duty to both parties and is liable to both parties. In addition I would expect to be notified of any material or files to which he or she has access in the course of the investigation and which have not been previously disclosed. There must be no "secret evidence" available to one party only.
My clients have no wish to be unduly difficult and would probably not object to the appointment of a suitably qualified individual from the VOA as the independent adjudicator but would require that the individual in question;
- Be a member of the Royal Institution of Chartered Surveyors
- Possess experience of arbitration
- That he or she acts in strict accordance with the Arbitration Act 1996
- Has due regard to the rules of the Royal Institution of Chartered Surveyors as it affects members carrying out such a role.
In this context the Royal Institution of Chartered Surveyors does provide a panel of arbitrators experienced in the medical field.
I look forward to your reply at your earliest convenience. "
"As a representative of the contractor to the instant PMS Agreement, you have referred the matter of rent reimbursement for dispute resolution under the provision of Paragraph 95, Schedule 5 of the NHS (Personal Medical Services Agreement) Regulations 2004. While paragraph 95 refers to the Secretary of State, the NHS Litigation Authority has been directed to exercise those functions of dispute resolution on his behalf and does so through its administrative arm the 'Family Health Services Appeal Unit.'
As Chief Officer of the FHS Appeal Unit and authorised officer of the NHS Litigation Authority, I either act as the adjudicator or decide to appoint a person(s) under sub-paragraph (9) once the preceding sub-paragraphs have been complied with, which is the case here. As is usual in current market rent disputes, I have not exercised my discretion to appoint person(s) under sub-paragraph (9) and therefore I currently remain the Adjudicator for this dispute. It follows that Mr Baxendale, or any person acting for the VOA, is not undertaking the role of Adjudicator.
Following consideration of matters currently before me, under sub-paragraph (10)(b), I have exercised my discretion to consult other persons [through Chief Executives office of the VOA] whose expertise I consider will assist me in my consideration of the dispute before me. The VOA have a number of such experts upon whom I rely and Mr Baxendale is one such person and acts in that capacity. I trust you will accord him appropriate professionalism and access to premises and other matters he considers it appropriate in order that he can advise me on this important matter.
I note you make reference to arbitration however that does not form part of this statutory process, which is adjudication following matters not being resolved at first instance between the contractor and local PCT.
Although I note your reference to Mr Baxendale being involved in another case where you are involved, there is no suggestion that the same PMS contractor is involved or that Mr Baxendale has any pecuniary or budgetary interest that would debar him from providing the expertise I require.
It may assist if I summarise my current position with the instant dispute before me:
[There is then repeated paragraph 6.3 of the letter of 26 July quoted above.]
Once the report is received, the parties to the PMS Agreement will be provided with an opportunity to make observations upon it although this is not an opportunity to change or remake the case. I will then consider the dispute before me."
(D) The Arguments
(E) The issues
(1) Is Article 6 of the Convention engaged in respect of the dispute resolution procedure in this case?
"2.3 …[I]n my experience, there has never been a decision by a PCT not to reimburse the GP tenant once the CMR is agreed. If the system is to continue effectively, once a PCT has approved a scheme and GP tenants have entered a long lease on the understanding that it would be reimbursed, I cannot see a PCT ever deciding not to reimburse a GP tenant on budgetary considerations alone. This would send shockwaves through the whole system because it would be so unusual. As soon as one PCT exercises its discretion not to reimburse GP tenants on budgetary considerations this would have the potential to destroy the confidence in the system for both GP tenants and private investors alike. I therefore cannot think of any realistic circumstances in which reimbursement would be denied on budgetary grounds after the CMR has been determined and confirm that, as far as I am aware, the PCT in the Hereward matter has never suggested it would do anything else but reimburse the GP tenants at the CMR as determined."
"Whether or not an arrangement which constitutes an NHS contract would apart from this subsection be a contract in law, it must not be regarded for any purpose as giving rise to contractual rights or liabilities".
It is accepted, however, that the rights of the Doctors under this agreement may still be "civil rights" under Article 6 even if they are not "contractual rights". Mr Karas QC (with whom Mr Maurici appeared) for the Claimants also stressed that, whatever the legal nature of the rights arising under the agreement between the Doctors and the PCT, they were rights flowing from an agreement between them; in so far as terms were included by reference to the PMS Agreements Regs and the Premises Costs Directions, those terms applied by virtue of the agreement itself.
"…the fact that it [the claim] was to a benefit in kind necessarily means that the Council has a discretion about the nature of the accommodation it will provide, but in principle there is a right to accommodation and not merely a claim to the exercise of a discretion…"  2 AC 430 at p.455F.
He continued by citing the judgment of Hale LJ (as she then was) in Adan v Newham BC  1 WLR 2120, 2137, paragraph 55 as follows:
"Once the local authority are satisfied that the statutory criteria for providing accommodation exist, they have no discretion. They have to provide it, irrespective of local conditions of demand and supply. Hence this is more akin to a claim for social security benefits than it is a claim for social or other services, where the authorities have a greater degree of discretion and resources considerations may also be relevant."
