Rahman & Anor, R (on the application of) v Harringey NHS Teaching Primary Care Trust [2007] EWHC 584 (Admin)

Case No CO/9131/2006[2007] EWHC 584 (Admin)
IN THE HIGH COURT OF JUSTICE
QUEEN'S BENCH DIVISION
THE ADMINISTRATIVE COURT
Venue Royal Courts of JusticeDate Friday, 2 February 2007
Strand
London WC2
B E F O R E:
MR JUSTICE LANGSTAFF
Between
THE QUEEN ON THE APPLICATION OF DR RAHMAN, DR HOQUEClaimant-v-
Between
HARRINGEY NHS TEACHING PRIMARY CARE TRUSTDefendant
Computer-Aided Transcript of the Stenograph Notes ofWordWave International LimitedA Merrill Communications Company190 Fleet Street London EC4A 2AGTel No: 020 7404 1400 Fax No: 020 7831 8838(Official Shorthand Writers to the Court)
MR JEREMY HYAMS AND MS LINDSAY-STRUGO (instructed by Radcliffes LeBrasseur) appeared for CLAIMANTMR DAVID BRADLY (instructed by Messrs Capsticks) appeared for DEFENDANT
J U D G M E N T
[1]MR JUSTICE LANGSTAFF: This claim for judicial review is brought, despite the parties identified on the face of it, only by Drs Raman and Hoque. Dr Pal, for reasons which are not material, no longer participates in it.[2]By this claim, the doctors essentially put in issue the proper meaning to be given to a phrase "material financial loss", which derives from regulations and a so-called contract which they entered into in 2004 with the defendant. A secondary issue (with which I shall spend less time) is whether or not decisions made by the defendant under that contract were perverse. The statutory framework[3]A contract for general medical services is called a contract. However, it is provided in the National Health and Community Care Act 1990 that what are called contracts are legal arrangements. They have by law no contractual effect.[4]The position adopted under section 4 of the 1990 Act is echoed in regulations made under it which provide for general medical services contracts. Those are the National Health Service (General Medical Services Contracts) Regulations 2004 (No 291). That provides materially that in the case of a contract to be entered into with a medical practitioner that practitioner must be a general medical practitioner. By Regulation 4(2), in the case of a contract to be entered into with two or more individuals practising in partnership, at least one partner must be a general medical practitioner and any other partner who is a medical practitioner must be a general medical practitioner or be employed by a Primary Care Trust and various other National Health Service bodies.[5]There is a general condition under Regulation 5 which applies to all contracts; that is, that the medical practitioner or any individual, or the partnership in the case of a partnership, must not fall within paragraph 2 of Regulation 5. Paragraph 2 applies to those who are the subject of a national disqualification or suspension other than by interim suspension order or direction pending an investigation from practising by any licensing body anywhere in the world, and various other provisions.[6]The regulations provide by schedule 6 for contractual terms which are to be made between a health care provider (such as the defendant), and a so-called contractor, in this case a GP practice operated by the claimants in partnership.[7]Part 7 of the schedule provides for what is called "Local Resolution of Contract Disputes", dispute resolution for non-NHS contracts and then at paragraph 101 for NHS dispute resolution procedures. That provides for reference of any dispute which arises to a detailed procedure. It is plain to me that the purpose is to ensure that there is a body which is qualified which is reasonably independent of the parties which is able to determine any significant issue which is in dispute between them.[8]Part 8 is about variation and termination of contracts. So far as termination is concerned, it provides materially:
"110. The Primary Care Trust may only terminate the contract in accordance with the provisions in this part."
