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You are here: BAILII >> Databases >> England and Wales High Court (King's Bench Division) Decisions >> Khera (t/a The Family Dental Practice) v National Health Service Commissioning Board [2025] EWHC 967 (KB) (17 April 2025) URL: https://www.bailii.org/ew/cases/EWHC/KB/2025/967.html Cite as: [2025] EWHC 967 (KB) |
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KING'S BENCH DIVISION
Strand, London, WC2A 2LL |
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B e f o r e :
____________________
| Dr Angelica Khera (t/a The Family Dental Practice) |
Appellant |
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| - and - |
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| National Health Service Commissioning Board (also known as NHS England) |
Respondent |
____________________
Jennifer Thelen (instructed by Hill Dickinson LLP) for the Respondent
Hearing date: 12 February 2024
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Crown Copyright ©
Mrs Justice Ellenbogen DBE:
Introduction
a. the contract the subject of dispute was an NHS contract, into which both parties had entered as health service bodies, the Appellant having elected to provide dental services in that capacity;
b. pursuant to:
i. section 9(5) of the National Health Service Act 2006 ('the 2006 Act'), that contract 'must not be regarded for any purpose as giving rise to contractual rights and liabilities'; and
ii. section 9(6) of the 2006 Act, where any dispute arose under the contract, either party could refer the matter to the Secretary of State for Health for determination, a function which the Secretary of State had delegated to the NHS Resolution and Primary Care Appeals Service ('PCAS');
c. the Respondent having referred the dispute to PCAS (following issue, but prior to service, of proceedings and unaware that they had been issued), the Appellant was bound, both contractually and statutorily, to accept its chosen dispute resolution forum; and
d. in serving proceedings on the Respondent, the Appellant was, contrary to contract and primary and secondary legislation, seeking to prevent PCAS from exercising its statutory function of determining a dispute arising in connection with an NHS contract which had been referred to it by one of the parties.
The contract
'The Contractor has elected to be regarded as a health service body for the purposes of section 4 of the 1990 Act. Accordingly, this contract is an NHS contract.'
a. 'NHS Contract' has the meaning assigned to it in section 4(1) of the National Health Service and Community Care Act 1990 (a section later repealed by the 2006 Act). By clause 2.8 of the GDS Contract:
'Reference to any statute or statutory provision includes a reference to that statute or statutory provision as from time to time amended, extended, re-enacted or consolidated (whether before or after the date of this Contract), and all statutory instruments and orders made pursuant to it.'
The 2006 Act is a consolidating statute;
b. 'Contract' means this Contract between the PCT and the Contractor named in Schedule 1;
c. 'health service body' has, unless the context otherwise requires, the meaning given to it in section 4(2) of the 1990 Act;
d. 'NHS dispute resolution procedure' means the procedure for disputes specified in Part 21;
e. 'the Regulations' means the National Health Service (General Dental Services Contracts) Regulations 2005 (S.I. 2005/3361); and
f. 'the Secretary of State' means the Secretary of State for Health.
'DISPUTE RESOLUTION
Local resolution of contract disputes
279. In the case of any dispute arising out of or in connection with the Contract, the Contractor and the PCT must make every reasonable effort to communicate and cooperate with each other with a view to resolving the dispute, before referring the dispute for determination in accordance with the NHS dispute resolution procedure (or, where applicable, before commencing court proceedings).
Dispute resolution: non-NHS Contracts
280. Any dispute arising out of or in connection with the Contract, except matters dealt with under the complaints procedure set out in Part 20 of this Contract, may be referred for consideration and determination to the Secretary of State, if:
280.1 the PCT so wishes and the Contractor has agreed in writing; or
280.2 the Contractor so wishes (even if the PCT does not agree).
281. In the case of a dispute referred to the Secretary of State under clause 280, the procedure to be followed is the NHS dispute resolution procedure, and the parties agree to be bound by a determination made by the adjudicator.
NHS dispute resolution procedure
282. The NHS dispute resolution procedure applies in the case of any dispute arising out of or in connection with the Contract which is referred to the Secretary of State in accordance with section 4(3) of the 1990 Act[1], and the PCT and the Contractor shall participate in the NHS dispute resolution procedure as set out in paragraphs 55 and 56 of Schedule 3 to the Regulations.
283. Any party wishing to refer a dispute shall send to the Secretary of State a written request for dispute resolution which shall include or be accompanied by –
283.1 the names and addresses of the parties to the dispute;
283.2 a copy of the Contract; and
283.3 a brief statement describing the nature and circumstances of the dispute.
