Scottish Court of Session Decisions

OUTER HOUSE, COURT OF SESSION [2012] CSOH NUMBER22

P1005/11

OPINION OF LORD BRODIE in the petition of LLOYDS PHARMACY LIMITED, a company incorporated under the companies Acts (with company number 00758153) and having its Registered Office at Sapphire Court, Walsgrave Triangle, Coventry CV2 2TX Petitioners; for Judicial Review of decision of the National Appeal Panel of 1st August 2011 to refuse the Petitioners' appeal against the decision of the Pharmacy Practices Committee of Tayside Health Board dated 4th March 2011 to grant Walter Davidson & Sons Limited's application to be included on Tayside Health Board's Pharmaceutical List in respect of premises at 54-56 High Street, Auchterarder PH3 1BN ­­­­­­­­­­­­­­­­­________________

Petitioners: Lindsay, Q.C.; Dundas & Wilson CS LLP

First Respondent: Ellis, Q.C. et Stuart, Ranald F MacDonald, Solicitor

Third Respondent: Carmichael, Q.C.; Balfour + Manson, Solicitors

[Date of Issue]7 February 2012

Introduction
[1] This is an application for judicial review of a decision of the National Appeal Ppanel appointed in terms of schedule 4 to the National Health Service (Pharmaceutical Services) (Scotland) Regulations 2009 (SSI 2009/183) ("the Regulations"). The petitioner is Lloyds Pharmacy Limited. The respondents are, first, the National Appeal Panel, second, Tayside Health Board and, third, Walter Davidson & Sons Limited.

[2] The petition called before me for a first hearing on 13 January 2012. The petitioner was represented by Mr Lindsay Q.C. The first respondent was represented by Mr Ellis Q.C. and Mr Stuart. The second respondent had not lodged Answers to the petition and wasere not represented. The third respondent was represented by Miss Carmichael Q.C. I heard submissions on behalf of all three compearing parties. Mr Lindsay's motion was to uphold the first plea in law for the petitioner, to declare the first respondent's decision of 1 August 2011 it to be unlawful and unreasonable, and to reduce that decision. Mr Ellis's motion was to refuse the petition. Miss Carmichael's primary position was also that the petition should be refused and she associated herself with Mr Ellis's submission to that effect. However, as a secondary position, she contended that in the event that it was held that the first respondent's reasons had been insufficient, the court should remit to the first respondent to provide fuller reasons for its decision.

Statutory Framework
The Pharmaceutical List
[3] IThat in order to provide pharmaceutical services for the National Health Service the persons providing the pharmaceutical services and the premises from which the pharmaceutical services are to be provided both require to be entered in the Pharmaceutical List maintained by the relevant Health Board. Entry to the Pharmaceutical List is governed by The National Health Service (Pharmaceutical Services) (Scotland) Regulations 2009 (SSI 2009/183) ("the Regulations"). Regulation 5(1) of the Regulations constitutes the Pharmaceutical List and is in the following terms:

"5. - Pharmaceutical list

(1) The Board shall prepare a list to be called 'the pharmaceutical list' of, subject to the provisions of Regulation 26 (practitioners subject to inquiry) of the National Health Service (Tribunal) (Scotland) Regulations 2004, the names of persons, other than doctors and dentists, who undertake to provide pharmaceutical services and of the addresses of the premises within the Board's area from which these persons undertake to provide such services. The said list shall also state the nature of the pharmaceutical services to be provided, and the days and hours during which the premises are open, and show pharmacists as a separate category of persons within that list".

Regulation 5(2) of the Regulations sets out the procedure for gaining entry to the Pharmaceutical List:

"5(2) A person (hereinafter referred to in this regulation as an 'applicant') -

(a) who wishes to be included in the pharmaceutical list for the provision of pharmaceutical services; or

(b) whose name is already included in the pharmaceutical list, but who intends -

(i) to open within the Board's area additional premises from which to provide pharmaceutical services, or

(ii) to relocate within the Board's area the premises from which the applicant provides pharmaceutical services shall (except in the instance of an application to which paragraph (3) or (4) applies) complete a consultation in accordance with paragraph (2A) before making an application, and an application in every instance shall be in accordance with whichever version Regulation 5(10) of the Regulations governs applications by persons whose name is already included in the pharmaceutical list but who intends to open additional premises from which to provide pharmaceutical services:

Regulation 5(10) of the Regulations provides the criteria for the grant of an application.

