Scottish Court of Session Decisions

The legislation

"(10) An application [....] shall be granted by the board or primary care NHS trust, after the procedures set out in Schedule 3 have been followed, only if it is satisfied that the provision of pharmaceutical services at the premises named in the application is necessary or desirable in order to secure adequate provision of pharmaceutical services in the neighbourhood in which the premises are located by persons whose names are included in the pharmaceutical list."

An appeal against a decision on an application under regulation 5(10) is determined by the National Appeal Panel. Detailed provision is made as to the procedure in appeals by paragraph 4 to Schedule 3, and as to the National Appeal Panel by Schedule 4, Part II.

The decision of the Panel

"The decision of the Panel was that the provision of pharmaceutical services at the premises was not necessary but desirable in order to secure adequate provision of pharmaceutical services in the neighbourhood in which the premises were located by persons whose names are included in the Pharmaceutical List and that, accordingly, the appeal was upheld."

The Panel goes on to narrate in detail the procedure followed and the submissions made, and at the end of the document it gives the reasons for its decision under the headings "Neighbourhood" and "Adequacy of existing provision of pharmaceutical services and necessity or desirability". Those reasons are set out in full later in this Opinion.

The petitioners' arguments

"2. The decision complained of being unreasonable et separatim unlawful, et separatim invalidated by procedural irregularity and unfairness, reduction should be granted as first craved."

The Panel and Healthcare each state as their first plea-in-law a general plea to relevancy in the following terms:

"1. The petitioners' averments being irrelevant et separatim lacking in specification, the petition should be dismissed."

The "neighbourhood" issue

"1. POPULATION SIZE

1.1 The area of Bonnyrigg had a population of 14,457 (Scottish Census Results Online) in 2001 and will have grown significantly since then, with the development of modern housing estates, such as Lothian Park to the south. [Healthcare] believe that this size of the local population alone justifies the granting of a third pharmacy contract for the area, to ensure that adequate pharmacy services are maintained. This will be of even greater importance as the population of Bonnyrigg continues to grow rapidly. [ . . . ]

1.2 Bonnyrigg and the surrounding area will continue to expand in the future as more housing sites are developed. As mentioned in the original application the Hopefield Farm site to the south has been approved for development and is estimated to bring another 3,500 people to the area. Appendix 1 [a map] shows the proposed sites for future housing development in Bonnyrigg (this is in addition to the Hopefield Farm site), taken from the Local Plans Review 2004.

Site BG1 and BG7 to contain 95 houses

Site BG2, BG3 and BG4 to contain 581 houses

Site BG5, BG6 and BG8 to contain 1540 houses

BG9a and BG9b to contain 90 houses.

1.3 This in conjunction with similar developments in areas surrounding Bonnyrigg and many small-scale developments which are on-going. These will quickly create a population in excess of 20,000. The Orchard Grange site at Newtongrange (a further 71 dwellings have just been released) and the Fairmeadow (134 dwellings) developments are both under construction, as shown in Appendix 2 [photographs].

1.4 This rapidly increasing population will place an increased burden upon the pharmacy services available in Bonnyrigg, especially as the average age is expected to increase significantly."

"The map indicates proposals submitted to the Council for consideration by landowners/developers. The inclusion of any site on this map does not imply that development is supported."

"(Paragraph 7) [.....] He pointed out that there were a considerable number of new housing developments in and around Bonnyrigg. These were demonstrated on the map marked no. 5 in the papers before the Panel. [....]

(Paragraph 8) [.....] The further housing developments in Bonnyrigg will increase the pressures on the delivery of pharmaceutical services within the neighbourhood. He drew attention to the development at the Hopefield Farm site which was anticipated to house 3,500 persons. He again made reference to the map at page 5 of the Panel papers, which indicated a number of proposed housing development sites which would increase the resident population to approximately 20,000 persons. At the present time, there were only two pharmacies available to deliver the necessary services. A significant percentage of the 20,000 will include those over 65 years of age. The issue for the Panel to consider was the question of the adequacy of the service provision to the population. It was not a question of whether his company would bring in new services. The existing pharmacies would not be able to deliver all the pharmaceutical services required for this population. [.....]"