Paragraph 111 provides:
"The Primary Care Trust shall serve notice in writing on the contractor terminating the contract forthwith if the contractor is an individual medical practitioner and the medical practitioner no longer satisfies the condition specified in regulation 4(1)." (Regulation 4(1) is the regulation to which I have already referred). Subparagraph (2) provides: "
Where the contractor is - (a) two or more persons practising in partnership, and the condition specified in regulation 4(2)(a) is no longer satisfied;" In such a case 111(3) applies, which is that the Primary Care Trust is to serve notice in writing on the contractor terminating the contract forthwith or a notice in writing confirming that the Primary Care Trust will allow the contracts to continue for a period of up to six months known as the interim period. During that time the Primary Care Trust is, with the consent of the contractor, to employ or supply one or more general medical practitioners to the contractor for the interim period to assist the contractor in the provision of clinical services under the contract.[9]Thus, it is plain that the statutory framework envisages that the Primary Care Trust may be put to the expense of employing general medical practitioners for up to six months whilst the contract continues. There are provisions otherwise for termination. Paragraph 114 provides:
"The Primary Care Trust may serve notice in writing on the contractor terminating the contract forthwith or with effect from such dates as may be specified in the notice if - (a) the contractor has breached the contract and as a result of that breach, the safety of the contractor's patients is at serious risk if the contract is not terminated; or" - and I note that word - "(b) the contractor's financial situation is such that the Primary Care Trust considers that the Primary Care Trust is at risk of material financial loss."
[10]Paragraph 115 provides for termination by the Primary Care Trust following a procedure of remedial notices and breach notices. It indicates the general scope of these provisions in its opening words. "Where a contractor has breached the contract other than as specified in paragraphs 111 to 114 and the breach is capable of remedy ..." And it goes on to provide for a remedial notice to be served and for termination of the contract if, following the service of such a notice, there is a repeated breach.[11]Section 117 provides for contract sanctions to be imposed. They include the suspension of specified reciprocal obligations under the contract for a period of up to six months. They include withholding or deducting monies otherwise payable under the contract. It is to be noted that in subparagraph (5) it is provided:
"... the Primary Care Trust shall not impose the contract sanction until at least 28 days after it has served notice on the contractor pursuant to paragraph (4) unless the Primary Care Trust is satisfied that it is necessary to do so in order to - (a) protect the safety of the contractor's patients; or (b) protect itself from material financial loss."
The wording there "protect itself from material financial loss" is different from the wording in 114.

(b) the wording is:

"the contractor's financial situation is such that the Primary Care Trust considers that the Primary Care Trust is at risk of material financial loss."
[12]In 118 there is a provision for contract sanctions imposed to be referred to the NHS dispute resolution procedure. By subparagraph (4) it is provided:
"If the Primary Care Trust is satisfied that it is necessary to impose the contract sanction before the NHS Dispute Resolution procedure is concluded in order to - (a) protect the safety of the contractor's patients; or (b) protect itself from material financial loss, The Primary Care Trust shall be entitled to impose the contract sanction forthwith ..."
[13]One then comes to paragraph 119. It is headed "Termination and the NHS dispute resolution procedure". 119(1) provides:
"Where the Primary Care Trust is entitled to serve written notice on the contractor terminating the contract pursuant to paragraphs 112, 113, 114 [to which I have already referred] or 115(4) or (6), the Primary Care Trust shall, in the notice served on the contractor pursuant to those provisions, specify a date on which the contract terminated that is not less than 28 days after the date on which the Primary Care Trust has served that notice on the contractor unless sub-paragraph (2) applies. (2) This sub-paragraph applies if the Primary Care Trust is satisfied that a period less than 28 days is necessary in order to - (a) protect the safety of the contractor's patients; or (b) protect itself from material financial loss. (3) In a case falling within sub-paragraph (1), where the exceptions in sub-paragraph (2) do not apply, where the contractor invokes the NHS dispute resolution procedure before the end of the period of notice referred to in sub-paragraph (1), and it notifies the Primary Care Trust in writing that it has done so, the contract shall not terminate at the end of the notice period but instead shall only terminate in the circumstances specified in subparagraph (4)."
That provides that it will only terminate if and when there has been a determination of the dispute through the NHS dispute resolution procedure.[14]Subparagraph (5) provides:
"If the Primary Care Trust is satisfied that it is necessary to terminate the contract before the NHS dispute resolution procedure is concluded in order to - (a) protect the safety of the contractor's patients; or (b) protect itself from material financial loss Sub-paragraphs (3) and (4) shall not apply and the Primary Care Trust shall be entitled to confirm, by written notice to be served on the contractor, that the contract will nevertheless terminate at the end of the period of the notice it served ...."