"5(10) An application made in any case other than one to which paragraph (3) or (4) applies shall be granted by the Board, 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".

The functions of the Board in relation to Regulation 5(1) are exercised by its Pharmacy Practices Committee.

Appeals
[4] Paragraphs 1 and 5 of schedule 3 to the Regulations, as they were in force at the material time, provide a right of appeal against a decision by the Pharmacy Practices Committee to grant entry to the Pharmaceutical List to the first respondents:

"1. - Receipt and notification of applications

(1) the Board shall within 10 working days of receiving an application to which Regulation 5(10) applies, or receiving further information submitted under Regulation 5(2E) (whichever is the later), give written notice of the application to which Regulation 5(10) applies, give written notice of the application to -

(a) the Area Pharmaceutical Committee;

(b) the Area Medical Committee;

(c) any person whose name is included in the pharmaceutical list or the provisional pharmaceutical list and whose interests may, in the opinion of the Board, be significantly affected if the application were granted;

(d) any Board whose boundary is within two kilometres of the proposed premises.

...

5. - Appeals

(1) Subject to sub-paragraph (2) the applicant or any person mentioned in paragraph 1 may appeal against the decision of the Board on the application, and must give notice of any such appeal to the Board within 21 days from the date on which notification of the Board's decision was sent to the applicant or person mentioned in paragraph 1.

(2) Any person mentioned in paragraph 1 who was notified of an application under that paragraph but made no written representations to the Board about it shall not be entitled to appeal against a decision of the Board in relation to that application.

(3) Any notice of appeal under this paragraph shall contain a concise statement of the facts and contentions upon which the appellant intends to rely.

(4) The Board shall refer a notice of appeal under this paragraph to the chair of the National Appeal Panel appointed in accordance with Part II of Schedule 4.

(5) If the chair, after considering the notice of appeal, is of the opinion that the notice discloses no reasonable grounds of appeal, or that the appeal is otherwise frivolous or vexatious, the chair may determine the appeal by dismissing it forthwith, in which case the chair shall inform the Board accordingly. The chair's decision in such cases shall be final.

(6) In any other case the National Appeal Panel shall be convened in accordance with Part II of Schedule 4 and the said Panel shall thereafter determine the appeal.

(7) the Administration of Justice and Tribunal Council or the Scottish Committee thereof shall be given 14 days notice of any Panel hearing, and a member of the council or its Scottish Committee shall be entitled to be present at any such hearing.

(8) The appellant, applicant and any person mentioned in paragraph 1(1)(c) who made written representation to the Board 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 that person be entitled to speak on behalf of the person being assisted".

Paragraph 15 of Schedule 4 to the Regulations makes certain provisions relating to decisions made by the first respondent:

"15. - Notice of decision of National Appeal Panel
(1) 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.

(2) The Board shall -

(a) within 5 working days of receipt of such notification, intimate to the applicant and all persons mentioned in paragraph 1 of Schedule 3 that decision and the reasons for it; and

(b) within 5 working days of such intimation, publish that decision and the reasons for it on its website".

Factual Background
[5] The petitioner is included in the second respondent's Pharmaceutical List in respect of a number of premises. One of these premises is situated at 171 High Street, Auchterarder. This is the only pharmacy in Auchterarder.

[6] In 2009 Michael Doherty submitted an application to the second respondent's Pharmacy Practices Committee to be included in the second respondent's Pharmaceutical List in respect of premises at 2 Rossie Place, Auchterarder PH3 1AJ. On 28 May 2009 the second respondent's Pharmacy Practices Committee refused this application. Mr Doherty appealed against this decision to the first respondent. On 1 August 2009 the Chair of the first respondent, Ms Linda Haase, dismissed the appeal forthwith, under paragraph 5(5) of Schedule 3 to the Regulations, as she did not consider that Mr Doherty's grounds of appeal disclosed any reasonable grounds of appeal. In so deciding the Chair held that there was no evidence at the Pharmacy Practices Committee of any existing or future capacity issues within the petitioner's pharmacy nor was there evidence of any adverse comments regarding the service provision within the neighbourhood. The Chair concluded that the Pharmacy Practices committee was entitled to reach the conclusion that it was not necessary to grant Mr Doherty's application in order to secure adequate provision of pharmaceutical services to the neighbourhood. The respondent's averments in answer are denied except insofar as coinciding herewith.

