Mr Justice Turner :
Introduction
- The claimant is a dentist. For many years he has practised from premises in Little Hulton in the Salford area of Greater Manchester. He has no private patients and, therefore, depends for his professional income on the NHS.
- Since 1 April 2006, the claimant has worked under contract with Salford Primary Care Trust (the "PCT") until its abolition with effect from 31 March 2013 following which all relevant benefits and burdens passed to the NHS Commissioning Board. For the sake of convenience, I will use the term "defendant" as an interchangeable reference to whichever of these two bodies was in existence at the time material to the context in which I am using it.
- In essence, the contract defines the terms under which the claimant is required to provide dental services and the basis upon which the defendant is to remunerate him. It is a substantial document containing nearly 400 clauses.
- The defendant has purported to terminate this contract. The claimant alleges that it was not entitled to do so. This is the central issue between the parties.
The background
- The events leading up to this dispute date back to 17 October 2008 when Paul Taylor, a Dental Reference Officer ("DRO"), wrote to Rob Haley of the defendant identifying "a lead regarding concerns" about Mr Krebs. Mr Haley had, in fact, left the defendant organisation and so the response came from Lindsey Bowes, Primary Care Commissioning Manager.
- By way of follow up to the lead referred to in the email, Mr Taylor made an assessment of ten record cards relating to patients of the claimant and reported back to Ms Bowes by letter dated 5 November 2008. He raised concerns in three main areas:
i) Poor diagnosis, treatment and treatment planning;
ii) Poor record keeping;
iii) Potentially fraudulent claims for remuneration.
There is a postscript to the DRO's report which reveals that a clinical tutor at Lance Burn Medical College in Salford had expressed concern about two of the claimant's former patients who were now being managed by two of her students. She referred to the quality of the claimant's care as "an embarrassment to dentistry".
- In two letters dated 27 April 2009, Mr Taylor reported back to Ms Bowes on the results of his examinations of two of the claimant's patients. He was critical of the claimant's professional abilities and identified shortfalls in the quality of the dental care he was providing and of his record keeping.
- At this stage, Patrick Corless, one of the defendant's dental advisors, sought advice from the National Clinical Assessment Service ("NCAS"), a body whose role included providing help to PCTs with the management of practitioners with apparent performance problems.
- As the investigation into his practice proceeded, the claimant began to find the process to be stressful and intrusive. He thought that he was being treated in an unfair and disproportionate way.
- By letter dated 7 May 2009, Alan Berry, the defendant's Associate Director of Professional Support, wrote to the claimant to arrange a meeting, with Mr Corless in attendance, to share their concerns. The claimant agreed to come to the meeting by letter dated 13 May 2009. The tone of his letter was one of dissatisfaction with the way in which the defendant was dealing with the process. He described it as being "far from reasonable". In cross examination at the hearing of this matter the claimant accepted, at least in hindsight, that this observation was not justified.
- After the meeting, Mr Berry wrote to the claimant on 2 June 2009 identifying two particular areas of concern: (i) admin/claims/treatment planning and (ii) performance. Enclosed by way of a schedule was a summary in tabular form providing the relevant particulars. The claimant was invited to comment on the issues raised. The letter was drafted in measured terms. Again, the claimant agreed in cross examination that the table was fair and balanced.
- About four weeks later, the claimant responded with comments on some parts of Mr Berry's letter and schedule but he failed to deal with all the concerns which had been raised. As a result, Mr Berry wrote to the claimant on 25 August 2009 pointing out that a number of the defendant's observations had not been commented on and that the claimant's response did not clearly address the identified issues. The letter enclosed comments on six patients in respect to which a reply was requested by 25 September 2009. In cross examination, the claimant accepted that this was a reasonable position for the defendant to have adopted. Thereafter, matters were to take a more formal turn.