Those provisions of schedule 6 are in this case echoed by the contract for general medical services, which was in fact entered into between the parties. That, so far as material, emphasises in its opening provisions that the contract creates no right enforceable by any person who is not a party to it; nor does it create a contractual obligation. Accordingly, any dispute arising under the contract is not a matter for the common law courts. It is common ground between the parties before me that this court is an appropriate court to determine the particular dispute which has arisen, as will be seen at paragraph 591 of the contract.[15]The contract following the pattern of the schedule to the regulations provides for grounds of termination by the PCT (clause 560). At clause 565 the contract provides, again in very similar terms to those I already considered. "The PCT may serve notice in writing on the Contractor terminating the Contract forthwith or with effect from such date as may be specified in the notice if -565.1 the Contractor has breached the Contract and the PCT considers that as a result of that breach, the safety of the Contractor's patients is at serious risk if the Contract is not terminated; or.565.2 the Contractor's financial situation is such that the PCT considers that the PCT is at risk of material financial loss." It is said, anticipating the facts which I will recount, that in this case the PCT was not entitled to serve the notice it did, which it did purporting to rely upon 565.1.[16]However, it is now accepted, though not initially accepted in the grounds of application to this court, that that is not an appropriate subject for judicial review because the dispute has, again as will be seen, been referred to the NHS dispute resolution procedure.[17]Under the general heading "Termination and the NHS dispute resolution procedure" clause 591 provides, again in familiar terms: "If the PCT is satisfied that it is necessary to terminate the Contract before the NHS dispute Resolution procedure is concluded in order to protect the safety of the contractor's patients or protect itself from material financial loss, clauses 589 and 590 shall not apply ..." - those are clauses which provide for the continuation of the contract providing that the contractor has invoked the in NHS dispute resolution procedure before the end of the period of notice first given - "and the PCT shall be entitled to confirm by written notice to be served on the Contractor, that the Contract will nevertheless terminate at the end of the period of notice it served pursuant to ..." - relevantly here, clause 565.[18]In construing the words "material financial loss", I must have regard to the context within which the contract is made as indicated not only by its own terms but by the statutory framework which underpins it. The pattern of the contract follows that of the regulations.[19]It is contended by Mr Bradly, for the defendant, that the words "material financial loss", mean any expense which is more than merely minimal. For the claimants, through Mr Hyam, it is contended that those words mean effectively a loss, not an expense; that to be material it must be substantial and that it is not such upon a proper view of the regulations as to cover the cost of engaging locum cover during a period of effective suspension of doctors from practice.[20]Returning to the principles of construction applicable, it is plain from the structure that, as one would expect, a contract is to be terminated on notice. The power to terminate upon less than notice is a derogation from the general principle. The general provision is to provide for an appeal to an independent resolution body by the contractor. Again the power effectively to end the contract before an independent body has decided whether it is proper to do so is a derogation from what would otherwise be the general position. Accordingly, it seems to me that any words providing for such an exception are, on general principles, to be construed strictly rather than liberally, and if in doubt in favour of the contractor rather than in favour of the PCT.[21]A second aspect of the context is that it is plain that the word "material financial loss", as used in 591, echo, though they do not replicate, the words relating to loss in 565, and in this respect they copy the echo and not the replication which is to be found in schedule 6 as between 119 and 114.[22]It follows, it seems to me, that the context apparent from the regulations is the context within which the contract itself is made, and is relevant to any question of construction which arises.[23]Next, it seems to me that the word "material", is a qualification to the words "financial loss". It is not financial loss: it is "material financial loss." The force of it is that "material" means, in my view, "significant and relevant"; not simply "significant". I reject the submission that more than merely minimal expense can, upon a proper understanding of the words in this context, amount to material financial loss. But that does not mean that the claimants must necessarily succeed upon their construction of the phrase.