284. Any party wishing to refer a dispute as mentioned in clause 283 must send the request under clause 283 within a period of three years beginning with the date on which the matter giving rise to the dispute happened or should reasonably have come to the attention of the party wishing to refer the dispute.
285. In clauses 279 to 284 "any dispute arising out of or in connection with the Contract" includes any dispute arising out of or in connection with the termination of the Contract.
286. This Part shall survive the expiry or termination of the Contract.'
'Subject to clause 200, no amendment or variation shall have effect unless it is in writing and signed by or on behalf of the PCT and the Contractor.'
Clause 200 is of no application in these proceedings.
a. under the heading, 'Entire Agreement':
i. clause 366 provided:
'Subject to clause 200 and any variations made in accordance with Part 22, this Contract constitutes the entire agreement between the parties with respect to its subject matter.';
ii. clause 367 provided:
'The Contract supersedes any prior agreements, negotiations, promises, conditions or representations, whether written or oral, and the parties confirm that they did not enter into the Contract on the basis of any representations that are not expressly incorporated into the Contract. However, nothing in this Contract purports to exclude liability on the part of either party for fraudulent misrepresentation.';
b. under the heading 'Governing Law and Jurisdiction', clauses 368 and 369 provided, respectively, that the GDS Contract shall be governed by and construed in accordance with English law; and that, without prejudice to the dispute resolution procedures contained in the contract, in relation to any legal action or proceedings to enforce the contract, or arising out of or in connection with it, each party agreed to submit to the exclusive jurisdiction of the courts of England and Wales; and
c. under the heading 'Waiver, Delay Or Failure To Exercise Rights', clause 371 provided:
'The failure or delay by either party to enforce any one or more of the terms or conditions of this Contract shall not operate as a waiver of them, or of the right at any time subsequently to enforce all terms and conditions of this Contract.'
Related legislation
'9.—(1) Where a proposed contractor elects in a written notice served on NHS England[2] at any time prior to the contract being entered into to be regarded as a health service body for the purposes of section 4 of the 1990 Act, it shall be so regarded from the date on which the contract is entered into.
(2) If, in accordance with paragraph (1) or (5), a contractor is to be regarded as a health service body, that fact shall not affect the nature of, or any rights or liabilities arising under, any other contract with a health service body entered into by that contractor before the date on which the contractor is to be so regarded.
(3) Where a contract is made with an individual dental practitioner or two or more persons practising in partnership, and that individual or that partnership is to be regarded as a health service body in accordance with paragraph (1) or (5), the contractor shall, subject to paragraph (4), continue to be regarded as a health service body for the purposes of section 4 of the 1990 Act for as long as that contract continues and irrespective of any change in—
(a) the partners comprising the partnership;
(b) the status of the contractor from that of an individual dental practitioner to that of a partnership; or
(c) the status of the contractor from that of a partnership to that of an individual dental practitioner.
(4) A contractor may at any time request a variation of the contract to include or remove provision from the contract that the contract is an NHS contract, and if it does so—
(a) NHS England shall agree to the variation; and
(b) the procedure in paragraph 60(1) of Schedule 3 shall apply (variation of a contract: general).
(5) Where, pursuant to paragraph (4), NHS England agrees to a variation of the contract, the contractor shall—
(a) be regarded; or
(b) subject to paragraph (7), cease to be regarded,
as a health service body for the purposes of section 4 of the 1990 Act from the date that variation takes effect pursuant to paragraph 60(1) of Schedule 3.
(6) Subject to paragraph (7), a contractor shall cease to be regarded as a health service body for the purposes of section 4 of the 1990 Act if the contract is terminated.
(7) Where a contractor ceases to be a health service body pursuant to—
(a) paragraph (5) or (6), it shall continue to be regarded as a health service body for the purposes of being a party to any other NHS contract entered into after it became a health service body but before the date on which the contractor ceased to be a health service body (for which purposes it ceases to be such a body on the termination of that NHS contract);
(b) paragraph (5), where it or NHS England —
(i) has referred any matter to the NHS dispute resolution procedure before it ceases to be a health service body, or
(ii) refers any matter to the NHS dispute resolution procedure, in accordance with paragraph 54(1)(a) of Schedule 3, after it ceases to be a health service body,
the contractor is to continue to be treated as a health service body (and accordingly the contract is to continue to be regarded as an NHS contract) for the purposes of the consideration and determination of the dispute; or
(c) paragraph (6), it shall continue to be regarded as a health service body for the purposes of the NHS dispute resolution procedure where that procedure has been commenced—
(i) before the termination of the contract; or
(ii) after the termination of the contract, whether in connection with or arising out of the termination of the contract or otherwise,
for which purposes it ceases to be such a body on the conclusion of that procedure.'