"… It has four features which take it beyond the existing case law: (i) it is concerned with a benefit in kind; (ii) it therefore involves priority between competing Claimants. There is only a finite amount of housing stock, whether it belongs to the local housing authority or is bought in; and if one applicant is allowed to remain on the unintentionally homeless register it will be to the detriment of other homeless persons; (iii) the housing authority has a discretion as to the manner in which it will discharge its duties; and (iv) ultimately the question for determination calls for an exercise of judgment: whether the applicant has behaved reasonably in refusing an offer of accommodation, having regard to all the circumstances, and in particular housing conditions in the area."
"26. …Article 6 does not apply to the exercise by public authorities of their discretion, as distinguished from their compliance with their obligations owed to citizens. Obligations give rise to rights; discretionary payment and discretionary support do not…
27 …A right by definition is something to which the citizen is entitled, to which he has an enforceable claim. A discretionary benefit, one that a government may give or refuse as it wishes, cannot be the subject of a right…".
"I am satisfied that the child has more than a mere right to apply for accommodation. As is common ground, he certainly has right to accommodation when the conditions for granting it are met and so it seems to me that, at the time he makes his application and seeks the determination of his claim, it can then fairly be said that he has the right, at least on arguable grounds, to be provided with accommodation. Assuming for a moment that it is a civil right, it is in the determination of that civil right that he is entitled to the guarantees of fairness afforded by Art. 6. He has the right to a fair hearing whether the determination is favourable or unfavourable to him. Indeed, it is difficult to see what use article 6 would be if it could only be invoked when the determination found that the conditions for accrual or crystallisation of the right had been established. Article 6 is there to protect the victim of a determination made by a tribunal lacking independence and impartiality which has unfairly decided the relevant facts and matters against him and so refused to admit that he has the right he was seeking to assert.
Do the appellants have a civil right to accommodation?
The analysis so far has been concerned to answer the narrow question: does section 20 confer a right to accommodation? Now I have to ask another question, the more important question: does that right amount to a civil right as the autonomous term must be understood? This requires us to look at the scheme of the Act to discover exactly what accommodation the child becomes entitled to under section 20. Section 23 provides the answer. Section 23(2) requires that the local authority provide accommodation and maintenance for any child whom they are looking after by doing any one of many things. A huge spread of accommodation is envisaged. It ranges from placing him with a family, a relative of his or a foster parent. The local authority can maintain him in an appropriate children's home or even, and this is important,
"(f) Making such other arrangements as –
(i) seem appropriate to them."
Whilst, therefore, it can be said that the child may have a right to some accommodation under section 20, he has no right, or enforceable claim to any particular type of accommodation. A wide discretion is vested in the local authority to decide exactly what accommodation is appropriate in the circumstances of the case. Consequently, looking at the process as a whole, beginning with the assessment under section 20 but ending with the allocation under section 23, the decision-making process has the character of exercising a discretionary power which destroys the notion that a right is involved."
"(4) The determination about age is not a determination of civil right because the civil right must encompass all the matters in section 20. The age determination was but a staging post. It would be absurd if one part of section 20(1) was subject to Article 6(1) and the other parts not. …"
"69. In view of the wide discretion left by the Swedish Parliament to the administrative authorities in these matters, the Government further maintained that the applicant could not claim any 'right' to build before a permit had been granted.
The Court considers however that, subject to meeting the requirements laid down in the 1947 Act and the 1959 Ordinance, he could arguably have claimed to have a 'right' to such a permit. True, the issue of a permit under these circumstances would have involved the exercise of a certain discretion by the authorities, but their discretion would not have been unfettered: they would have been bound by generally recognised legal and administrative principles.
70. Pointing out that the prohibitions at issue affected the rights of a great number of other property owners, the Government alleged that the dispute in the applicant's case thus came to have connections with his 'right' to build that were so remote and tenuous as to make Article 6 inapplicable.
There can, however, be no doubt that the prohibitions severely restricted the said "right" and that the outcome of the proceedings whereby he challenged their lawfulness was directly decisive for his exercise thereof…
2. "Civil character of the right at issue…
73. In the circumstances of the present case, the applicant's disputed "right" to build on his land is of a "civil nature" for the purposes of Article 6(1). This is not affected by the general character of the building prohibitions, not by the facts that the planning procedure, as was submitted by the Government, is part of public law and that a building prohibition is a necessary element in urban planning"
"16. The Government submitted that while the existence of civil rights in the context of employment in the civil service could not be excluded a priori, in principle disputes relating to such employment fell outside the scope of Article 6 of the Convention. The provision was applicable when the private-law features of any given case predominated.
In the present case, since the dispute concerned a decision of the regional Council to take the applicant into its permanent employ, it came within the sphere governed by public law. Accordingly, the application was inadmissible ratione materiae.