"21. Having considered the evidence presented to it, and the Panel's observations from a site visit, the Panel had to decide first the question of the neighbourhood in which the premises, to which the application related, were located.

22. The Panel noted the neighbourhood defined by the PPC and the views of the parties before the Panel and took into account a number of factors in defining the neighbourhood, including whether the neighbourhood was one for all purposes, that it had natural boundaries, the presence or otherwise of schools and shops and the distance over which residents had to travel to obtain pharmaceutical services. The Panel considered that in light of such criteria, the neighbourhood should be defined as the town of Bonnyrigg including the new housing developments which were proposed for the town."

"23. Having reached that conclusion, the Panel was then required to consider the adequacy of the existing pharmaceutical services in that neighbourhood, and whether the granting of the application was necessary or desirable in order to secure adequate provision of pharmaceutical services in that neighbourhood.

24. Within the neighbourhood, as defined by the Panel, it was considered that the provision of pharmaceutical services provided by the pharmacies within and to that neighbourhood were not adequate. The numbers of items dispensed by the two pharmacies were considerably higher than the Scottish national average. There was clear evidence that the population of Bonnyrigg was increasing substantially. The numbers of patients on the general medical practitioners' lists in Bonnyrigg, was high. There was evidence that a new pharmacy would improve the pharmaceutical services to the neighbourhood in terms of ameliorating the increasing heavy demands on the existing pharmacies and increasing the availability of private consultations. The Panel considered that the shortfall in the service provision required to be addressed, which might result in a degree of over-provision. Accordingly while it was not necessary to grant the application in order to secure an adequate pharmaceutical service, it would be desirable to do so.

26 [sic: read '25']. For the reasons set out above, the Panel considered that the existing pharmaceutical service in the neighbourhood was inadequate. The Panel was satisfied that the provision of pharmaceutical services at the premises of the Applicant and Appellant was not necessary but desirable in order to secure the adequate provision of pharmaceutical services in the neighbourhood in which the premises were located by persons whose names are included in the Pharmaceutical List.

27 [read '26']. In the circumstances, it was the decision of the Panel that the appeal be upheld."

Adequacy of reasons

"(2) The National Appeal Panel shall within 5 working days of taking its decision, give written notification of that decision with reasons for it to the Board to whom the original application was made."

Counsel for the petitioners founded on Albyn Properties Ltd v Knox 1977 SC 108 which was concerned with the duty of a rent assessment committee to give reasons for its decision. Lord President Emslie said (at page 112):

"The statutory obligation to give reasons is designed not merely to inform the parties of the result of the committee's deliberations but to make clear to them and to this Court the basis on which their decision was reached, and that they have reached their result in conformity with the requirements of the statutory provisions and the principles of natural justice. In order to make clear the basis of their decision a committee must state (i) what facts they found to be admitted or proved; (ii) whether and to what extent the submissions of parties were accepted as convincing or not; and (iii) by what method or methods of valuation applied to the facts found their determination was arrived at."

Counsel also referred to Glasgow Heritable Trust Ltd v Donald 1977 SC 113, a case decided in 1971 but reported as an appendix to Albyn Properties Ltd. Counsel relied on factors (i) and (ii) in the dictum quoted. It was not enough for the Panel to say that the items dispensed by the existing pharmacies did not conform to the national average, without finding that that average was an optimum figure. How the Panel had approached the question of adequacy had been "left in the air" (Glasgow Heritable Trust Ltd at page 114). The Panel had not looked at the local situation. Counsel also took me through the provisions of Schedules 3 and 4 to the Regulations and again referred to Lloyds Pharmacy. The Panel had been entitled to consider only probable future developments, not any possible developments. Healthcare had invited the Panel to fall into that error.

"The decision must, in short, leave the informed reader and the Court in no real and substantial doubt as to what the reasons for it were and what were the material considerations which were taken into account in reaching it."

The Court in Safeway Stores Ltd also referred to Albyn Properties Ltd and said (at page 41):

"Accordingly, where, as here, the Panel are differing from the Committee, in order to comply with their obligation to give reasons for their decision the Panel must indicate what material factors they considered in arriving at their decision, and what conclusions they reached on these material factors."