[24]The provision in 565 is, as I have said, echoed by 591. It gives alternative grounds upon which a notice terminating the contract may be raised. In argument, it was not immediately apparent what situations might expose a PCT to a risk of material financial loss within 565. It may, however, be that the draftsman had in mind that if the contractor was in dire financial straits, that the PCT itself might be exposed to paying sums to the contractor which it could not thereafter recover for breach, being regarded, for instance, as a creditor in the administration of the contractor's affairs. It may be that it refers to potential losses arising from actions taken against the PCT by individuals who have a legitimate basis for claiming that the PCT was in some way responsible for failing itself to perform its duties or exercise its powers in respect of the general practice concerned.[25]These are necessarily speculative possibilities in construing a contract which is designed to cover a number of different parties, and a number of different situations and is expressed in general terms. Confirmatory perhaps of the argument addressed to me (though after oral argument in court had finished) by Mr Hyam on paper is that it might relate to the possible bankruptcy of individuals concerned as general practitioners and potential losses arising thereby. It is to be noted that a ground for termination includes (see 560.91, 560.92, 560.93, 560.94, 560.95 and 560.96) situations of bankruptcy, arrangements with creditors, insolvency, administration and administrative receivership.[26]What is envisaged by 565 is that the continuation of the contract in the way in which it has up until then been performed, would either prejudice patient safety or potentially give rise to material financial loss. It might of course be both.[27]There must be a need to terminate a contract -- the word "necessary", appears -- prior to a resolution procedure. As thus, it seems to me to have to be read not standing on its own, independently, but by asking whether the continuation of the contract, as it has been performed by the contractor concerned, is likely to expose patients to risk, on the one hand; or expose the PCT to financial loss, on the other; or, as it may be, for both. It does naturally cover a situation in which the PCT has itself exercised its powers to arrange that it will provide locum cover and then terminate the contract because of the expense of doing so.[28]In the course of his submissions to me Mr Hyam raised an interesting argument which he claimed demonstrated that within the meaning of this part of the contract the phrase "material financial loss" had a limited force. He drew attention to the fact that 552(a), a clause which appears under the general heading "Termination by the PCT for breach of conditions in regulation (4) of the Regulations", provided that where the failure of an individual medical practitioner to continue to satisfy the condition specified in regulation 4(1) is the result of a suspension specified in 554B, clause 552 (that is a clause terminating the contract forthwith) shall not apply unless:
"552A.1 the Contractor is unable to satisfy the PCT that it has in place adequate arrangements for the provision of clinical services under the Contract for so long as the suspension continues; or 552A.2 the PCT is satisfied that the circumstances of the suspension are such that if the Contract is not terminated forthwith - 552A.2.1 the safety of the Contractor's patients is at serious risk; or. 552A.2.2 the PCT is at risk of material financial loss."
He points out that this scheme provides a modification to what had originally been the position. It provides that suspension of a practitioner, which would otherwise be a ground for termination of the contract, will not so operate where, in effect, the contractor provides for a locum to take over. The locum is, of course, to be paid by the PCT. Therefore, it would be inconsistent with that general scheme if the fact that the PCT was paying the locum was said to create the risk of material financial loss upon which the PCT could itself rely. It would mean that in any such case the PCT would be entitled simply to say, "We are paying for a locum, therefore we are entitled forthwith to terminate the contract".[29]The words "material financial loss" in that context therefore cannot, he argues (in my view, with force) mean the cost of providing for the interim cover; rather it contemplates those financial losses which would arise if the contract were to continue to be performed in the way which the PCT had regarded as improper. If, his argument goes, that is the proper meaning of "material financial loss" in that context, the same words repeated as they are in 591 cannot in that context have a different or wider force.[30]I regard this argument as supportive of the conclusion to which independent of it I would in any event have come. What is envisaged by material financial loss is not the expense of interim arrangements imposed by a PCT or resulting from arrangements made at their instigation to provide for patient safety in the meantime or, for that matter, to provide for proper financial administration such that there is no material financial loss itself. Rather, it seems to me that the financial losses which are contemplated are those of the general kind which would give rise to a right to terminate in the first place. It is only in this way that, as I see it, that coherence can be given to the regulations.[31]I acknowledge that it may be said that the words speak for themselves:
"material" is not "immaterial", "financial" is "money", "loss" is "money which would not otherwise have to be spent"
. There is undoubtedly force in those submissions, which Mr Bradly made effectively but, for reasons I have given, I prefer the construction which Mr Hyam has advanced and which I have expanded upon above.[32]Supporting that analysis of the law, I note simply that it would be a surprising result if the construction were other than I have determined it should be. If it were other, there would be no room for a practical suspensory policy to be adopted suspending a contractor or a member of the partnership from practice, which would not be open to the PCT saying, "The cost of this is more than we would otherwise have to bear, therefore we are entitled forthwith to terminate the contract". It has to be borne in mind that the protections, as I see it, within the contract and the regulations, are intended to secure a balance between the rights of a practitioner who, as a contractor, will depend upon the contract for his livelihood and will have responsibility to others whom he employs, as for instance practice nurses and practice managers, dispensers, secretaries, receptionists, cleaners and the like. The facts[33]In February 2006 concerns were expressed by a doctor who was working in and for the partnership of the claimants about the activities of another doctor in the practice (not one of the claimants). That led to investigations and a report which was produced on 8th August 2006. It was a report produced by a group known as the "Performance Advisory Group." That report drew conclusions about the general standard of record-keeping in the practice. It noted that there were no appropriate patient summaries in the computer records and no apparent system for updating the summaries; chronic disease management lacked structure and sufficient fail-safe measures; prescribing was inappropriate, not in keeping with guidelines; follow-up and review were inadequate; there was poor and inconsistent access to care; there were deficiencies in the management of acute illness and the diagnosis of long-term management of chronic diseases; the quality of prescribing, both acute and repeat, was poor; and there were severe deficiencies in the medical records.[34]The response of the claimants, it is said on their behalf, was constructive. They did not accept many of the criticisms but were prepared to work to improve the standards of the practice.[35]Things moved on and by the middle of September the PCT confirmed in a letter to the Medical Protection Society, who were corresponding on behalf of the claimants, that Dr Pal (who no longer takes part in these proceedings) and Dr Hoque should agree the termination of the contract and to remove themselves voluntarily from what is known as the "PCT performers' list", and undertake to apply for voluntary erasure from the register of the GMC. It was prepared to offer a salaried post to Dr Rahman.[36]A medical adviser was concerned with the practice and reported on 4th October. By this time it had been agreed that voluntarily the doctors would remove themselves from active practice within the practice and it was agreed that the PCT would, in effect, install a unit composed of locum doctors under the supervision of a senior medical practitioner and other relevant staff. Thus the remedy which the PCT invited the claimants to accede to -- and they did -- was considerably greater than would have been the cost of maintaining the contract as it had been performed. Estimates of the additional cost before me have varied, and plainly they were varied not only in amount but with time. However, it is anticipated that the costs over a six-month period additional to those which would otherwise have been incurred will come to a little short of £500,000.[37]On 6th October the defendant served notice of termination of the general medical services contract upon the claimants. It did so in accordance with clause 565. It did so for a serious breach upon the ground that the safety of the contractor's patients was at serious risk if the contract were not terminated. There was no suggestion within that notice (in extensive grounds which were set out) that it was any part of the decision of the PCT to terminate the contract that the PCT considered itself to be at risk of material financial loss.[38]In part of that background (pages 3 and 4 of the notice) is said this:
"The TPCTs [the defendants] medical advisers have completed their review of the material and produced a report dated 3rd October 2006. The report concludes that the Contractor has breached the Contract and that as a result of the breaches the safety of the Contractor's patients is at serious risk unless the Contract is terminated. The report also concludes that remediation is not a viable or reasonable option and that the only way to properly address the serious risk to patient safety is for the TPCT to terminate the Contract and put in place appropriate alternative arrangements on a formal basis. The TPCT has a duty to current and future patients to ensure that patients are provided with a service that is safe and of an appropriate standard. Given the findings of the PAG assessment and the TPCT's medical advisors, the PCT is satisfied that as a result of the identified breaches the safety of the Contractor's patients is at serious risk if the Contract is not terminated."