[7] OnThat on 22 July 2009 the third respondent submitted an application, under Regulation 5(2)(b)(i) of the Regulations, to the second respondent's Pharmacy Practices Committee for additional premises at 54-56 High Street, Auchterarder to be included in the second respondents' Pharmaceutical List. On 2 December 2009 the second respondent's Pharmacy Practices Committee decided to grant the third respondent's application. The petitioners appealed against this decision to the first respondent under and in terms of paragraph 5 of Schedule 3 to the Regulations. The first respondent heard the appeal on 4 May 2010. The petitioner was represented at the hearing as was the third respondent. The third respondents opposed the petitioner's appeal.

[8] On 6 May 2010 the first respondent upheld the petitioner's appeal. The first respondents' reasons were contained in paragraphs [31] to [33] of its written determination which were in the following terms:

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

32. Within the neighbourhood, as defined by the Panel, it was noted that there was one pharmacy located within the neighbourhood. The nearest pharmacies to Auchterarder were located in Perth and Crieff. The population of the neighbourhood was approximately 7,015 persons. Bus services on the High Street, operated at approximately one hourly intervals. It was a relatively affluent area with a high level of car ownership, reflecting the needs of rural living. For those who were housebound or who were unable to collect dispensed prescriptions, a non-contract collection and delivery service was available to them from the existing pharmacy. The volumes dispensed by the existing pharmacy were considered reasonable for the population numbers. There was no evidence of any complaints to the Health Board regarding any shortfall in the adequacy of pharmaceutical services in the neighbourhood. It was noted that there were no issues regarding Methadone dispensing. The Panel further noted that the location of the new premises was relatively close to the existing pharmacy and would not in that regard, improve access to pharmaceutical services for those proceeding from the lower or higher parts of Auchterarder. The Panel had considered in detail, the two surveys and the public consultation which had been conducted by the Tayside Health Board. It was evident that there was an element of duplication in the 700 responses which had been obtained from the various sources. The surveys had included irrelevant issues such as non pharmaceutical products and beauty care products. While the Panel had noted from the surveys and consultation, a pattern of dissatisfaction with the existing pharmaceutical provision, it had concluded in its expert view, that this did not constitute sufficient evidence of inadequacy of the professional NHS contract pharmaceutical services in the neighbourhood.

33. It was the view of the Panel that the provision of pharmaceutical services in the neighbourhood was adequate. The Panel was satisfied that the provision of pharmaceutical services at the premises was neither necessary nor desirable in order to secure the adequate provision of pharmaceutical services in the neighbourhood to which the premises were located by persons whose names are included in the Pharmaceutical List. In the circumstances, it was the decision of the Panel that the appeal should be upheld."

The Decision Under Review

[9] The third respondent submitted another application, under Regulation 5(2)(b)(i) of the Regulations, to the second respondent's Pharmacy Practices Committee in respect of the same premises at 54-56 High Street, Auchterarder PH3 1BN with a view to being included in the second respondent's Pharmaceutical List. On 4 March 2011 the second respondent's Pharmacy Practices Committee decided in favour of the application. The petitioner thereupon appealed this decision to the first respondents under and in terms of paragraph 5 of Schedule 3 to the Regulations. The first respondent heard the appeal on 26 July 2011. The petitioner was represented at the hearing as was the third respondent. The third respondent opposed the petitioner's appeal.

[10] The first respondent refused the petitioner's appeal in terms of decision dated 1 August 2011. The reasons given by the first respondent for refusing the petitioners appeal are set out in paragraphs 14 to 18 of that decision. These paragraphs are inter alia in the following terms:

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

15. ... The Panel decided that the neighbourhood should be defined as the town of Auchterarder, a self-contained community, which was bounded on all sides by open country.

Adequacy of existing provision of pharmaceutical services and necessity or desirability
16. Having reached a conclusion as to neighbourhood, the Panel was then required to consider the adequacy of existing pharmaceutical services in the neighbourhood, and whether the granting of the application was necessary or desirable in order to secure adequate provision of pharmaceutical services in the neighbourhood.