The Deanery
- The Deanery is a regional organisation within the structure of the NHS the role of which relates to training. One of its functions is to advise on the planning and provision of training programmes in accordance with local performance procedures. In the light of a discussion which took place on 22 September 2009, Mr Berry wrote to the claimant saying that there was a possibility that the defendant would refer him to the Deanery so that it could support him in his continuing professional development.
- By email dated 3 November 2009, Dental Dean, Dr Martin Kelly, told Mr Berry that he considered that, after reviewing the reported deficiencies in the claimant's practice, he would be happy to participate in a meeting with the claimant and the defendant. On 17 November 2009, Mr Berry wrote to the claimant saying that the Deanery had asked Mike Wanless, Educational Programme Director, to work with him to support his commitment to remediation and continuing professional development. Mr Wanless duly met the claimant on 9 December 2009. The meeting was relatively productive and it was recorded that Mr Wanless would remain in contact with the claimant at two monthly intervals thereafter to supervise his progress.
The National Clinical Assessment Service
- The claimant accepted in cross examination that, even at this stage in the process, the defendant would have been entitled to seek an NCAS assessment of the claimant had it chosen so to do. Instead, it had been content with a lower level of intervention involving Mr Wanless on behalf of the Deanery.
- NCAS's functions include that of carrying out performance assessments of individual practitioners. It has published a "Good Practice Guide" entitled "Handling Performance Concerns in Primary Care". This document sets out the circumstances in which such an assessment is likely to be appropriate. They are laid out in bullet point form in what is described as "Box 3":
"An NCAS assessment is likely to be appropriate where:
- concern(s) are documented and the PCO is confident that the expressed concerns are accurate statements;
- concern(s) are significant – the actions about which concerns are expressed do not meet what a practitioner would be reasonably expected to do in similar circumstances;
- concern(s) are repetitious – ongoing problems, and/or problems on at least two separate occasions;
- concern(s) do not appear to be sufficiently serious to warrant an immediate referral to the individual's professional regulator;
- the PCO has taken steps to manage the case but has not been successful in clarifying the concerns and/or bringing the case to a resolution; and/or
- an NCAS performance assessment appears to offer a likely way forward in enabling the PCO and practitioner to bring the case to a resolution."
Losing touch
- After a promising start, the defendant began to be concerned that Mr Wanless had not provided it with an update on his progress in working with the claimant. In an email of 4 February 2011 to Mr Kelly, Mr Wanless said: "I have been finding it difficult to contact Dr Krebs. Telephoning him on his surgery line gives the response that he is with a patient, on lunch, not in. Writing receives a written response a couple of weeks later. Ringing his mobile indicates that he is not available." He said, however that he had been able to arrange to meet the claimant in March.
- That meeting took place on 10 March 2011. Mr Wanless provided a report for the defendant which culminated in the following observation: "In summary, I think it is fair to conclude that there was a lack of objective evidence that change had been embraced."
- I make no finding as to whether Mr Wanless' observations were accurate and it is not necessary for me so to do.
Clinical records review
- On 2 August 2011, Mr Berry wrote to the defendant about the findings of Mr Wanless and informing him that Mr Taylor had been succeeded by Nick Johnson, Clinical Advisor, who would be arranging a visit at a suitable time to further analyse the claimant's treatment claims data and notes. In a report dated 3 August 2011, Mr Johnson expressed concerns at data indicating a high percentage of the claimant's patients returning for a further course of treatment within three months of the completion of an earlier course of treatment.
- By this stage, the claimant was very unhappy at the way in which he perceived he was being treated. In a letter to Mr Berry of 15 August 2011, he alleged that he had been victimised. He said that he had taken legal advice and intended to make a claim for damages pursuant to the "Harassment Act 1997" which was obviously intended to be a reference to the Protection from Harassment Act 1997. More ominously from a contractual perspective he said: "I will not release any more patient cards until you have established a reasonable justification."