Following that, there were discussions between the parties which led within the period of notice to the solicitors acting on behalf of the claimants referring the matter to the NHS dispute resolution procedure. Accordingly, that had the suspensory effect provided for by the contract unless 591 applied.[39]By a letter of 18th October 2006 the PCT had given notice that if the contractor were to invoke the dispute resolution procedure and the PCT were satisfied that it was necessary to terminate the contract before the dispute resolution procedure was concluded in order to protect the safety of the contractor's patients or protect itself from material financial loss, it was entitled to confirm the written notice that the contract would terminate, and the date given in the notice. It indicates that the writers had taken their clients' instructions and could confirm that if the dispute resolution process were invoked it would serve notice. It gave no reasons.[40]When notice was given, the PCT indicated it would reconsider its position under 591 and, having done so, wrote again on 1st November 2006. In relation to patient safety at page 2 of the letter, it said this:
"Following receipt of the PAG report, at meetings with the PCT on 10th August 2006, the Contractors and the other General Practitioners performing the services under the contract agreed to voluntarily stay away from practice pending discussions between the parties and a decision on the way forward. It is also agreed that the PCT could move a team into the practice to ensure continuity of care to the Contractor's patients. As you appreciate, it was never intended that the current informal arrangement would be more than a short term solution to the problems at the practice."
At page 3, it dealt with the costs to the PCT of maintaining the current arrangements until the conclusion of the dispute resolution procedure and on the basis of expenditure under the present arrangement calculated those costs.[41]Under the heading "Material Financial Loss", it set out a figure which is within the general range I have already indicated as being the expense incurred, pending the likely date of resolution by the disputes resolution procedure, and in the third paragraph said:
"The PCT has already agreed ... that it will not put this Contract out for tender until there has been a determination of the dispute by the Appeal Unit. This is to ensure that were the Appeal Unit to find that the PCT should not have terminated the contract under clause 565 the Contract can be reinstated."
I draw attention to this only to make this point: there is no obligation under the contract for the PCT to refrain from putting the contract out to tender. It seems to me an inevitable consequence of a proper termination of a contract that a PCT may well choose to do so, notwithstanding that a dispute resolution procedure is ongoing. This, I think, emphasises the need for the contract to be construed in a way which properly ensures that the safeguards are in place, on the one hand with the practitioner, and, on the other, for the PCT and the members of the public to whom they are most importantly responsible.[42]It is that letter of 1st November 2006 which is essentially the subject of the argument before me. It is said, upon the grounds I have already adumbrated, by the claimants that the loss which is indicated is loss consequent upon actions taken by the PCT itself; it is expense rather than loss; it cannot come within the general heading of "material financial loss" as it is properly to be understood within the contract and regulations underpinning it, and therefore the PCT were not entitled to terminate the contract as at that date. The submissions to the contrary are those which I have already indicated.[43]In the light of my conclusion as to the proper approach to be taken to 591, it seems to me that the case for the claimant is, in this respect, made out and the claimant is entitled to relief.[44]A second issue was taken before me and taken first by Mr Hyam. That was that there was no proper basis for the defendant concluding that there was a risk to patient safety. He drew attention to the way in which Mr Bradly had expressed the issues in his skeleton argument. I need take little time on this. It is apparent, simply from looking at the conclusions expressed to the PCT by its medical adviser in October that, unless there was any significant evidence that was completely flawed or in bad faith, the PCT would be entitled to have regard to those conclusions. I do not in any sense wish to anticipate the result of the NHS dispute resolution procedures. It seems to me that there are proper and substantial grounds for asking whether or not there was indeed a risk to patient safety. However, the issue for me is whether, as at the date of issuing its notice, the PCT were entitled to do so upon the basis that there was -- and they had -- material before them which was reliable. It cannot be said that their decision was perverse. Whether it was wrong is a matter not for me, but for others. In so far as the challenge to the approach taken by the PCT rests on this ground, I entirely reject it.