17. The Commission took the view that the - explicit or implicit - pecuniary aspect of what was at stake in the proceedings was decisive for the purpose of determining whether Article 6 was applicable when, as in the present case, the domestic proceedings had a bearing on the applicant's economic rights.
18. The court does not accept the Government's argument. Before the RAC the applicant sought, in addition to implementation of the Regional Council's decision to recruit him, payment of the difference in salary and damages for the delay in implementing the decision. The right asserted by Mr Nicodemo was essentially economic and the administrative authorities' discretionary powers were not in issue. Consequently, the private-law features predominated over the public-law features."
(3) Is the dispute resolution procedure compliant with Article 6 by reason of the decision maker being "independent and impartial"
"The independence of the NHSLA and PCT budgets impugned in this judicial review can best be illustrated as follows:
a. The NHSLA receives a budget from the Secretary of State for Health for administration which includes the running of cases such as this. If, for example, it receives 5 cases fewer than anticipated, it can spend those funds on something else. On the other hand, if it receives 5 cases more than anticipated, the NHSLA might have to borrow funds from other parts of its budget to meet those costs, as long as they are repaid, as described in paragraph 40 above.
b. At the relevant time in this case, the PCT received a budget in which an amount was nominally awarded by DH in respect of rent reimbursements but the PCT was free to spend its budget as a whole as it wanted. So if the PCT spends less on rent reimbursement than it anticipated because the CMR for some premises was lower than expected, it could afford (to give a very basic example) to pay the salary of another nurse. The money that it has not spent is not 'repaid' to DH to be allocated to other DH-funded departments, agencies or bodies (such as the NHSLA).
c. In summary, if the PCT has money left in its budget which it has not had to use for rent reimbursements, that money is not and cannot be added to NHSLA's budget. Similarly, there is never any under spend by the NHSLA that could be transferred back to DH and on to any other body/agency (such as a PCT) because it juggles its budgets as necessary to meet its spending targets on individual areas. Therefore, there is no financial interdependence between the PCT and NHSLA and the outcome of any rent review such as in this case conducted by the NHSLA under the NHS Dispute Resolution Procedure cannot result in funds being diverted from the PCT to the NHSLA. The NHSLA has no financial interest, therefore, in determining a case in the PCT's favour.
42. The system under which PCTs are allocated central funding for the costs of primary medical services in their area and the system under which the NHSLA is funded for its various purposes are, as can be seen, entirely separate."
"In order to establish whether a body can be considered "independent", regard must be had, inter alia, to the manner of appointment of its members and to their term of office, to the existence of guarantees against outside pressures and to the question whether the body presents an appearance of independence.
It is true that the inspector was required to decide the applicant's planning appeal in a quasi-judicial, independent and impartial, as well as fair, manner. However, as pointed out by the Commission in its report, The Secretary of State can at any time, even during the course of proceedings which are in progress, issue a direction to revoke the power of an inspector to decide an appeal. In the context of planning appeals the very existence of this power available to the Executive, whose own policies may be in issue, is enough to deprive the inspector of the requisite appearance of independence, notwithstanding the limited exercise of the power in practice as described by the Government and irrespective of whether its exercise was or could have been at issue in the present case.
For this reason alone, the review by the inspector does not of itself satisfy the requirements of Article 6 of the Convention, despite the existence of various safeguards customarily associated with an "independent and impartial tribunal". "
"…the Court observes that the Regional Commission is a "tribunal" within the meaning of Article 6(1) as it is independent of the executive and also of the parties, it members are appointed for a term of five years and the proceedings before it afford the necessary guarantees…" (emphasis added)
"It is instructive to compare the position of temporary judges appointed under s.35(3) of the 1990 Act with that of temporary sheriffs appointed under s.11 of the Sheriff Courts (Scotland) Act 1971. When their position was examined in Starrs v Ruxton; Ruxton v Starrs 2000 JC 208, it was held that temporary sheriffs were not an independent and impartial tribunal within the meaning of Art.6(1) of the Convention. In the course of his opinion Lord Justice-Clerk Cullen identified the following points as leading to that conclusion at 226-230: (1) the fact that the Secretary of State's power to recall their appointment in s.11(4) was without any qualification as to the circumstances in which it might be exercised; (2) the terms of the temporary sheriff's appointment, which contained a temporal limit to the appointment of one year for which no authority was to be found in the statute, reinforcing the impression that the tenure of office by the individual temporary sheriff was at the discretion of the Lord Advocate; and (3) the restrictions which the Lord Advocate had applied in determining those who qualified for re-appointment, setting out the minimum periods of work which they were expected to perform and an age limit of sixty five for which too there was no sanction in the statute and could therefore change as one Lord Advocate succeeded another.