- In cross examination, the claimant denied that his threats were unjustified but conceded that he now accepted that the defendant was being reasonable and that by refusing to release any more patient cards he was acting in unjustifiable breach of contract. Clauses 211 and 212 of the contract required the claimant to produce to the defendant, or allow the defendant access to, patient records.
- In an email of 23 August 2011, Mr Johnson informed Pat Corless, Dental Practice Adviser, of a conversation he had had with the claimant's wife in which she indicated that if he were to visit the practice it would be a pre-condition that the claimant would pre-select the patients and that they were not in a position to book a record card review until they better understood the defendant's position.
- In a letter of the same date to the claimant, Mr Berry set out the history of the relationship between the defendant and the claimant since 2009 and explained why Mr Johnson wanted to look at the claims data and notes. He suggested that a meeting should take place as a matter of urgency and asked for a response by 6 September 2011.
- No progress was made and, in a telephone conversation of 6 September 2001, Mr Berry urged the claimant to reengage with Mr Johnson failing which it might become necessary to refer the claimant to NCAS for a full assessment.
- In the absence of further material progress, the defendant wrote to the claimant on 14 October 2011 purporting to issue a remedial notice requiring the claimant to grant access to his records for a Records Case Review within 28 days. If the matter were not rectified within 28 days then the consequence would be the issue of a breach of contract notice which could lead to the termination of the contract. This letter appeared to have had the desired effect and Mr Johnson arranged to carry out his review on 10 November 2011.
- On 6 November 2011, four days before the review had been scheduled to take place, the claimant and his wife emailed Mr Johnson wanting to postpone his visit until the complaint of bullying and harassment had been dealt with. In consequence, the review did not take place and on 15 November 2011 the defendant wrote to inform the claimant that a 28 day notice was being issued relating to a committee hearing to consider the termination of his contract. The letter referred to a Statement of Case from Mr Berry of the same date which concluded:
"It is disappointing that the PCT has been required to issue a remedial notice and [I] regret that Mr Krebs has disregarded it. It is difficult to see how the PCT can now gain reassurance of Mr Kreb's clinical competence and consideration of termination of the contract appears to be an inevitable next step."
The letter also referred to a recommendation that the claimant should be referred to NCAS for assessment.
- On 21 November 2011, an investigation report into the claimant's allegation of bullying and harassment found:
"On the basis of the information collected during the investigation I am of the reasonable belief that Mr Krebs as the clinician and his wife Mrs Krebs have been dealt with fairly in this matter of contractual and clinical performance and without any evidence of bullying or harassment."
In cross examination, the claimant agreed with this conclusion.
- A letter dated 23 November 2011 to the defendant from the claimant's solicitors, written in apparent ignorance that the claimant's grievance had been resolved, stated:
"Consequently, he would also welcome a visit by the National Clinical Assessment Service, and would ask that you provide his details to them. He considers that such a visit, which he expects will be conducted in an entirely professional manner, should provide the potential to reopen some constructive dialogue. In the circumstances our client wishes to oppose the proposed cancellation of his NHS contract and welcomes the opportunity of the proposed inspections."
- For a short period thereafter, a spirit of détente prevailed. The decision on the proposed termination of the claimant's contract was postponed pending the outcome of a visit by Mr Johnson arranged for 9 January 2012. This visit took place and, on this occasion, the defendant took the view that "termination of the contract would be a disproportional response to the breach of the remedial notice."
Mr Johnson's report
- Mr Johnson produced a report following his visit to the claimant's practice. It made for unhappy reading. Some of the more significantly adverse findings were as follows:
i) In many cases no record of the examination of the patient had been entered;
ii) In other cases there was a lack of detail in recording to the extent that the clinical records could be considered to fall below accepted standards;
iii) The materials and clinical techniques used were not properly recorded;
iv) The administration of radiographs was inadequate;
v) The planning of treatment was seldom recorded;
vi) Restorations repeatedly failed;
vii) Investigation of patients reporting symptoms of an acute dental condition was sometimes inadequate;
viii) Many of the claims submitted for courses of treatments were inappropriate.