[45]Thirdly, I deal with an argument addressed to me by Mr Bradly. He suggested that it was open to the court not to come to any final determination as to the meaning of 591, but rather to approach the matter as if this were an application for an interim injunction: were it so, he would maintain that a balance of convenience was one way. The PCT had promised not to relet the contract pending the NHS dispute resolution determination. If that determination found in favour of the doctors, then they would be assured of payment: if it did not do so, then for the time being the PCT would have spent money which the doctors would not be entitled to, assuming that the interpretation of 591 is as he maintains it. Accordingly he submits that upon any interim injunction approach, no such injunction should be made. As to this, I observe, first, that I have grasped the nettle of determining, so far as I can, the proper meaning of 591. Secondly, I note that when this matter previously came before two judges of this court on an interim basis, each granted an interim injunction drawing necessarily the balance of convenience as seemed proper to them and drawing it in each case in favour of the doctors. Thirdly, I am impressed by Mr Hyam's response, which is that there is much more than the doctors' bank balance to be considered: they have employees; if they are unable to pay them by reason of the lack of continued receipt of the contract monies and the absence of ongoing contractual obligations, there will necessarily be redundancies and employment conditions. It renders recontinuation of the practice, if that should be the result of the determination, a practical impossibility. If I had been drawing balance of convenience, I have to say that I would have been inclined not to draw it in favour of the PCT; but, as I have indicated, that is a decision which I do not have to make and I should say no more about it other than to acknowledge the argument.[46]For those reasons and upon that basis, this claim seems to me to be well-founded.[47]MS LINDSAY-STRUGO: I am grateful, my Lord. In the matter of the order, there was an order attached to Mr Hyam's skeleton.

MR JUSTICE LANGSTAFF: Yes, let us have a look at that.

[49]MS LINDSAY-STRUGO: I think you have been provided with a copy of that.[50]MR BRADLY: My Lord, may I just make some observations about the order that your Lordship is considering.

MR JUSTICE LANGSTAFF: Yes, please.

[52]MR BRADLY: My Lord, that the decision be quashed the defendant accepts. But can I just make this observation about paragraph 2? There is now no prospect of this defendant seeking to terminate this contract again pending the outcome of the dispute resolution procedure, and that seems to me to be unnecessary.[53]MR JUSTICE LANGSTAFF: The only thing which is going through my mind is whether(a) I have the jurisdiction, and(b) whether I should include any provision as to the speed with which resolution is to be provided. I do not think I properly can.[54]MR BRADLY: My Lord, instinctively I would say you probably cannot, and these things are rather administratively led, as it were, and take their place in the list. My Lord, we have dates.

MR JUSTICE LANGSTAFF: You do.

[56]MR BRADLY: We have five days in May from 4th May. So we know that period. The only difficulty will be if no conclusion is reached and the case can go part-heard and then we may have to wait another six months, because once again we will be sitting in the queue. But, my Lord, I do not think your Lordship can assist in that way, and unfortunately I do not think I can attempt to encourage your Lordship to do so.[57]MR JUSTICE LANGSTAFF: It was going through my mind whether I could, and I do not think I can. But if it is any help to those instructing you they can relay my view if my view is of any force at all.[58]MR BRADLY: I am sure that would be most helpful.[59]MR JUSTICE LANGSTAFF: Plainly this is a matter which ought, if the NHS dispute panel concerned can do so, to be resolved as soon as possible.[60]MR BRADLY: I am most grateful.[61]MR JUSTICE LANGSTAFF: In which case I will simply make the first part of the order. Let me just have a look at that order again.[62]MS LINDSAY-STRUGO: My Lord, we would be happy then on the basis if we had an indication from the defendant that there is no prospect of them terminating ---[63]MR JUSTICE LANGSTAFF: If there is it may found another application, but I leave that entirely to others. Paragraphs 1 and 3 you are asking for, are you?[64]MS LINDSAY-STRUGO: Paragraphs 1 and 3 -- costs -- my Lord.[65]MR BRADLY: My Lord, may I say something about 3?