17. Within the neighbourhood, as defined by the Panel, it was noted that there was currently one pharmacy, Lloyds Auchterarder. The next nearest pharmacies are found in Crieff at a distance of approximately 9 miles. The panel noted the population of Auchterarder is about 4000 and that the list size of the St Margaret's Health Centre is approximately 8500. Some evidence was available to the Panel of new housing, however it was felt that there was unlikely to be a significant increase in population in the foreseeable future. The Panel recognised that residents of a number of villages, hamlets and individual dwellings surrounding Auchterarder are likely to choose to access a number of services and facilities within the town including pharmaceutical services. It was noted by the Panel that Lloyds Auchterarder does offer a comprehensive range of pharmaceutical service meeting the core requirements, but they required to have regard to the public consultation exercise undertaken by Tayside Health Board which attracted 414 responses of which, all but one favoured the granting of this application. The Panel observed that this was an exceptionally high response rate. The Panel recognised that many of the responses related to issues irrelevant to consideration of the granting of an NHS contract, however it was clear that there was significant concern among respondents regarding waiting times for prescriptions, stock availability and errors. The Panel further noted the letters of support submitted and had regard to the views of the local GPs. The Panel had concerns regarding the methodology adopted in the research undertaken by Lowland and did not attach undue significance to its findings although it did recognise that its findings and conclusions presented a similar pattern to those of the Health Board consultation. While the Panel recognised the efforts made by Lloyds Auchterarder to address these issues - for example in extending its opening hours and reorganising its premises - the Panel concluded, in its expert opinion, that the current provisions of pharmaceutical services to the population of the neighbourhood was inadequate. In particular the Panel found that the high volume of prescriptions being handled by Lloyds Auchterarder has resulted in unacceptable waiting times. The Panel therefore concluded that it was necessary to grant the application in order to secure pharmaceutical services in the defined neighbourhood. It did accept that the granting of the application might go further and result in a degree of over-provision. The Panel accepted that pharmaceutical services are available to the residents of Auchterarder but the level of services provided is inadequate. Granting of the contract would result in an over-provision of pharmaceutical services but the Panel considered that it was desirable to grant the application in order to secure adequacy.

18. It was the view of the Panel that the existing provision of pharmaceutical services in the neighbourhood was inadequate and that the provision of pharmaceutical services at the premises was desirable in order to secure the adequate provision of pharmaceutical services in the neighbourhood to which the premises were located by persons whose names are included in the Pharmaceutical List. In the circumstances it was the decision of the Panel that the appeal be refused."

Submissions of Parties
Petitioner
[11] Mr Lindsay explained that it was his submission that in two respects the decision of the first respondent was unlawful and accordingly should be reduced: first, the first respondent had erred in law in that it failed properly to consider the "necessary or desirable" criterion provided by Regulation 5(10); and second, the first respondent had failed to provide adequate and comprehensible reasons for its decision in circumstances where it had so recently determined that there was adequate provision of pharmaceutical services in the relevant neighbourhood. If the court were with him on either point, it was Mr Lindsay's submission that the appropriate remedy was declarator and reduction, rather than a remit to the first respondent to provide further reasons.

[12] In developing his submission that the first respondent had failed properly to understand and therefore properly to apply Regulation 5(10), Mr Lindsay adopted what had been said by Sedley LJ in respect of (different) English Regulations in R(Assura) a Pharmacy Ltd v E Moss Ltd [2008] EWCA Civ1356: the relevant legislation sets a deliberate hurdle of pharmaceutical necessity or desirability before a competitor is to be allowed into the same High Street as the pharmacist who got there first. However, while in England a more holistic approach had been adopted to the application of similar regulations, in Scotland the Inner House has emphasised that Regulation 5(10) requires the decision maker (the Pharmaceutical Practice Committee or the National Appeal Panel) to take two distinct and separate steps in determining whether an application to be included in the Pharmaceutical List should be granted. The first step is to consider whether the existing provision of pharmaceutical services in the relevant neighbourhood is inadequate. The second step is to consider the question of how the deficiency is to be remedied. It is at this point that the decision maker must consider whether the proposal in the application is "necessary or desirable in order to secure adequate provision of pharmaceutical services in the neighbourhood". Thus, submitted Mr Lindsay, it does not follow "as night follows day" that if the existing provision is not adequate, then the decision maker must grant the application. The first respondent had not kept that in view in the present case, as appears from paragraph 17 of the decision. Having concluded that the current provision of pharmaceutical services to the population of the relevant neighbourhood was inadequate, the first respondent "therefore concluded that it was necessary to grant the application in order to secure pharmaceutical services". That was to conflate the two steps into one, with the result that the first respondents had not applied itself to the questions as to whether or not the particular application before it was "necessary or desirable" in order to secure adequate provision. This amounted to an error of law.