These factors were all absent in the case of temporary judges appointed under s.35(3) of the 1990 Act by July 2003 when Mr Macdonald was presiding over the trial in which the appellant was convicted. The Scottish Ministers had no power to recall his appointment during the period determined in accordance with para.5 of Sch.4 which was expressly stated in his commission of appointment. And the Lord Advocate had for all practical purposes withdrawn completely from any involvement in the reappointment of temporary judges after the period of their current appointment had come to an end. For all practical purposes, subject to consultation with the Justice Minister, these matters were now exclusively under the control of the Lord President as the head of the judiciary."
i) The PCT is a body corporate having independent existence from the SSH (NHSA 2006 s.18, Sch. 3 paragraph 1).
ii) The NHSLA, as a Special Health Authority, is also a body corporate separate from SSH (NHSA 2006 s.28, Sch. 6, paragraph 1).
iii) The SSH is not involved in the resolution of individual disputes such as the present.
iv) The budgetary connection relied upon by the Claimants is tenuous: see the witness statement of Mr Latta on behalf of SSH as quoted above.
v) The functions of the Appeal Unit and its decision maker are far removed from the PCT, the SSH and other organs of the NHS such as to provide it with a true independence of the parties and of the executive: c.f. the role of the reviewing local authority housing officer whose role was considered in the Runa Begum case.
(4) Composite Compliance
"Nonetheless, in such circumstances the Convention calls at least for one of the two following systems: either the judrisdictional organs themselves comply with the requirements of article 6(1), or they do not so comply but are subject to subsequent control by a judicial body that has full jurisdiction and does provide the guarantees of article 6(1)."
"The reference to "full jurisdiction" has been frequently cited in subsequent cases and sometimes relied upon in argument as if it were authority for saying that a policy decision affecting civil rights by an administrator who does not comply with article 6(1) has to be reviewable on its merits by an independent and impartial tribunal. It was certainly so relied upon by counsel fore the respondents in these appeals. But subsequent European authority shows that "full jurisdiction" does not mean full decision making power. It means full jurisdiction to deal with the case as the nature of decision making requires."
"… In Bryan, Runa Begum and the other cases cited in para. above, the issues to be determined require a measure of professional knowledge or experience and the exercise of administrative discretion pursuant to wider policy aims. In contrast, in the instant case, the HBRB was deciding a simple question of fact, namely whether there was "good cause" for the applicant's delay in making a claim. On this question, the applicant had given evidence to the HBRB that the first that she knew that anything was amiss with her claim for housing benefit was the receipt of a notice from her landlord-the housing association-seeking to repossess her flat because her rent was in arrears. The HBRB found her explanation to be unconvincing and rejected her claim for back-payment of benefit essentially on the basis of their assessment of her credibility. No specialist expertise was required to determine the issue, which is under the new system, determined by a non-specialist tribunal (see para. above). Nor, unlike the case referred to, can the factual findings in the present case be said to be merely incidental to the reaching of broader judgments of policy or expediency which it was for the democratically accountable authority to take."
"In this case, the PCT's determination, although embracing the Calculation, is not a 'simple question of fact' as in Tsfayo, but involves a question of policy, specifically of the budgetary targets of the PCT and the value for money of the rent sought to be reimbursed. Further, the Calculation itself, whilst a question of fact and not policy, does require the application of specialist expertise, which is why the District Valuer is consulted. The composite approach, therefore, still applies."
This clearly harked back to the decision in Runa Begum in which the House of Lords held that the composite procedure was compliant with Article 6 in a case where the findings of fact were "only staging posts on the way to much broader judgments" concerning local conditions and the availability of alternative accommodation which the housing officer had the necessary knowledge and experience to make: see Lord Bingham in Runa Begum paragraph 9(2). Mr Herberg made similar submissions in the course of his helpful address to me; at that stage he referred me also to Lord Hoffmann's speech in the same case at paragraph 56.
"… section 203 of the 1996 Act and the Allocation of Housing and Homelessness (Review Procedures) Regulations 1999 (SI 1999/71) do provide safeguards that the review will be fairly conducted. Thus the reviewer must be senior to the original decision-maker (section 203(2)(a), regulation 2), plainly to avoid the risk that a subordinate may feel under pressure to rubber-stamp the decision of a superior. The reviewer must not have been involved in making the original decision (section 203(2)(a), regulation 2), to try to ensure that the problem is addressed with a genuinely open mind. The applicant has a right to make representations, and must be told of that right (regulation 6(2)). Such representations must be considered (regulation 8(1)). The applicant is entitled to be represented (regulation 6(2)). If the reviewer finds a deficiency or irregularity in the original decision, or in the manner in which it was made, but is nonetheless inclined to make a decision adverse to the applicant, the applicant must be informed and given an opportunity to make representations (regulation 8(2)). The reviewer must give reasons for a decision adverse to the applicant (section 203(4)). The applicant must be told of his right to appeal to the county court on a point of law (section 203(5)).These rules do not establish the reviewer as an independent and impartial tribunal, but they preclude unreasoned decision-making by an unknown and unaccountable bureaucrat whom the applicant never has a chance to seek to influence, and any significant departure from these procedural rules prejudicial to the applicant would afford a ground of appeal."