MR JUSTICE LANGSTAFF: Yes, certainly.

[67]MR BRADLY: My Lord, I of course hear what your Lordship has said about the decision. Can I perhaps just remind your Lordship that until skeleton arguments -- clause 565 was, so far as the claimant is concerned, to be subject to judicial review, and that having disappeared at the skeleton argument stage we then had perversity introduced into the claimant's case, and on both of those aspects of this case the defendant has been successful. My Lord, I appreciate entirely 591 has been the crucial issue, but 565 was in the detailed grounds and perversity remained until your Lordship's judgment today. So my Lord, those are the aspects that I would ask your Lordship to consider. And perhaps your Lordship might also consider this is the first time there has been guidance on this issue and it is a difficult one for all operating these contracts. In those circumstances, my Lord, that might enter your Lordship's consideration of this issue.[68]My Lord, my question to your Lordship is that there be, given the way the case was pleaded and has now been run, given the degree of success on the pleaded case and that last argument about this public body attempting to run these contracts, which is (inaudible), the right order be no order for costs.[69]MR JUSTICE LANGSTAFF: I think the right order is to make a costs order. What currently is concerning me is, looking at the bundles, virtually all of which I think were to deal with the factual circumstances and therefore really related to the 565 argument and the perversity argument -- and I think that that has occupied a part, at any rate, of the determination of the court. Plainly you have won, you are entitled to costs on the basis that you have won. My only concern is whether I should moderate those costs at all to represent those factors, and you might want to argue about that.[70]MS LINDSAY-STRUGO: My Lord, if I could just take instructions for a moment, having not been involved.

MR JUSTICE LANGSTAFF: Yes, of course.

[72]MS LINDSAY-STRUGO: (Pause) My Lord, I understand that the 591 argument was always fundamental to this case even before proceedings were issued, and then that was a matter that was endorsed between the parties. If you are minded to make any reduction from our schedule of costs we would ask for that to be a very modest reduction. It was a necessary background to the issues which were ventilated.[73]MR JUSTICE LANGSTAFF: I think the costs will have to be assessed, will they not? I think it is sufficient if I indicate that, in so far as the costs of this hearing has been increased solely by reference to the 565 argument, there is to be no order as to costs; so effectively inviting the costs judge to disallow such costs as he thinks may be responsible for that.[74]I would be inclined either to do that or to reduce the costs overall, which may make it cheaper because the costs assessment otherwise could be lengthy and difficult. I will say 10 per cent.[75]MS LINDSAY-STRUGO: We are with the 10 per cent reduction.[76]MR JUSTICE LANGSTAFF: It does make the overall costs easier. So the claimant to be paid 90 per cent of the costs by the defendant.[77]MS LINDSAY-STRUGO: My Lord, may I just say this? I am not inviting your Lordship to respond to it, but your Lordship's judgment I have assumed envisages the present situation staying entirely as it is, and so the defendant PCT will carry on protecting patient safety in the way it presently is, and the contracts will remain that way until such time as the dispute resolution procedure has ---[78]MR JUSTICE LANGSTAFF: I should make it clear, and it may be that the Press are not here presently, but let me say two or three things. First of all, I am quite satisfied that the PCT -- though I have found they made an error so far as 591 is concerned -- have acted with proper regard to their responsibilities for the public in the Harringey area. There can be no suggestion to the contrary. Secondly, that I was told no one contradicted that the present position which adequately protects patient safety is to continue until the resolution. It is not envisaged, and it is central to my decision on this 591 notice that the doctors concerned had absented themselves from continuing with the contract. Thirdly, were they to return, it would seem to me an entirely different argument that there may be another 591 notice in respect of patient safety. The reason why there was not in this case was that the doctors were not concerned with the running of the practice. Fourthly, because I should have mentioned this in the judgment, I would like to congratulate both counsel for the quality of the arguments given to me and my omission, I am afraid, from the judgment, but you should know that is my view.[79]MR BRADLY: I am most grateful. Thank you very much.