Mr Johnson appended to his report specific comments relating to the patients reviewed.
- The defendant forwarded the Johnson report to the claimant by letter dated 1 February 2012 inviting his comments. It prompted a strong response from both the claimant and his solicitors refuting some of the criticisms and suggesting that the report contained a "plethora of errors". He accepted, however, in cross examination that his response did not address all of the criticisms made and that it omitted to deal with the points raised in five of the individual cases. He also accepted that, as things then stood, the criteria justifying the requirement of an NCAS assessment were still satisfied.
- On 13 March 2012, the defendant wrote to the claimant indicating that a referral had been made to NCAS. On 21 March 2012, the defendant sent the claimant a template to complete relating to this referral. All seemed set fair for the involvement of NCAS about which the claimant had previously expressed such enthusiasm.
- Regrettably, the progress which had been made over the preceding four months was then abruptly unravelled.
Rejecting NCAS
- By letter dated 1 June 2012, the claimant's solicitors wrote to NCAS suggesting that a meeting between NCAS and the claimant was voluntary and asking for confirmation of this. It went on to say that the claimant did not consent to such a meeting. Reference was made to previous correspondence and to a report which had been prepared by one Mr Renshaw on behalf of the claimant dated 22 April 2012.[1]
- Mr Newton, the NCAS advisor, responded to this letter pointing out that the claimant was under a contractual obligation to cooperate with an NCAS assessment. Mr Berry, in a separate letter to the claimant, urged him to co-operate and warned him in measured terms of the contractual consequences if he did not do so. In the absence of a response, Mr Berry wrote again to the claimant on 23 July 2012 asking him to co-operate.
- On 10 August 2012, the claimant's solicitors responded by challenging the defendant to point to the appropriate clause in the contract requiring co-operation and asserting that an NCAS assessment would be "nothing other than a waste of money and time".
The remedial notice
- A careful consideration of the contract on the part of the claimant and his legal advisors would have revealed the existence of clause 197 under the heading "Appraisal and assessment" which provided:
"197. The Contractor shall ensure that any dental practitioner performing services under the Contract…
197.2 co-operates with an assessment by the NPSA when requested to do so by the PCT"
- There is no dispute between the parties that NCAS had been part of the NPSA at the time of the drafting of the contract and that the reference therein to the NPSA should be now be read as being a reference to NCAS.
- Clause 329 provided:
"Where the Contractor has breached the Contract … and the breach is capable of remedy, the PCT shall, before taking any action it is otherwise entitled to take by virtue of the Contract, serve a notice on the Contractor requiring it to remedy the breach ("remedial notice")."
- On 14 August 2012 the defendant served a remedial notice on the claimant's solicitors stating that the claimant's refusal to engage with an NCAS assessment constituted a breach of clause 197 of the contract and requiring the claimant to provide confirmation that he was prepared to undergo an NCAS assessment within 28 days.
- The claimant did not agree to co-operate within the allotted time.
The termination notice
- Clause 332 of the contract provided:
"Where the PCT is satisfied that the Contractor has not taken the required steps to remedy the breach by the end of the notice period, the PCT may terminate the Contract with effect from such date as the PCT may specify in a further notice to the Contractor"
- The claimant's case was considered by the NHS Greater Manchester Lists and Contracts Committee which approved terminating the claimant's contract. Notice of termination was therefore served on the claimant dated 27 September 2012.
- In a letter dated 29 October 2012 the claimant's solicitors wrote to Mr Berry indicating that the claimant would be commencing High Court proceedings. They threatened to apply for an interim injunction if the defendant were to attempt to give effect to the termination notice which had been served. The defendant had, by now, instructed solicitors of its own who responded by letter dated 8 November 2012:
"The PCT does not currently intend to terminate your client's GDS Contract until such time as the dispute between the parties is resolved. Should our client's position change we will provide you with reasonable notice."