"In my judgment, the connection of the councillors to the party resisting entitlement to housing benefit does constitute a real distinction between the position of an inspector and a Review Board. The lack of independence may infect the independence of judgment in relation to the finding of primary fact in a manner which cannot be adequately scrutinised or rectified by this court. One of the essential problems which flows from the connection between a tribunal determining facts and a party to the dispute, is that the extent to which a judgment of fact may be infected cannot easily be, if at all, discerned. The influence of the connection may not be apparent from the terms of the decision which sets out the primary fact and the inferences drawn from those facts. But the decision does not, and indeed should not, set out all the evidence.
The weight and impression given by that evidence will be a matter for the judgment of those before whom it is presented. The extent to which they have been influenced will not be manifest from the decision and it may indeed be something of which they themselves are unaware. That is, after all, the origin of the principle which determines the question of bias in terms of risk and not of actual bias. Real possibility and real danger are necessarily tests for the very reason that actual bias cannot readily be demonstrated.
Thus there is no answer to a charge of bias to look at the terms of a decision and to say that no actual bias is demonstrated or that the reasoning is clear, cogent and supported by the evidence. This court cannot cure the often imperceptible effects of the influence of the connection between the fact-finding body and a party to the dispute since it has no jurisdiction to reach its own conclusion on the primary facts; still less any power to weigh the evidence.
Accordingly, I conclude that there has been no determination of the claimant's entitlement to housing benefit by an independent and impartial tribunal. The level of review which this court can exercise does not replenish the want of independence in the review Board, caused by its connection to a party to the dispute."
Accordingly, there had been a breach of Article 6. It is particularly noticeable that the judge reached his conclusion with great reluctance since the decision was found to bear all the hallmarks of a cogent and independent judgment: see paragraph 66 of the judgment. So the appearance of bias could only flow from the connexion between the decision maker and one of the parties; no suspicion of the possibility of actual bias could have arisen otherwise.
" "(a) in order to determine whether there was bias in a case where actual bias is not alleged " the question is whether the fair-minded and informed observer, having considered the facts would conclude that there was a real possibility that the Tribunal was biased" (per Lord Hope of Craighead in Porter v Magill  2 AC 357 at 494 ). It follows that this exercise entails consideration of all the relevant facts as "the court must first ascertain all the circumstances which have a bearing on the suggestion that the judge was biased" (ibid ).
(b) Public perception of a possibility of unconscious bias is the key. It is necessary to delve into the characteristics to be attributed to the fair-minded and informed observer. What can confidently be said is that one is entitled to conclude that such an observer will adopt a balanced approach. This idea was succinctly expressed in Johnson v Johnson  200 CLR 488, 509 at paragraph 53 by Kirby J when he stated that "a reasonable member of the public is neither complacent nor unduly sensitive or suspicious"" (per Lord Steyn in Lawal v Northern Spirit Limited  ICR 856, 862 ).
(c) in ascertaining whether there is a case of unconscious bias, the courts must look at the matter by examining other similar analogous situations. "One does not come to the issue with a clean slate; on the contrary, the issue of unconscious bias has cropped up in various contexts which may arguably throw light on the problem. (Lord Steyn in Lawal v Northern Spirit Limited (supra), 862 ).
(d) the approach of the court is that "one starts by identifying the circumstances which are said to give rise to bias .. [a court] must concentrate on a systematic challenge and apply a principled approach to the facts on which it is called to rule" (per Lord Steyn in Lawal v Northern Spirit Limited (supra), 864-5 )
(e) the need for a Tribunal to be impartial and independent means that "it must also be impartial from an objective viewpoint, that is it must offer sufficient guarantees to exclude any legitimate doubt in this respect" (Findlay v United Kingdom (1997) 24 EHRR 221 at 224-245 and quoted with approval by Lord Bingham of Cornhill in R v Spear  1 AC 734 "
"It has however been a fundamental principle since the inception of the scheme that in assessing CMR the role of the District Valuer is to stand independent of both parties and impartially determine the appropriate figure. The Department of Health has always required the District Valuer's assessment to be objective and unbiased.
The impartiality of the District Valuer and the inability of the PCT to influence the level of a District Valuer's CMR have been deliberate features of the Scheme from the outset, restated over the years in various discussions between the Department of Health, British Medical Association, VOA and NHSLA (FHSAU), to ensure that CMR assessments are immune from being influenced by any financial pressures or budget restraints bearing on the PCT.
The function of the District Valuer in making a CMR assessment is to ensure that the GP receives the correct level of remuneration from the public purse – no more and no less- and the District Valuer has no vested interest in whether the level of the CMR figure arrived at is high or low.
Therefore although the request to undertake an assessment is received from the Primary Care Trust (PCT), the District Valuer does not act as an agent of the PCT when carrying out the task and this principle is clearly stated in the District Valuer's guidance and training material on DRRS casework."