[13] Mr Lindsay turned to what he alleged had been a failure on the part of the first respondents to set out comprehensible reasons. The rationale for the duty of a decision maker to provide reasons is discussed by Lord Reed in the Chief Constable v Lothian & Borders Police Board 2005 SLT 315. What is required by way of reasons is identified by Lord Brown in South Bucks District Council v Porter (No2) [2004] 1 WLR 1953 at para 36 (cited by Lord Glennie in United Co-operative Ltd v National Appeal Panel 2007 SLT 831 at 842). As had been said by Lord Brown, reasons require to show how any issue of fact or law had been resolved. Here the first respondent had failed to do this in relation to the question as to whether the existing provision of pharmaceutical services was adequate. This was an issue which had to be determined by the first respondent. It had been the subject of competing submissions in the course of the appeal. There had been recent decisions to contrary effect as to the adequacy of pharmaceutical services in Auchterarder. In the absence of any apparent change of circumstances, there was a real question as to why it was said by the first respondent in this appeal that existing provision was inadequate. The decision simply did not provide an explanation.

[14] In anticipating the argument which was to be advanced on behalf of the third respondent, Mr Lindsay addressed the question of remedy. He sought reduction of the first respondent's decision rather than a remit to the first respondent to expand upon its decisions for the reasons that had commended themselves to Lord Reed in The Chief Constable of Lothian & Borders v Lothian & Borders Police Board supra. The decision complained of was, in his submission, unlawful and therefore should be reduced on that count, but even if that was wrong, it was inappropriate in all the circumstances to remit to the first respondent. There is no question about the good faith of the first respondent but with the best will in the world it could not be expected to provide accurate reasons at this distance of time from the hearing.

First respondent
[15] Mr Ellis took no issue with Mr Lindsay's exposition of how Regulation 5(10) should be applied. However, he submitted, it was to be borne in mind that the first respondent was an expert decision maker on questions of adequacy of provision of pharmaceutical services. Determining what was or was not adequate involved an exercise of judgment and a decision was only amenable to explanation to a certain extent. If the second stage of the test was to be gone through in a rational manner, it was first necessary to consider what was the gap or shortfall of provision that had to be filled. It was Mr Ellis's submission that when one looked at the shortfall identified by the first respondent, it was obvious why a second pharmacy would meet that shortfall. When one goes to the first respondent's decision, one can see that the shortfall in the provision was identified by reference to the high number of prescriptions resulting in long waiting times. Given that that was the shortfall, it is straightforward to see that it would be rectified by admitting another pharmacy to the List, albeit that this would result in a degree of over‑provision. There are cases where the precise nature of the provision offered by an applicant is an issue. This was not one of these cases. Here the whole dispute was about ordinary services which it was accepted the third respondent was in a position to provide. That set the context. Here there was no reason to discuss whether a particular service would fill the identified gap. Similarly, there was no need to address questions of access, albeit they had been mentioned in relation to a previous application, in that it was not suggested that the inadequacy identified by the first respondent had anything to do with a difficulty in accessing the existing premises of the petitioner. The court should be slow to infer that things had gone wrong: South Bucks District Council v Porter (No.2) supra. The first reason put forward by Mr Lindsay for reduction of the decision should be rejected.

[16] Similarly, Mr Ellis submitted, the contention that the first respondent had provided inadequate reasons should be rejected. The adequacy of reasons depended on circumstances: Safeway Stores Plc v National Appeal Panel 1996 SC 37 adopting the tests for sufficiency of reasons set out in Albyn Properties Ltd v Knox 1977 SC 108 and Wordie Property Co Ltd v Secretary of State for Scotland 1984 SLT 345. The authorities supported the following propositions: (1) Reasons should not be read with excessive legalism; (2) Necessity and desirability were concepts involving fact and degree which were not susceptible to detailed legal analysis; (3) Reasons in a case such as the present need only refer to the main issue and not every consideration, even if it were a material consideration; (4) That a particular factor is not mentioned does not mean that it has not been considered; (5) Whether reasons are adequate depends on the particular circumstances of the case; and (6) A challenge will not succeed unless the party making the challenge has not suffered substantial prejudice. Moreover, it could not be the case that the obligation to give reasons was enhanced simply because different decisions had been made on previous occasions. It was quite possible for different decisions on the question of adequacy of pharmaceutical provision to be reached on essentially the same facts. In any event it was not the case that precisely the same information had been before the first respondent in 2011 as had been before it in 2010. It was sufficient to refer to unacceptable waiting times in order to explain the basis for a finding of inadequacy. It was excessively legalistic to require an explanation as to what is meant by an unacceptable as opposed to an acceptable waiting time. The points made by the petitioner in its evidence to the first respondent that waiting times were on average 7 to 8 minutes, that a "mystery shopper" survey had indicated high levels of satisfaction and that there was a permanent pharmacist manager at the petitioner's Auchterarder premises must be taken to have been accepted by the first respondent, but accepting these points did not mean that the first respondent was not entitled to conclude that waiting times were excessive. A "mystery shopper" survey provides only a very brief snapshot.