'60.—(1) Subject to paragraph 31(3), no amendment or variation shall have effect unless it is in writing and signed by or on behalf of NHS England and the contractor.'
(Paragraph 31(3) of Schedule 3 is of no relevance to these proceedings.)
Prior litigation between the parties
'12. In 2007 Croydon PCT established a pilot scheme designed to transfer IMOS from hospital to primary care, in order to reduce waiting lists and to save cost. The three dentists in this case participated in that scheme. For that purpose, they entered into separate contracts with Croydon PCT. Each contract had a fixed duration of 12 months from 1 December 2007, although the term was extendable by agreement. In relation to this 12-month pilot scheme, there was a triage system to decide which patients referred by general practitioners for an IMOS treatment should be seen at the Hospital and which should be seen by one of the four IMOS services providers. The terms of the service were set out in a contract headed "Contract for the Provision of an Intermediate Minor Oral Surgery (IMOS) Service in a Primary Care Setting" ("the IMOS contract"). Although shorter than the GDS contract, the IMOS contract runs to 62 clauses, one Appendix and four annexes. The IMOS contract includes provision about its scope (clauses 5 and 6); service quality (clauses 10 to 13); compliance with national standards (clauses 14); incident management (clause 16); monitoring and information requirements (clauses 19 to 25); contract volume (clauses 29 to 33) and so on. Clause 17 of the IMOS contract provided:
"This service is for the provision of an IMOS service as identified in the advanced mandatory service specification for IMOS (Appendix 1)."
13. Payment under the IMOS contract was not tied to UDAs[[3]], as it was under the GDS contract. Instead, each dentist was entitled to a fixed sum payment per treatment. Although in the first instance the IMOS contract ran for a fixed term, clauses 51 and 52 provided for earlier termination by one month's notice.
14. As foreshadowed by clause 17, Appendix 1 contains a more detailed description of the services to be provided as the IMOS service. It includes provisions for triage, three possible care pathways, eligibility for the IMOS service, and provisions dealing with payment. Under the heading "Costs" the Appendix states that the PCT will negotiate with the providers a "fee per patient" and a "sessional rate" for oral surgeons and triage.
15. The fixed term of the IMOS contract expired on 30 November 2008. The dentists continued to supply IMOS to Croydon PCT; and continued to be paid at the rates specified in the IMOS contract. The judge held at [81] that the IMOS contract continued by conduct. There is no challenge to that conclusion. The essential question on this appeal is whether that state of affairs continues, or whether the provision of IMOS had been incorporated into the GDS contract. NHS England says that the state of affairs continues, with the result that it is entitled to terminate the ongoing contract by notice under clauses 51 and 52 of the IMOS contract. The dentists, on the other hand, say that the provision of IMOS has been incorporated into the GDS contract, with the consequence that NHS England has no right to terminate the IMOS service without default by the dentist.'
'[30] As far as the third strand in the judge's reasoning is concerned, the starting point, as it seems to me, is that the contract is a contract made entirely in writing. It could not be otherwise, in view of both the entire agreement clause and the written variation clause. Although the conduct of the parties subsequent to an agreement may be relied on to identify the terms of a contract where the contract is wholly or partly oral, there is a long-standing principle of contractual interpretation that in the case of a written contract post-contract conduct is irrelevant (and therefore inadmissible). I do not, therefore, consider that the judge's reliance on the parties' post variation conduct was a sound basis for his decision.
…
[38] The question is, then, what variation has been made in accordance with Pt 22 of the GDS contract?
[39] Clause 287 requires a variation to be (a) in writing and (b) signed by the parties. The VAF itself satisfies both those requirements. But once a variation has been made, I consider that the GDS contract, as varied, is governed by cl 366. For the purposes of that clause it seems to me that the contract terms consist of (and consist only of) what is contained in the GDS contract itself, and what is contained in the VAF. It is true, as Ms Demetriou submitted, that many entire agreement clauses are wholly backward-looking; and do not have any impact on how the parties may alter the terms of their bargain once the contract has been made. But in the present case cl 367 performs that function. In my judgment the combination of cll 366 and 287, taken together, evince a clear purpose of ensuring that all the terms of the bargain are to be found in the combination of the original GDS contract and any written variation compliant with cl 287. I do not doubt that the words contained in the VAF could have incorporated by reference some, or all, of the terms of the IMOS contract. But they did not do so, at least expressly. Moreover, if the VAF had incorporated all the terms of the IMOS contract that would not have suited the dentists' purposes; because the termination provisions in that contract would also have been incorporated. I am unable to discern, from the words in the VAF, on their own, which (if any) of the 62 clauses have been incorporated into the GDS contract. I agree, therefore, with Mr Williams QC for NHS England, that it is not possible to interpret the words in the VAF, standing alone, as incorporating the particular selection of terms in the IMOS contract that the judge held to have been incorporated (if, indeed, that is what he did decide). In her skeleton argument Ms Demetriou argued that terms could be incorporated by a previous course of dealing or a common understanding. In support of that proposition she relied on the judgment of Lord Denning MR in British Crane Hire Corp Ltd v Ipswich Plant Hire Ltd [1974] 1 All ER 1059, [1975] QB 303. Absent an entire agreement clause, I would agree that terms can be incorporated by a previous course of conduct. I am more doubtful about a 'common understanding' as a distinct concept. She did not pursue this argument orally. But assuming that terms can be incorporated in that way, there is still the problem of deciding which terms of the IMOS contract were thus incorporated. One purpose of the entire agreement clause, coupled with the restrictions on variation, was surely to preclude arguments of that kind. In my judgment the judge paid insufficient attention to the purpose underlying both the entire agreement clause and the written variation clause.'