"The District Valuer receives case instructions for the DRR Scheme from the PCT (Health Boards in Scotland and Wales). The PCT is the client in so far as it is to the PCT that the DV will issue the report and send the invoice. For the avoidance of doubt, GPs are independent contractors (rather than part of the NHS) and DVs will not act for them.
Since the Scheme's inception, it has been a fundamental principle that the role of the District Valuer in assessing CMR figures for GMS practices is to act impartially in arriving at an appropriate figure, standing between the parties. The DV is independent of both parties in the sense that the DV's purpose is not to act as an agent of the PCT or in an adversarial capacity, neither does the DV act on behalf of the GP.
The function of the District Valuer in supplying the CMR figure for GMS practices is to ensure that GPs receive the correct level of remuneration from the public purse-no more and no less. The District Valuer has no vested interest in putting the level of the CMR figure either high or low. Although instructed by the PCT, the DV is effectively "divorced" from that body so that the PCT is unable to influence the CMR level.
This is deliberate as a fundamental aspect of the Scheme, as agreed with the BMA, has always been a requirement to ensure that the impartial valuer's decisions are immune from any financial pressures bearing on the PCT and are not influenced by any local cost limitations or budget restraints."
It seems from its terms, however, that this part of the guidance applies to GMS practices only. PMS agreements are covered in Section Y of the document, which outlines the basic differences between PMS and GMS contracts. The section includes only the following short passage upon the role of the DV in rent matters affecting PMS practices:
"A PCT can properly seek advice from the DV as to the property element of PMS contract payments and can ask the DV to give CMR valuations and enter into negotiations with the PMS GP practices."
It is not suggested there that the DV in providing his advice would be acting other than on behalf of the PCT in such a case. As has been seen, in this case the DV was asked expressly to act "on behalf of" the PCT
"The FHSAU's requirements in requesting a report from the CEO valuer are:
- To obtain a factual description of the GP's premises and their location
- To obtain a factual account of the GP's views and supporting evidence on the valuation of the property as set out in the GP's representations.
- To obtain a factual account of the DV's views and supporting evidence on the valuation of the property as set out in the DV's representation and case file.
- To obtain an opinion on the weight to be attached to all the evidence presented by the GP and the DV. The CEO Valuer's report is not a valuation and therefore the CEO Valuer does not introduce fresh evidence.
- To obtain the CEO valuer's recommendation for consideration.
The arrangements are regarded as providing an effective and through professional review of the local DV decision by senior members of the Valuation Office centrally, who act in this matter quite independently of the Health Bodies and local District Valuers and who will make an informed recommendation to the FHSAU, with whom the final decision lies."
A later note states:
"To avoid the potential danger of the CEO valuer responsible for FHSAU cases commenting on a DRRS case during its initial stages and that case later being subject to the representations procedure, the CEO valuer will not in any circumstances advise on, or discuss the details of, any specific DRRS case with a local District Valuer at any stage in its life from receipt of the initial valuation request from the PCT.
Local DVs exercise their own professional judgment and are not subject to direction on any particular DRRS case from the CEO valuer.
No discussion is permitted between the CEO valuer and the DV about any of the pertinent details of the case which is the subject of the representations procedure, apart from the contact to request the DV's written submission and case file. "
"The rationale behind requesting the case file in its entirety is to safeguard the interests of the GPs from being disadvantaged in an appeal as, historically, a majority of the GPs who were involved in these disputes were not represented and would often put in submissions, or they would include weak submissions. GPs do not have to be professionally represented to appeal a CMR. If the entire case file is sent to the CEOV then it ensures that the GP's position is protected. The purpose of calling for the DV's files is to ensure that nothing of substance has been inadvertently missed from the parties' contentions, whether helpful to the view expressed by the DVor the GP. It ensures that no relevant points raised earlier have been omitted by the GP, as sometimes occurs in preparing their representations particularly if not assisted by an agent.
Now that most GP's are professionally represented in an appeal, the above mentioned rationale does not apply.
Therefore, from August 2008 the CEOV has not routinely called up the DV's case file or core rating file as GPs are now seldom without professional representation to assist with their submissions."
The revision to this procedure in August 2008 there mentioned reflects revised Guidance notes, of which a computer version dated 20 August 2008 was produced during the hearing. The revised passage now reads,
" … The DV should not forward their case file to the CEO valuer unless a specific request is made.
A case file request will be rare and only likely to be made where the GP in the appeal is unrepresented, the purpose in these circumstances being to ensure that nothing of substance has been inadvertently missed from the parties' contentions, whether it be helpful to the DV's view or to that of the GP and to ensure that the CEO valuer's recommendation to the FHSAU can be based on all the best information available."
Clearly, the CEO VOA considered the old procedure to be unsatisfactory. In my view, even in its revised form, it still is.