Third respondent
[17] Miss Carmichael, on behalf of the third respondent, adopted the submissions made by Mr Ellis on behalf of the first respondent. The only additional point she took was in relation to the alternative remedy. She accepted that if the court held that the first respondent had erred in law in its application of the terms of Regulation 5(10), then it would be appropriate to reduce the first respondent's decision. However, were the court to find against the petitioner on its first criticism of the first respondent's decision but uphold its submission that the reasons given by the first respondent were inadequate, Miss Carmichael submitted that the appropriate remedy would be to remit to the first respondent to provide more extensive reasons. This is what had been done by the Second Division in Safeway Stores Plc v National Appeal Panel supra. The remit there had not been expressly of consent and, accordingly, the case provided a binding precedent for the competency for such remedy: Elder v Elder 1985 SLT 471. On this matter the court should not follow the opinion of Lord Reed in Chief Constable of Lothian & Borders v Lothian & Borders Police Board. Reference was made to R v Soneji [2006] AC 340 at paras 23 and 30, R (Nash) v Chelsea College of Art & Design [2001] EWHC Admin 538 and R (B) v Murton London Borough Council [2003] EWHC (Admin) 1689. The court should not conclude that in enacting the Regulations in the terms that it did, Parliament is to be understood as having intended that the decision should be quashed if inadequate reasons were given. Here not too long a period of time had passed since the date of the decision and it would be unfortunate if the third respondent were to suffer from a failure to give reasons on the part of the first respondent without any fault on its part. Miss Carmichael accepted that the remedy of a remit was not one frequently adopted by the court but it was a course that it had been taken and it was supported by the authority.

Discussion and decision
[18] This application gives rise to three questions for resolution:

(1) Is the first respondent to be taken to have erred in law in accepting that the third respondent's application met the criterion set out in Regulation 5(10)?

(2) Did the first respondent provide adequate reasons for its decision that the provision of pharmaceutical services in the relevant neighbourhood was inadequate? and

(3) In the event of the third question being answered in the negative is the competent and appropriate remedy to reduce the decision or is it to remit to the first respondent to provide further reasons?

[19] Looking at the first question, there was no dispute as to the correct construction of Regulation 5(10) and therefore the proper approach to determining whether a particular applicant should be admitted to the Pharmaceutical List. Thisat is the authoritatively explained in the opinion of the court delivered by Lord Drummond-Young in Lloyds Pharmacy Ltd v National Appeal Panel supra. It is a two-stage test. Having identified the relevant neighbourhood, the decision maker must first consider whether the existing provision of pharmaceutical services in that neighbourhood is adequate. If it decides that such provision is adequate, that is the end of the matter and the application must fail. However, if the decision maker determines that such provision is not adequate, it must go on to consider a second question: whether the provision of a pharmaceutical services at the premises named in the application is "necessary or desirable" in order to secure adequate provision. It was Mr Lindsay's submission that in the present case the first respondent had not worked itshis way through that two-stage test. Rather, its decision, as Mr Lindsay put it, "reads as if" inadequacy of provision is simply to be equated with the necessity or desirability of provision at the premises named in the application. Mr Lindsay drew attention to the economical terms in which the first respondent had stated its reasoning:

"...the Panel concluded in its expert opinion that the current provision of pharmaceutical services to the population of the neighbourhood was inadequate. In particular the Panel found that the high volume of prescriptions being handled by Lloyds, Auchterarder has resulted in unacceptable waiting times. The Panel therefore concluded that it was necessary to grant the application in order to secure pharmaceutical services in the defined neighbourhood".

To have concluded, as the first respondent stated it had, from its finding of unacceptable waiting times that it was "therefore" necessary to grant the application indicateding that the first respondent had gone from the first stage to its final decision without having addressed the second stage at all.