Master Stevens' decision in these proceedings
a. (at [30] and [31]) the 2017 Proceedings had not considered or determined whether the GDS Contracts there under consideration had been NHS or non-NHS contracts, or whether, if the former, the matter ought to have been before the Court. There had been no recorded submissions on behalf of any provider relating to clause 14, nor did it appear that Murray J had been taken to Pitalia v The National Health Service Commissioning Board [2014] EWCA Civ 474, in which the Court of Appeal had emphasised that an NHS contract must not be regarded as giving rise to enforceable contractual rights 'for any purpose'. Thus, the Master held that she could not conclude that he had made any findings on the point;
b. (at [30]; [33] to [35]) the lack of any jurisdictional challenge by the Board in the 2017 Proceedings was not determinative of the issues before her in the way for which the Respondent had contended. The central foundation of the Board's case had been that the IMOS Contract effectively stood alone and that the GDS Contract was not material to the dispute. That starting point would have been undermined by the taking of a jurisdictional point arising under the latter. The battleground had been the different termination clauses in the IMOS and GDS Contracts, and the NHS versus non-NHS contractual position had not once been mentioned in Murray J's judgment, or in that of the Court of Appeal. Furthermore, CPR 11(4) required that any challenge be raised within 14 days of filing an acknowledgement of service, such that, irrespective of any material which might have come to light subsequently, the Court had by then been seised of jurisdiction. The Court of Appeal had disagreed with Murray J's conclusions as to the means by which the GDS Contract could be varied and its conclusions on that issue prevailed;
c. (at [36] to [38]) in the 2017 Proceedings, when addressing the question of variation, Lewison LJ had held [30] that, 'in the case of a written contract post-contract conduct is irrelevant', going on to hold [39] that clauses 366 and 287 of the GDS Contract, taken together, evinced a clear purpose of ensuring that all terms of the bargain were to be found in the combination of the original GDS Contract and any variation which was compliant with clause 287. His judgment had relied wholly upon basic principles of contract law and had not sought to rely upon any statutory or regulatory regime to bolster its conclusions;
d. (at [39]) it had been the [Appellant's] case that the [Respondent's] participation in prior proceedings had demonstrated its election to treat the GDS Contract as a non-NHS contract, such that, thereafter, the parties were free to litigate all disputes thereunder in the courts; and, furthermore, that the issue was res judicata. As to that, 'As I have decided that the defendant was not waiving any rights by submitting to jurisdiction in Vasant as their focus was on the separate IMOS Contract, and nor did the trial judge even consider jurisdictional issues or the public law/private law nature of the underlying contract or make any finding that the GDS Contract was a non-NHS one, that aspect not being considered at all, it follows that, absent a subsequent agreed contract variation in accordance with clause 287, the governing GDS contract remains and should be treated as an NHS one…' The Master went on to set out her rationale for that conclusion as being that:
(i) clause 14 of the GDS Contract clearly stated that to be the case;
(ii) the [Appellant], sensibly, had not pursued earlier assertions to the effect that she had never elected to be regarded as a provider under an NHS contract, as both parties had understood, which assertions were not consistent with the contractual requirements for a variation on which she had successfully relied in the 2017 Proceedings. In any event, the Master considered herself bound by Lewison LJ's conclusions that subjective intentions and post-contract conduct were irrelevant to the interpretation of a written contract; and
(iii) in oral submissions, counsel for the [Appellant] had accepted that there had been no written variation of the GDS Contract in accordance with its express terms. Instead, he had submitted that the lack of jurisdictional challenge to the GDS Contract in the 2017 Proceedings (i) had amounted to a waiver of its NHS status by the parties; (ii) estopped the defendant from raising a jurisdictional challenge in these proceedings; (iii) meant that the matter was res judicata; and (iv) also meant that it was an abuse of process for the defendant to raise such a challenge in the instant proceedings. The Master stated that, in light of her conclusion that it was impossible to rely upon any conduct to alter the GDS Contract, she was unable to accept those submissions.