The Performers List
- Meanwhile, the defendant also took action to consider the removal of the claimant from its "Performers List". The Performers List is a list of primary care professionals who are entitled to provide primary care services for NHS patients. A decision was made by the defendant to seek to remove the claimant from its Performers List owing to his refusal to cooperate with the NCAS Assessment. The relevant regulations at this time were the National Health Service (Performers Lists) Regulations 2004. Regulation 9 set out the obligations on a performer who was registered on the defendant's list. These included Regulation 9(6) which provided:
"A performer, who is included in a relevant performers list of a Primary Care Trust, shall act in accordance with the undertakings that a performer is required by these Regulations to provide when applying for inclusion in that relevant performers list"
- The undertakings to be provided by a Performer applying to join the list (in accordance with which those on the list were obliged to act) included under Regulation 4(3)(d):
"undertaking to co-operate with an assessment by the NCAA, when requested to do so by the Primary Care Trust"
- The defendant took the view that, amongst other matters, by refusing to co-operate with an assessment by NCAS (the statutory successor to the NCAA), the claimant's presence on the list would be detrimental to the efficiency of the service and/or that he was unsuitable to be included in the Performers List.
- The claimant appealed against his removal from the Performers List to the First Tier Tribunal which heard his case on 8 April 2013. The outcome was that the claimant was "conditionally removed", with a condition that he undergo the NCAS assessment.
NHS England
- By the date of the hearing before the First Tier Tribunal, NHS England had taken over the contractual rights and duties of the PCT. NHS England considered the matter afresh and decided to terminate the contract and instructed their solicitors to write to the claimant's solicitors setting out the reasons for the termination.
The letter
- On 30 April 2013, solicitors acting on behalf of the defendant wrote to the claimant's solicitors purporting to lift the suspension of the termination of the claimant's contract and asserting that termination should take effect on 31 May 2013. Their reasons can be summarised thus:
i) The fact that the claimant had changed his position at the FTT hearing reinforced the defendant's view that it had been reasonable for him to be required to co-operate in the first place and that his High Court proceedings lacked substantial merit;
ii) The defendant continued to entertain serious concerns over the quality of treatment provided by the claimant and the appropriateness of his applications for payment;
iii) The claimant had taken a deliberate decision not to comply with a lawful requirement to undergo an NCAS assessment in spite of the clear terms of the remedial notice.
- Notwithstanding the expiration of the period identified in the letter of 30 April 2013, the defendant has been ordered by the court to treat the contract as if continuing in force for all purposes until trial to maintain the status quo.
The claimant's case
- Mr Butler sought to persuade me that the claimant is entitled to the relief sought on three broad grounds:
i) A private law remedy for breach of contract;
ii) A public law remedy; and/or
iii) A remedy under Article 1 Protocol 1 of the European Convention on Human Rights.
I propose to deal with each ground in turn.
Private law
- Part 2 of the contract bears the heading "RELATIONSHIP BETWEEN THE PARTIES". Within this Part are to be found the following clauses:
"9. In complying with this Contract, in exercising its rights under the Contract and in performing its obligations under the Contract, the Contractor must act reasonably and in good faith.
10. In complying with this Contract, and in exercising its rights under the Contract, the Board must act reasonably and in good faith and as a responsible public body required to discharge its functions under the Act.
11. Clauses 9 and 10 above do not relieve either party from the requirement to comply with the express provisions of this Contract and the parties are subject to all such express provisions."
- Accordingly, the obligation under clause 197 upon the claimant to co-operate with NCAS when requested by the PCT so to do is an express provision which must be complied with regardless of the obligation of reasonableness imposed by clause 10.
- The remedial and termination notices were valid and contractually effective. As at the date of the latter, the termination date of the contract was 31 October 2012.
- Despite the fact that it was not pleaded, the claimant relied upon clause 279 of the contract which provided:
"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 Board must make every reasonable effort to communicate and co-operate 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)."