"District Valuer Services is a dedicated valuation, surveying and property business within the Valuation Office Agency. Our public sector background means we have a unique understanding of the needs of our clients. We specialise in providing an independent and impartial service that fully meets financial audit requirements, and can offer all round value for money at competitive prices. …
Our commitment to quality customer service means we provide solutions tailored specifically to the needs of our clients, we develop close working relations with them, and we continually strive to improve the service we provide. …
We serve a wide range of clients drawn from all parts of the public sector, with whom we work in partnership, matching our professional expertise to their particular requirements. …
Our clients include …
NHS trusts, Primary Care Trusts and Health Boards. "
"In autumn 2000 I presented the Valuation Office Agency with a challenge to turn itself into a "right-first-time" organisation, able to meet the rising expectations of its customers in an increasingly efficient and customer focused way. …
This revised framework document captures and underpins that vision and strategy: setting out the aim, objectives and priorities of the Agency and the framework of responsibilities and authorities within which it operates. In addition, Ministers will continue to set stretching targets for the efficiency and quality of service to be provided by the Agency for all its clients and customers in annually agreed forward plans."
In the document itself these passages appear:
"The Agency conducts its operations through a network of local offices and specialist teams. The Chief Executive's Office, although based in London, includes a substantial number of post-holders located in various parts of the country. …
The Agency operates on a net control arrangement, recovering the full resource cost of its funding from the clients for whom it provides valuation services. …
The financial objective of the Agency is to recover the full economic costs of its operation, within each business segment, through charges for the services it provides."
"To meet all our customers' objectives and maximise customer satisfaction by: …
- Working effectively with partners
- Delivering excellent value for money, while covering our costs…
District Valuers were responsible for regional level units. They supported HMRC with valuations for capital gains tax and inheritance tax purposes. They also work with a range of other public sector organisations, competing for the business on the open market, to deliver valuations and property advice.
Putting the Customer at the Heart of Agency Business
The customers or clients who pay for the services of the VOA are, generally speaking, other public sector bodies. However, to deliver our statutory duties for council tax and rating, the Agency works with a vast range of customers, from individual council taxpayers to multi-national companies, meeting the needs of these segments as well as the diversity of customers in between."
"The VOA's performance in delivering its other land valuation services
In recent years, the Inland Revenue has failed to forecast accurately the level of work that they require from the VOA, largely owing to changes in workflow arising from the introduction of Self Assessment. The trend has been a decline in the demand - from £21 million in the year ended 31 March 1998. The unreliability of the Inland Revenue's forecasts, and unplanned decline in demand, have caused difficulties for the VOA in managing its resources and finances. It will be important for the future that the Inland Revenue forecasts its demand more accurately and that the VOA manage its resources more flexibly in response to the variable demand.
The volume of other land valuation services carried out by the VOA has also declined, from £22m in the year ended 31 March 1995 to £14m in the year ended 31 March 2000. The current breakdown of land valuation services clients is:
- NHS Estates (31 per cent) …
A client survey conducted in 1999, however, shows increased levels of satisfaction among clients compared with the year ended 31 March 1994, and income in the year ended 31 March 2000 was above that in the previous year."
"The valuations that the VOA undertakes for the Inland Revenue and other land valuation service clients can also be right first time, although the measurement of "right" in this context will rest on meeting each client's specific needs. This will mean the VOA understanding its clients' objectives and ensuring that its valuations are suited to meeting those objectives. It will also mean ensuring that its valuations are completed on time and within the price agreed with the client."
"Speaking for myself, I accept the statements contained in the justices' affidavit, but they show very clearly that the deputy clerk was connected with the case in a capacity which made it right that he should scrupulously abstain from referring to the matter in any way, although he retired with the justices; in other words his one position was such that he could not, if he had been required to do so, discharge the duties which his other position involved. His twofold position was a manifest contradiction…I am satisfied that there has been no waiver of the irregularity, and, that being so…the conviction [must be] quashed."
"It is important to stress at the outset that the facts do not support the claimant's primary argument that Dr Armstrong was to be seen as a Benefits Agency doctor or that she was in some other way aligned with the Benefits Agency. The tribunal commissioners and their Lordships of the First Division were in agreement on this point. Her relationship with the Benefits Agency was as an independent expert adviser. Her advice was sought and given because of the skills that she was able to bring to bear on medical issues in the exercise of her professional judgment. A fair-minded observer who had considered the facts properly would appreciate that professional detachment and the ability to exercise her own independent judgment on medical issues lay at the heart of her relationship with the benefits Agency. He would also appreciate that she was just as capable of exercising those qualities when sitting as the medical member of a disability appeal tribunal."
He went on to say this:
"The question then is whether there were grounds for thinking that Dr Armstrong was likely to be unconsciously biased when she was examining medical evidence because of a predisposition to prefer the EMP report as against any contrary evidence due simply to her current involvement in providing reports as an EMP. Doctors holding current engagements to provide these reports can be assumed, no doubt, to have a special interest and experience in this kind of work. The group of doctors to which they belong can also be distinguished from NHS doctors generally, as was pointed out by the tribunal of commissioners. But why should these facts be said to lead to the conclusion that there was a real possibility that she was biased in favour of the views expressed by the EMP?