'44. Until such time as there is a written variation to the claimant's GDS contract signed by both parties, it remains an NHS one. In the previous High Court proceedings between the parties in 2017 it would have been surprising if the defendant had mounted a jurisdictional challenge, as their whole Defence centred on their dispute being unconnected with the GDS contract. Given that stance I do not consider that their lack of jurisdictional challenge was significant or relevant to current issues. But even if I am wrong on that the Court of Appeal has provided binding authority in two decisions (Vasant and Pitalia) which have guided me to the view that (a) post-contract conduct is irrelevant to effect a variation of this GDS contract and (b) whilst there is no such proper variation and clause 14 continues to state this is an NHS contract the parties have no enforceable rights under that contract before the courts.
45. The binding nature of the Court of Appeal authorities has been uppermost and determinative of this application in my mind, but for the sake of completeness I would repeat my conclusion expressed at paragraph 31 that the judge at first instance when examining the various contracts and terms existing between the parties in a lengthy judgment, never once mentioned its NHS or non-NHS status so it played no part in his decision-making. Whilst the judge ultimately did consider some aspect of the GDS contract alongside the IMOS one, and long after the time by which a jurisdictional challenge needed to be raised under CPR 11, those considerations were unrelated to jurisdiction upon which the judge had received no submissions, so I do not consider the challenge in the present dispute is attempting to re-open decided issues. Further, as stated above, the Court of Appeal authority in Vasant is clear that the conduct of the parties (such as any failure to previously mount a jurisdictional challenge), whatever the subject matter of the earlier proceedings, is incapable of effecting a change to, or waiver of, any terms of this contract which includes terms specifying the appropriate dispute resolution procedures. It has therefore not been necessary for me to consider the detailed submissions made relating to the doctrine of res judicata, cause of action estoppel, issue estoppel nor indeed abuse of process because I have concluded that the status of the governing GDS contract between the parties, as it relates to the presence or absence of contractual rights enforceable through the courts, was not changed by the outcome of, or participation in, the prior litigation between the parties.
46. It might be considered a little surprising that the claimant having fought to rely on a written variation agreement to her GDS contract to succeed in her own prior claim against the defendant in 2017, in this claim sought to persuade that the written variation requirement should now be displaced to rely instead on beliefs and conduct as evidence of waiver. However, I note that Murray J showed some sympathy to the claimant at paragraph 98 of his judgment recognising that dentists are not lawyers. In any event, as I have set out above, by the time of the hearing itself her submissions focused solely on the issues before the court in 2017/18, the lack of jurisdictional challenge and whether the court made decisions about the GDS contract in those earlier proceedings.
47. Ultimately the Court of Appeal has made it plain in Pitalia and another v The National Health Service Commissioning Board [2014] EWCA Civ 474 that an NHS contract must not be regarded as giving rise to enforceable rights before the court "for any purpose". This is an important principle of public policy which the courts have been keen to uphold when disputes expressly concerning that issue have been brought before them. The mechanism to become a non-NHS provider is very straightforward as set out at paragraph 8(vi) above and affirmed by the Court of Appeal in the Vasant case which I examined at paragraph 36–38. Now that the parties have the court's decision it should be possible for the defendant to sign off the variation request sent by the claimant on 8th September 2022 if that is what she still wishes, so that arrangements between them can proceed on a non-NHS basis going forwards, but that will not affect resolution of this historic dispute.
48. Accordingly, I conclude that the court does not have jurisdiction to try this claim and the claim form should accordingly be set aside. The parties can continue to work to resolve their current disagreement over performance issues through the statutory PCA process.'