[20] Notwithstanding the economy of its language, I am not persuaded that the first respondent should be taken to have failed properly to consider the second stage of the two-stage test approved in Lloyds Pharmacy Ltd v National Appeal Panel. As is observed in that case, the first respondent is a specialist decision maker. That does not of course mean that it may not have approached its decision-making improperly, but where, as here, the relevant test is set out atin several points in the decision it is not to be readily inferred that the test has been misunderstood, misapplied or simply forgotten about: cf. South Bucks District Council v Porter (No2) supra at para 36. Admittedly, Mr Lindsay did not suggest that the first respondent had forgotten that it had to apply the two-stage test but he did suggest that it had failed to do so. His contention was that the first respondent had erred in proceeding on the basis that having concluded that provision of pharmaceutical services in the neighbourhood was inadequate, it assumed that it inevitably followed that it could be satisfied that the provision of pharmaceutical services at the premises named in the application was necessary or desirable in order to secure adequate provision. At this stage Mr Lindsay's criticism shades from error of law into inadequacy of reasoning. In South Bucks District Council, in a passage that I shall quote below, Lord Brown, having reviewed the authorities, observed that reasons need refer only to the main issues in dispute, not to every material consideration, and that it was to be borne in mind that decision letters must be read in a straightforward manner recognising that they are addressed to parties well aware of the issues involved and the arguments advanced. The reasoning must not give rise to a substantial doubt as to whether the decision-maker erred in law but such adverse inference will not readily be drawn. In the present case, the decision letter extends to some 15 pages. It narrates in some detail what had been put forward on behalf of the petitioner and the third respondent by their respective representatives. There iwas some discussion about the extent of the relevant neighbourhood but that was ancillary to what was clearly the main issue before the first respondent which was the adequacy of the services provided by the petitioner. While the matter of access was touched on, in the context of the third respondent's premises being located not far from those of the petitioner, and a question was asked of the third respondent's representative as to why he was concentrating on the negative aspects of the service currently provided by the petitioner rather than to promote the services which the third respondent would be able to provide, no issue was taken over the suitability of what the third respondent proposed to provide at its premises to make up such shortfall as might be identified. The third respondent's representative simply referred to his documentary productions for a description of the services and explained that his oral presentation would be about current inadequacy. The petitioner's representative made no adverse comment on what the third respondent proposed. The reality therefore was that in the event of it being decided that the existing provision of pharmaceutical services was inadequate, it would follow that there was a need for an additional pharmaceutical services and no question but that the third respondent's proposal was such as to meet that need and more. It is to be borne in mind that there was only one application. It is not as if the first respondent had to choose among a number of competing applications. There was accordingly very little that either needed to be said or could be said by way of explanation as to how the first respondent had gone through the second stage of the two-stage test. Looking to the whole of the decision, I would see it to be clear that the first respondent was aware of the statutory test that it had to apply. I am not prepared to infer that it did not apply it.

[21] Mr Lindsay's second criticism was that the first respondent failed to provide adequate and comprehensible reasons for its conclusion that the provision of pharmaceutical services to the population of the relevant neighbourhood was inadequate.

[22] I did not discern in Mr Ellis's series of propositions taken from Albyn Properties Ltd v Knox and Wordie Property Co Ltd v Secretary of State for Scotland as applied to the first respondent in Safeway Stores Plc v National Appeal Panel, any significant difference as to what is required by way of sufficient reasons from the summary following his review of the English case by Lord Brown in South Bucks District Council v Porter (No2). Like Lord Glennie in United Co-op Ltd v National Appeal Panel for Entry to the Pharmaceutical Lists supra, I shall therefore take what

Lord Brown said at para 36 of his speech in South Bucks as a convenient statement of the law:

"The reasons for a decision must be intelligible and they must be adequate. They must enable the reader to understand why the matter was decided as it was and what conclusions were reached on the 'principal important controversial issues', disclosing how any issue of law or fact was resolved. Reasons can be briefly stated, the degree of particularity required depending entirely on the nature of the issues falling for decision. The reasoning must not give rise to a substantial doubt as to whether the decision-maker erred in law, for example by misunderstanding some relevant policy or some other important matter or by failing to reach a rational decision on relevant grounds. But such adverse inference will not readily be drawn. The reasons need refer only to the main issues in the dispute, not to every material consideration. They should enable disappointed developers to assess their prospects of obtaining some alternative development permission, or, as the case may be, their unsuccessful opponents to understand how the policy or approach underlying the grant of permission may impact upon future such applications. Decision letters must be read in a straightforward manner, recognising that they are addressed to parties well aware of the issues involved and the arguments advanced. A reasons challenge will only succeed if the party aggrieved can satisfy the court that he has genuinely been substantially prejudiced by the failure to provide an adequately reasoned decision."