Procedural irregularity and unfairness

"9. Further and in any event, the said decision was reached in a manner that was procedurally irregular and unfair to the petitioners. The first interested party [Healthcare] was represented at the said hearing by Mr Conor Daly. He introduced himself as a pharmacist and barrister. The first respondents' chairman observed that he had met Mr Daly at the Stranraer appeal when he had been representing Bairds (N'ards) Ltd. The chairman remarked "Oh well, you'll keep us right". Thereafter Mr Daly conducted the appeal on behalf of the first interested party. Mrs Chiwara [the petitioners' representative] is not legally qualified. Her only expertise is as a pharmacist. She had no previous experience of conducting an appeal hearing. She considered Mr Daly to have conducted the hearing with considerable skill and in her view he had dominated the appeal. Having observed the manner in which Mr Daly conducted the appeal including how he dealt with questioning of and by Mr McKeever, representing Lloyds, she was left feeling intimidated and did not feel confident enough to question Mr Daly in relation to possible sites for additional housing and accordingly did not do so. Reference is made to paragraph 4(8) of Schedule 3 to the National Health Service (Pharmaceutical Services) (Scotland) Regulations 1995, as amended, which provides:

'The appellant, applicant and any person mentioned in paragraph 1(1)(c), except the local health council, who made written representation to the Board or primary care NHS trust about the application shall be permitted to be assisted in making representations at any Panel hearing by some other person, but that other person shall not appear in the capacity of counsel, solicitor or paid advocate, nor shall he be entitled to speak on behalf of the person being assisted.'

The guide to the appeals procedure published by the Scottish Executive also states:

'You can seek legal advice and be assisted at the hearing by a legal adviser or some other person, but only you can address the NAP.'

In the foregoing circumstances the procedure at the hearing was irregular and unfair. [...] it is further explained and averred that during September and October 2005 Mr Daly was acting as a paid advocate for pharmaceutical companies at appeals before the National Appeal Panel conducted under the said 1995 Regulations. He was employed by pharmaceutical companies to appear and plead their cases before the Panel. He acted for Healthcare Pharmacies Limited (Healthcare) as a paid advocate at the hearing before the Panel on 27 September 2005. He acted for Alliance Pharmacy Limited, Fern House, 53-55 High Street, Feltham, Middlesex TW13 4HU (Alliance) as a paid advocate at a hearing before the Panel on 6 October 2005. Alliance was seeking inclusion in the pharmaceutical list of Lothian Health Board in respect of a new pharmacy at Unit 9, Royal Bank of Scotland Headquarters, Glasgow Road, Gogarburn, Edinburgh. On each of these occasions, Mr Daly presented the appeals and made legal submissions on behalf of the companies whom he represented. At the hearing on 27 September 2005, before making such submissions, he advised the lay panel that he was a qualified barrister. There is no commercial or operational connection between Healthcare and Alliance. Over a period of about 10 years prior to September 2005, Mr Daly was involved in many applications for new pharmacy contracts in England, Scotland and Northern Ireland. He appeared in front of the National Appeal Panel on numerous occasions for different applicants. By September 2005, he was specialising in the provision, for reward, of services connected with applications for, and objections to, inclusion in pharmaceutical lists including (1) advice on the correct procedure to be followed when applying for, or objecting to applications for, inclusion in the pharmaceutical list and (2) advocacy services on behalf of applicants and objectors in relation to appeals before the National Appeal Panel. According to the records of Companies House, Mr Daly was appointed as Business Development Director of Healthcare with effect from 1 November 2005. The said date of appointment was provided by Healthcare on a Form 288a which was lodged on either 11 November 2005 or 23 November 2005."

"3. The decision of the first respondents not being unlawful or invalidated by procedural unfairness or properly subject to reduction decree of reduction should be refused.

4. Separatim esto there has been any breach of paragraph 4(8) of the 1995 Regulations (which is denied) no prejudice having been identified as having been suffered by the petitioner as a result of the breach decree of reduction on the grounds of any such breach should be refused.

5. Separatim esto there has been any breach of paragraph 4(8) of the 1995 Regulations (which is denied) the petitioners having waived their right to rely on any objection based thereon decree of reduction should be refused."

Result