The appeal
a. (Ground One) The Master had been wrong to conclude that judgment in the 2017 Proceedings had related to a standalone 'IMOS' contract, such that the GDS Contract had not been material to the dispute. It had been clear from the Appellant's pleaded case that she had been seeking declarations under the GDS Contract. The Respondent had filed an acknowledgement of service, notwithstanding which it had not applied for an order declaring that the Court lacked jurisdiction. Accordingly, pursuant to CPR 11, it was to be treated as having accepted the Court's jurisdiction to try the claim and both parties had submitted to the Court's jurisdiction.
b. (Ground Two) The Master had erred in concluding that the 2017 Proceedings had arisen from contractual rights under the IMOS contract — no claim had been issued under the latter and it was clear that the remedies sought by the Claimant, and granted by the judge, had been sought/granted under the GDS Contract.
c. (Ground Three) The Master had been wrong to conclude that the Respondent had not waived any rights under the GDS Contract by submitting to the jurisdiction in the 2017 Proceedings.
d. (Ground Four) The Master's analysis and application of the principles in the Court of Appeal's judgment in Vasant had been wrong.
e. (Ground Five) The Master had been wrong to conclude that the principles in Vasant and in Pitalia were of relevance to the principles of estoppel; res judicata; and/or abuse of process, raised by the Appellant in this claim.
f. (Ground Six) The Master had been wrong to conclude that Pitalia had upheld an important principle of public policy; Pitalia had determined the status of a different agreement and the facts and arguments advanced in these proceedings were different.
g. (Ground Seven) The Master erred in her interpretation of the judgment of Murray J in the 2017 Proceedings.
Discussion and conclusions
'The importance of the question of whether the arrangements between the Pitalias and the CLPCT were or were not an "NHS contract" is that, if they constituted an NHS contract, section 9(5) of the NHSA 2006 provides that an NHS contract "must not be regarded for any purpose as giving rise to contractual rights or liabilities". An NHS contract cannot, therefore, be sued upon in the courts.'
It is apparent from paragraphs [6] and [7] of Vos LJ's judgment that, on their first appeal to the High Court, the claimants had contended that the effect of a particular transitional order and regulations had been to supplant the permissive arrangements for a reference to the Secretary of State in relation to a non-NHS contract. The High Court had held that, even assuming in the appellants' favour that the relevant arrangements had not constituted an NHS contract after a particular date, the dispute resolution procedure in the regulations had survived and the stay had been properly granted. Accordingly, it had not found it necessary to decide 'the difficult point' as to whether the variation agreement had been an NHS contract. In the Court of Appeal, argument was limited to whether the variation agreement had been an NHS contract (albeit not expressly stated to be such), and, if so, whether NHS England should be granted permission to amend its application to one seeking to strike out the proceedings.
'8. Before us, the argument took a rather different turn. We said at the outset that it seemed to us that the case turned on whether or not the PMS variation agreement was or was not an NHS contract, and we asked for argument to be initially confined to that point. As appears in this judgment, I have concluded that DJ Relph was right to find that the PMS variation agreement was an NHS contract. At the end of the argument on this point, we said we would reserve judgment, but invited the parties to address submissions to the question of what relief would be appropriate if the PMS variation agreement were held to be an NHS contract. Mr David Lock QC, counsel for the CLPCT, accepted that, if that were the case, his application for a stay was (and had always been) inapt, and that the CLPCT ought to have been applying for the proceedings to be struck out on the grounds that an NHS contract cannot give rise to contractual rights or liabilities under section 9(5) of the NHSA 2006, so that the Pitalias can have no cause of action. A debate then developed as to whether the Pitalias would be prejudiced by the CLPCT now being permitted to amend to seek a strike out instead of a stay. Pursuant to the court's direction, on the day following the hearing, the CLPCT filed a draft amended application seeking to strike out the proceedings on the grounds I have described. I will return to the question of prejudice in due course.
9. For the reasons, therefore, that I have sought shortly to explain, this judgment is limited to the questions of (1) whether the PMS variation agreement was an NHS Contract, and (2) if so, whether the CLPCT should be granted permission to amend its application to seek to strike out the proceedings. Since I understand that the court is agreed as to these points, it will not be necessary to deal with the remaining points that Stuart-Smith J considered.'
'For these reasons, it seems to me that DJ Relph was right to hold that the PMS pilot agreement as varied by the PMS variation agreement was an NHS contract. If that is right, the Pitalias had no legally enforceable contractual rights against [NHS England] when they issued these proceedings in March 2010 because of the provisions of section 9(5) of the NHSA 2006. In the circumstances, the Pitalias cannot, in my judgment, have any right to relief against [NHS England] and the claim ought to be struck out.'