- The claimant contended that this clause applied to the circumstances of this case. But even if this clause had been expressly pleaded I do not see how it could assist the claimant's case.
- In my judgment the NHS dispute resolution procedure is not material to the circumstances of this case because it is not intended to apply to this category of dispute. Furthermore, it was the claimant and not the defendant who commenced court proceedings. Even assuming, in the claimant's favour, that this clause obligated the defendant to communicate with and co-operate with him with a view to resolving the dispute before proceedings were commenced, I am satisfied that the defendant did just that. By the time the claimant had issued proceedings he was still saying that the service of the notices upon him was unreasonable and disproportionate. He was making no offer to co-operate with the NCAS assessment as he was contractually obliged to do. The consequences of his persisting breach had repeatedly been brought to his attention.
- As the claimant himself admitted, the defendant could have required him to co-operate with an NCAS assessment long before they actually took that step. He agreed to undergo such as assessment and then changed his stance. Even at that stage, the defendant sought to encourage him to comply and only when it was obvious that no progress was being made did they proceed to invoke the formal notice procedures.
- On a proper interpretation, the defendant's solicitors' letter of 8 November 2012 was a pragmatic attempt to preserve the status quo in response to the claimant's solicitors' threat to apply for an urgent interim injunction. It was perfectly sensible for them to offer a forensic breathing space to obviate the need immediately to expend time and money on a contested hearing in the High Court. The fact that the letter pointed out that reasonable notice would be given of a change in the defendant's position demonstrates that it was not intended to impact upon the long term substantive rights of the parties. No witnesses gave evidence on the point but on my construction of this document this was an indulgence and nothing more.
- Clause 332 of the contract provided:
"Where the Board is satisfied that the Contractor has not taken the required steps to remedy the breach by the end of the notice period, the Board may terminate the Contract with effect from such date as the Board may specify in a further notice to the Contractor."
- The effect of the letter of 8 November was to extend the date of termination, albeit retrospectively, upon reasonable notice. It could not have been within the legitimate contemplation of either party at the time that, as matter of private law, the defendant was offering any further indulgence than this or was assuming some additional burden of reasonableness or proportionality in its decision to terminate the contract in the absence of the accrual of further rights to the benefit if the claimant whether arising through novation, estoppel or otherwise.
- I find, therefore, that the defendant was contractually entitled to give notice of termination in its letter of 30 April 2013, for the reasons therein set out, and that the period of notice given was a reasonable one. The claim on this basis must fail.
Public law
- There was no issue between the parties that the claimant was entitled to bring his claim by ordinary action and was not constrained to bring judicial review proceedings merely because the defendant is a public body. The claimant, however, goes further and contends that he is entitled to raise points of public law and obtain public law remedies in this court.
- The public law point is limited to the defendant's decision to "lift the suspension" of the termination of the claimant's contract as articulated in the letter of 30 April 2013. For ease of reference, I will refer to this as the "April decision".
- I have already determined as a matter of private law that the decision was a contractually effective one which had the consequence of bringing the contract between the parties to an end. Mr Butler, however, seeks to persuade me that the defendant operates under public law constraints which introduce, in particular, a requirement of "proportionality" into the equation. His contentions are set out in a skeleton argument the length of which pays tribute to his industry and (in the light of Standard Bank plc v Via Mat International Ltd and Others [2013] EWCA Civ 490) bravery.
- In R v East Berkshire Health Authority ex p. Walsh [1985] QB 152, the applicant, a senior nursing officer employed by the health authority under a contract which incorporated the Whitley Council agreement on conditions of service in the health service, was dismissed by a district nursing officer for misconduct. He applied for judicial review for an order of certiorari to quash the dismissal on the grounds that the district nursing officer had no power to dismiss him and that there had been a breach of the rules of natural justice in the procedure which led up to his dismissal. The health authority raised the preliminary point whether the subject matter of the application entitled the applicant to apply for judicial review.