[23] I accept, as Mr Lindsay submitted, that given the decision of the chair of the first respondent on 1 August 2009 and the first respondent on 6 May 2010 respectively dismissing Mr Doherty's appeal and allowing the petitioner's appeal in respect of an earlier application by the third respondent, both decisions being made on the basis that the current provision was not shown to be inadequate, the outcome of the appeal determined by the decision under review was not inevitable. In other words, there was a real issue to be determined which might have been capable of going either way. However, agreeing with Mr Ellis, I do not see that as imposing a more exacting obligation on the first respondent to give reasons when framing its decision of 1 August 2011 than would otherwise have been the case. The obligation to address the question of adequacy of provision arose because it was a "principal controversial issue", in the words of Lord Brown, the basis of resolution of which had to be disclosed. Mr Lindsay submitted that the first respondent gave no explanation as to how this issue, on which there had been competing submissions, had been resolved. I disagree.

[24] Adequacy of provision is no doubt a question of fact but, as Mr Ellis submitted, it is of the nature of a conclusion to be determined by an exercise of judgement by an expert decision-maker. There was force in Mr Ellis's observation that it is possible for different decisions on the question of adequacy of pharmaceutical services to be reached on essentially the same facts. The decision-making process is one which requires an inference (of adequacy or inadequacy) to be drawn from such primary facts as are accepted by the decision-maker, it being for the decision-maker to determine what weight should be accorded to particular facts. The first respondent had before it evidence that the services being provided by the petitioner were of good quality and adequate for the relevant neighbourhood. That evidence and the critique of the evidence to contrary effect put forward on behalf of the third respondent is narrated at some length. In that it is not expressly rejected, as Mr Ellis submitted, it must be assumed that the first respondent accepted that evidence of primary fact. However, there was also evidence, particularly from the second respondent's statutory consultation, "indicating that there was significant concern among respondents regarding waiting times for prescriptions, stock availability and errors". At paragraph 17 of its decision letter, having noted the results of the consultation, the first respondent continues: "The Panel further noted the letters of support submitted and had regard to the views of local GPs" (at paragraph 7 of the letter the first respondent had recorded the third respondent's reference to local GPs having indicated that they wish to see another pharmacy in Auchterarder). While the first respondent was concerned over its methodology and accordingly did not attach undue significance to its findings, the market research report commissioned by the third respondent presented a similar pattern to the second respondent's consultation.

[25] Mr Lindsay emphasised the very brief terms in which the first respondent expressed its conclusion and the reason for coming to it:

"While the Panel recognised the efforts made by Lloyds Auchterarder to address these issues [waiting times for prescriptions, stock availability and errors] - for example in extending its opening hours and reorganising its premises - the Panel concluded, in its expert opinion, that the current provisions of pharmaceutical services to the population of the neighbourhood was inadequate. In particular the Panel found that the high volume of prescriptions being handled by Lloyds Auchterarder has resulted in unacceptable waiting times."

This may be brief reasoning but, in my opinion, it provides a comprehensible explanation for the first respondent's conclusion. It identifies the pieces of primary evidence to which it gave weight. The sources of that evidence (the statistics on prescriptions and the public consultation) are clearly identifiable. The first respondent's conclusion did not involve the rejection of any primary facts founded on by the petitioner and therefore it did not require to explain why some evidence had been preferred over other evidence. Mr Lindsay was constrained to accept that very little was required by way of reasoning in the circumstances. I agree with that. Where I disagree is with Mr Lindsay's submission that what was provided was insufficient. In my opinion, there was enough to satisfy the criteria set out in Lord Brown's summary in South Bucks District Council v Porter (No2) supra. I shall therefore uphold the second plea-in-law for the first respondent and the second plea-in-law for the third respondent and refuse petition. I reserve all questions of expenses.

[26] Given my decision on the merits of the petition I need not decide whether the competent and appropriate remedy for a failure to give adequate reasons in this case would be to reduce the decision or to remit to the first respondent to provide further reasons. The question is not an easy one and the time constraint imposed by a one-day hearing did not allow for a very full development of counsel's arguments. It was discussed at length by Lord Reed in his opinion in The Chief Constable of Lothian & Borders v Lothian & Borders Police Board supra but while I find Lord Reed's analysis persuasive, it does not sit easily with what the Inner House was prepared to countenance in Safeway Stores Plc v National Appeal Panel supra. There are issues to be resolved and they may not be capable of resolution in the Outer House but they are issues for another day.