'40. It seems to me that the Pitalias cannot be prejudiced by the amendment sought for one simple reason. They never had any legally enforceable rights under the PMS variation agreement, either when they issued these proceedings or thereafter. …
41. Just before a draft of this judgment was due to be handed down to counsel in the usual way, Mr Butler put in a lengthy written submission raising additional grounds for opposing the amendment to the application notice relying on CPR Part 11 (disputing the court's jurisdiction) and Part 3.9 (relief from sanctions). Neither provision is relevant. The application to strike out is not a jurisdictional challenge; it is on the basis that an NHS contract cannot give rise to contractual rights or liabilities under section 9(5) of the NHSA 2006, so that the Pitalias can have no cause of action. Nor is [NHS England] applying for relief from sanctions. It is applying late under CPR Part 3.4 to strike out the claim. It seeks permission to amend its previous application for a stay under the court's general management powers in CPR Part 3.1(2)(m). Mr Butler suggested also that permission to amend should be refused because the Pitalias are no longer a health service body, so that there may be some conflict between an adjudicator determining matters before 1st December 2012, and the court determining matters afterwards. I do not think that can be any reason not to permit [NHS England] to amend its application so as to apply to strike out proceedings that relate to a period in respect of which there can be no cause of action.
42. For the reasons I have given, it seems to me that it is appropriate to allow [NHS England] to amend its application notice in the way that it seeks to do to apply for a strike out of these proceedings.'
'46. I also agree with Vos LJ's conclusion that the PMS pilot agreement as varied by the PMS variation agreement was an "NHS contract", for the reasons that he gives. It must follow that the effect of section 9(5) of the NHSA 2006 (and its predecessor provision) is that the Pitalias had no legally enforceable contractual rights against… [NHS England] when they issued the current proceedings. The logical consequence of that conclusion is that these proceedings ought to be struck out under CPR Pt 3.4(2), either on the ground that they disclose no reasonable ground for bringing the claim or on the ground that they are an abuse of the court's process. Mr Lock's proposed amendment to [NHS England's] original application (which, although mentioning CPR Pt 3, effectively only sought a stay on the grounds that there was a matter which the parties had agreed to refer to arbitration within the meaning of section 9 of the AA 1996), seeks to strike out the Pitalias' claim on the ground that it discloses no cause of action against …[NHS England].
47. I agree with Vos LJ's conclusion that the respondent should be permitted to make this
amendment to its original application, even at this very late stage of these proceedings and even though it was only as a result of pressing by the court that Mr Lock made his application at all. The Pitalias have not been prejudiced by this late application, for the reasons that Vos LJ has given.
…
49. I need only say that I am very far convinced that these dispute resolution provisions give rise to an "arbitration agreement" for the purposes of the AA 1996. Moreover, even if that point were otherwise arguable, it is clear that the PMS variation contract, being an NHS contract, "must not be regarded for any purpose as giving rise to contractual rights or liabilities" pursuant to section 9(5) of the NHSA 2006. So it seems to me that the PMS pilot agreement, which became the PMS variation agreement could not give rise to any "arbitration" rights, even if "arbitration" provisions are normally to be treated as severable from the remainder of a "contract", in accordance with section 7 of the AA 1996. The effect of section 9(5) of the NHSA 2006 is absolutely clear, by its use of the words "must not be regarded for any purpose…", so that there could not be any enforceable rights to arbitration, which rests on the parties' agreement.'
'1. These applications concern disputes between the NHS Commissioning Board (the Claimant) and the Defendants, who are providers of dental services. The Defendants have provided dental services under arrangements made between them and primary care trusts ("PCTs"). The Claimant is the statutory successor to those PCTs. At the time when those arrangements were made, the Defendants were regarded as health service bodies. That meant that the arrangements between them and the PCTs were "NHS contracts" (see section 9(1) of the National Health Service Act 2006 ("the 2006 Act")).
2. The legislative policy about NHS contracts has three features. First, NHS contracts must not be regarded for any purpose as giving rise to contractual rights and liabilities. Second, disputes about them are not litigated in the ordinary courts. This follows inescapably from the first feature. Third, such disputes are decided by the Secretary of State under the NHS disputes resolution procedure ("the disputes procedure"). This policy is expressed in section 9 of the 2006 Act.
3. The legislative scheme enables a provider such as the Defendants to choose whether or not to be regarded as a health service body. The Defendants were initially so regarded, but have both now chosen not to be. That choice dictates whether or not the arrangements between provider and PCT are NHS contracts. …
4. If a provider ceases to be regarded as a health service body, the disputes procedure (transitional provisions apart) only continues to apply (to what is now an ordinary contract) at the option of the provider. The Defendants have not opted for that procedure to apply here.'
At [21]ff, Elisabeth Laing J turned to consider the legislative scheme and its effect, holding:
(1) Section 9 of the National Health Service Act 2006
21. Section 9(1) of the 2006 Act provides that an NHS contract is an arrangement under which one health service body arranges for the provision to it by another health
service body of goods and services. By section 9(5), an NHS contract "must not be regarded for any purpose as giving rise to contractual rights and liabilities". By section 9(6), "If any dispute arises with respect to such an arrangement, either party may refer the matter to the Secretary of State for determination under this section". The Secretary of State may determine that dispute himself, or appoint a person to consider and determine it in accordance with regulations (section 9(8)). A determination of a reference under section 9(6) may include such directions (including directions as to payment) as are considered appropriate to resolve the matter in dispute.