The weakness of the argument that this was a real possibility is exposed as soon as the task that Dr Armstrong was performing as an EMP is compared with the task which she was performing on the tribunal. In each of these two roles she was being called upon to exercise an independent professional judgment, drawing upon her medical knowledge and her experience. The fair-minded observer would understand that there is a crucial difference between approaching the issues which the tribunal had to decide with a predisposition in favour of the views of the EMP, and drawing upon her medical knowledge and experience when testing those views against the other evidence. He would appreciate, looking at the matter objectively, that her knowledge and experience could cut both ways as she would be just as well placed to spot weaknesses in these reports as to spot their strengths. He would have no reason to think, in the absence of any other facts indicating the contrary, that she would not apply her medical knowledge and experience in just the same impartial way when she was sitting as a tribunal member as she would when she was acting as an EMP."
"Pointing to section 11, the Norwich City Council said that the district valuer was like an appeal body. He should not be employed to make the initial valuation where he would sit on appeal from it to make the final valuation. That point impressed me much for some time. It seemed contrary to the accepted principle that "justice should not only be done, but should be manifestly and undoubtedly be seen to be done": see per Lord Hewart C.J. in Rex v. Sussex Justices, Ex parte McCarthy  1 KB 256, 259 and F.G.C. Metropolitan Properties Co. Ltd. V. Lannon  1 QB 577, 599. But this principle-like that of natural justice-must not be carried too far. It is flexible and must be adapted as the case may require.
Mr. Simon Brown showed us good reasons why it did not apply here. The "district valuer" is the valuation officer or the deputy valuation officer for the district: see section 27 (2) of the Housing Act 1980. His ordinary work is to make valuations for the rating list. The practice there is, as I understand it, for one of those in his office to prepare the draft valuation list: and then, if any ratepayer objects and proposes a different figure, for someone else in the office-the valuation officer or his deputy-to revise the valuation. That system is in accord with the Rating Acts. It works perfectly well in rating cases. A similar system is applied in these valuations under the Housing Act 1980. The initial valuation under section 10 (1) (on which the local council fixes the price) is made by one of the clerks in the office. If the tenant takes objection and refers the matter to the district valuer under section 11, then the decision is made by the valuation officer himself or his deputy. This system works perfectly well. That is shown by the fact that in 50 per cent. of the cases the valuation is reduced: and also by the even more striking fact that no tenant has ever taken any objection to the system. The only person to take objection has been Norwich City Council.
So justice is in fact done by reason of the final valuation being done by a senior officer quite distinct from the one who made the initial valuation. It is seen to be done by reason of the fact that no tenant has ever complained of it."
"The issue raised by the Council was whether or not the Secretary of State was entitled to take into account the existence of the DV to assist in s.10 valuations when deciding to intervene. … In Norwich the suggestion that there might be a perception of bias was in essence by the party in whose favour the bias (if there was any) would have been perceived to exist. The absence of objection by the tenants, therefore, was in fact material to the claim that the Secretary of State was entitled to take account of the possible assistance of the DV to the City Council. If the tenants did not object, the involvement of the DV could not be challenged and the DV would be available. There was no objection from anyone else affected and the system was very widely used indeed. … It is significant, however, that Kerr LJ considered that the Secretary of State could not have insisted on the local authority using the DV for the section 10 valuation whatever the circumstances (see p 835 A-C). The important point to note, however, was that whether or not there might be a perception of bias (and whether it might be waived) in any particular case raised by a particular tenant was not in issue: the issue was whether the availability of the DV to assist in s.10 valuations could be taken into account as a material consideration in the SoS's intervention."
Note 1 The same approach is to be found in a comment by Dyson LJ in R (Wright) v SSH  QB 422, 451 paragraph 88. I do not find any further assistance on this point, however, in the decision in the House of Lords in that case  UKHL 3, although I was referred to a passage in the speech of Baroness Hale of Richmond at paragraph 9. [Back] Note 2 It is not generally made public that the DV provides his file to the CEO VOA in these cases. It was in fact known to the Doctors in the present case, because their surveyor, Mr Fenwick, is himself a former DV. The file was disclosed in this case in response to a Request for Further Information under the Civil Procedure Rules. [Back]
Note 1 The same approach is to be found in a comment by Dyson LJ in R (Wright) v SSH  QB 422, 451 paragraph 88. I do not find any further assistance on this point, however, in the decision in the House of Lords in that case  UKHL 3, although I was referred to a passage in the speech of Baroness Hale of Richmond at paragraph 9. [Back]
Note 2 It is not generally made public that the DV provides his file to the CEO VOA in these cases. It was in fact known to the Doctors in the present case, because their surveyor, Mr Fenwick, is himself a former DV. The file was disclosed in this case in response to a Request for Further Information under the Civil Procedure Rules. [Back]