- The Court of Appeal held that an applicant for judicial review had to show that a public law right which he enjoyed had been infringed. Where the terms of employment by a public body were controlled by statute, its employees might have rights both in public and private law to enforce those terms but a distinction had to be made between an infringement of statutory provisions giving rise to public law rights and those that arose solely from a breach of the contract of employment. Since the health authority had performed its duty to incorporate the conditions and terms that had been negotiated by the Whitley Council in accordance with the statutory procedure for health service employees, the applicant was not seeking to enforce a public right but his private contractual rights under his contract of employment and, therefore, his application was a misuse of the procedure for judicial review.
- In this case, the claimant did not and could not complain that the very wording of the terms of his contract amounted to a breach of public law rights. I find that, applying the analysis of the court in East Berkshire, his rights are private contractual rights. May LJ held at p. 172:
"Having regard to the detailed terms of the applicant's contract with the authority, I do not think that the considerations which determine whether he was validly dismissed do go beyond that contract. I respectfully see no reason why those considerations in the circumstances of the instant case require to be tested broadly on arguments of public policy. The fundamental issues are whether the authority had grounds to dismiss the applicant summarily and whether they did so in accordance with his detailed terms and conditions of service.
For all these reasons I am driven to differ respectfully from the conclusion of the judge below. I do not think that there is any element of "public" or "administrative" law in this case rendering it susceptible to or suitable for proceedings for judicial review... On the contrary, there is in my opinion nothing in this case which takes it out of the "ordinary" (by which one intends no disrespect to either side) employer/employee unfair dismissal dispute, one which could and should long ago have been relatively cheaply determined by an experienced industrial tribunal"
- Purchas LJ held at p. 180:
"…the relationship between the applicant and the health authority was one which fell within the category of "pure master and servant" although the powers of the authority to negotiate terms with their employees were limited indirectly by statute and subordinate legislation. Any breach of those terms of which the applicant complains related solely to the private contractual relationship between the health authority and him and did not involve any wrongful discharge by the health authority of the rights or duties imposed upon it qua health authority. The rules of natural justice may well be imported into a private contractual relationship, vide the category of employee/master relationship envisaged in the first of the three categories described by Lord Reid in Ridge v. Baldwin [1964] AC 40 to which Sir John Donaldson M.R. has already referred but in such circumstances they would go solely to the question of rights and duties involved in the performance of the contract of employment itself. The manner in which the authority terminated, or purported to terminate, the applicant's contract of employment related to their conduct as employers in a pure master and servant context and not to the performance of their duties, or exercise of their powers as an authority providing a health service for the public at large. The importation by direct reference or by implication into a contract of employment of the rules of natural justice does not of itself import the necessary element of public interest which would convert the case from the first category envisaged by Lord Reid into one in which there was an element of public interest created as a result of status of the individual or the protection or support of his position as a public officer…
At the end of the day I find myself returning to the basic question, did the remedies sought by the applicant arise solely out of a private right in contract between him and the authority or upon some breach of the public duty placed upon that authority which related to the exercise of the powers granted by statute to them to engage and dismiss him in the course of providing a national service to the public? In my judgment there is no arguable case which can be mounted upon the facts disclosed even if they are all assumed in favour of the applicant to the effect that the remedies sought by him stem from a breach which can be related to any right arising out of the public rights and duties enjoyed by, or imposed upon the health authority. The only remedies sought by the applicant arise solely out of his contract of employment with them as opposed to any public duty imposed upon the health authority."
- In Hampshire County Council v Supportways Community Services Ltd [2006] EWCA Civ 1035 the claimant provided housing related support services under a contract with the defendant local authority. After nine months, the defendant purported to terminate the contract on the basis that the claimant was charging too much. The claimant sought to challenge the decision by way of judicial review. Neuberger LJ (as he then was) held:
"Can the Company seek a public law remedy?