22. It is clear beyond argument that section 9 gives effect to the policy which I have described in paragraph 2, above. It is not possible to give section 9(5) any meaning other than the meaning conveyed by its clear words. An NHS contract "must not be regarded for any purpose as giving rise to contractual rights and liabilities". If this has
undesirable consequences for the Claimant in cases such as these, then the remedy is
for Parliament to amend section 9. It is true that legislative policy has the three features I have described in paragraph 2, above. But this first feature is crucial, and the two further features are its consequences in this scheme. Ms Morris QC, in her able submissions, tended to focus on the third feature of the scheme, but to ignore the first.
23. It is an inevitable consequence of section 9(5) that the Claimant cannot sue the Defendants for breaches of the arrangements between them and the relevant PCTs which are alleged to have been committed before the notices of variation were signed
in each case. It is true that the NHS contracts between the PCTs and the Defendants, and the contracts by which they have been superseded, are on identical terms. But they are not the same "contract". The first, NHS "contract", was a contract only in name, because of the terms of section 9(5). The creation of an ordinary contract on the same terms on the date the variation notices were signed cannot change history by
creating contractual rights and liabilities (and flowing from those, causes of action) which did not exist, and could not have existed, before that date. Section 9(5) affects
both parties equally in that respect.
24. This conclusion is supported by the reasoning of the Court of Appeal in Pitalia v
National Health Service Commissioning Board [2014] EWCA Civ 474. This was a dispute about an NHS contract. The parties to it were the claimants and a PCT. The contract ceased to be an NHS contract on 1 December 2012. The claimants brought proceedings against the PCT in the Accrington County Court. Vos LJ, giving the leading judgment, referred to section 9(5) and said, at paragraph 5, that "An NHS contract cannot, therefore, be sued upon in the courts". At paragraph 37, he said that the claimants had "no legally enforceable contractual rights ... when they issued these
proceedings". He made the same point in paragraph 40, and went on to say, "... As for
the [claimants'] pre-1st December 2012 rights, they could never have been vindicated in these legal proceedings, and the fact that they may have a problem now doing so (as to which we say nothing as the matter has not been fully argued) is nothing to the
point in these proceedings." Paragraph 46 of the judgment of Aikens LJ is to similar
effect.
25. The Claimant's skeleton argument sought to distinguish this reasoning. It seems to me that in key material respects, the Pitalia case is on all fours with this one, and that I should follow the approach of the Court of Appeal. It is true that the Court of Appeal did not deal with the point which arises in this case. But I cannot see how, consistently with the express reasoning of the Court of Appeal, it is possible to conclude that the fact that an NHS contract has been superseded by an ordinary contract can bring into existence contractual rights and liabilities as respects the past which could not have existed before the "contract" was varied.'
At [45] she said:
'45. …I consider, for the reasons I have already given, that the PCTs (now the Claimant) are/is prevented by the clear words of section 9(5) from suing for breach of contract in relation to alleged breaches of an NHS "contract" which occurred when it was an NHS "contract", even if, by the time the proceedings were issued, the arrangement in question had become an ordinary contract. The court cannot plug a suggested gap in secondary legislation by ignoring the clear effect of primary legislation.'
Conclusion and disposal
a. the GDS Contract had been an NHS contract prior to the 2017 Proceedings and had remained so thereafter;
b. the Respondent's stance in the 2017 Proceedings had not operated to vary the GDS Contract such that it had become a non-NHS contract, nor did it debar the Respondent from relying upon section 9(5) of the 2006 Act in these proceedings;
c. in the 2017 Proceedings, neither Court had considered the status of the GDS Contract and the effect of section 9(5) of the 2006 Act;
d. she was bound by Pitalia to conclude that an NHS contract must not be regarded as giving rise to enforceable contractual rights 'for any purpose'; and
e. it was appropriate to 'set aside' (synonymous with striking out) the claim form, and to have made an order to that effect.
Note 1 The equivalent provision is now to be found in sections 9(5) and 9(6) of the 2006 Act. [Back] Note 2 Prior to November 2023, the body identified here, and in the regulations which follow, was ‘The Primary Care Trust’. [Back] Note 3 [Units of Dental Activity]
[Back] Note 4 Set out at paragraph 11, above. [Back] Note 5 In oral submissions, Mr Butler disavowed reliance upon cause of action estoppel, previously advanced in his written submissions. [Back]