34 … The primary question in this context is whether the Company should have been seeking only a private law remedy (as the Council contended), whether its remedy lay both in public and in private law (as the Company contended, albeit that it put its case primarily in public law), or whether it does not matter how its remedy is characterised (as the Judge held).
35 In my judgment, the basis of the Company's case was not in public law, but only in private law. The Company's complaint was that the Council had failed to comply with the Agreement, and the Company accordingly was seeking to enforce the Council's compliance. Subject to being contradicted by a closer analysis of the principles or by binding authority, such a complaint and such enforcement would appear to me respectively to involve a private law claim and a private law remedy, both of which are contractually based, albeit with common law and equitable aspects.
36 In answer to this, Mr Knafler first relied on the fact that the Council's obligations under clause 11.3 were, in reality, public law duties in that they can be traced directly to section 93 and to paragraph 71 of the 2003 Guidance. The fact that a contractual obligation is framed by reference to a statutory duty does not, in my view, render that obligation a public law duty. Of course, where the statutory duty is owed to a contracting party independently of the contractual obligation, he can normally expect to be able to seek a public law remedy by reference to the duty, as well as, or instead of, a private law remedy by reference to the obligation. However in the present case, the Council's public law duty, namely that arising under section 93, was owed to the Secretary of State in relation to the provision of grants. There was, as it seems to me, no question of that duty being owed to providers such as the Company.
37 Mr Knafler next relied on the fact that the nature of the Agreement, involving as it did the Council performing public administrative functions, was such that a claim brought under it would be a public law claim. That cannot, I think, be right. Virtually any contract entered into by a local authority, almost by definition, will involve it acting in such a way, as otherwise it would be acting ultra vires. Yet, it is clear that, as Mr Knafler rightly accepts, in the case of alleged breaches of many such contracts, a private law claim is the only type of claim which can be brought.
38 Thus, the mere fact that the party alleged to be in breach of contract is a public body plainly cannot, on its own, transform what would otherwise be a private law claim into a public law claim. There are, of course, circumstances where, in a contractual context, a public body is susceptible to public law remedies. However, where the claim is fundamentally contractual in nature, and involves no allegation of fraud or improper motive or the like against the public body, it would, at least in the absence of very unusual circumstances, be right, as a matter of principle, to limit a claimant to private law remedies.
39 Mr Knafler referred to a passage in the sixth (1999) edition of de Smith, Woolf and Jowell's Principles of Judicial Review , at paragraph 3–019, which includes the following three sentences:
"If a public function is being performed, and contract law does not provide an aggrieved person with an appropriate remedy, then action taken under or in pursuance of a contract should be subject to control by judicial review principles. Where a public body enters into a contract with a supplier, a dispute about the rights and duties arising out of the contract will often be determined by private law. However, the decision of a public body to enter, or not [to] enter, into a contract may be subject to judicial review."
40 The point made in the third sentence of that passage (which is expanded in paragraph 5–035 of the book) has no application here. It is true that the result of the review of which the Company complains did result in the determination of the Agreement and in the offer of a new contract whose terms it considered objectionable. This does not mean, however, that its claim is within the scope of the third sentence in that passage. Its claim is that the 2004 review was not carried out in accordance with the Agreement, not, for instance, that the Council acted in bad faith or was guilty of an improper motive in carrying out, or in failing to carry out, the 2004 review in accordance with clause 11.3. The Company's complaints that the Agreement was not properly determined, and that it was not offered a new contract on appropriate terms, are solely based on the contention that the Council failed to comply with its (purely contractual) obligation to carry out the 2004 review in accordance with clause 11.3.
41 Mr Knafler relied on the first sentence in the passage I have quoted from de Smith , on the basis that, if private law could not provide a satisfactory remedy in the present case, then the Company should be entitled to resort to public law remedies. As discussed above, it does indeed appear that the Company is only entitled, in terms of private law remedies, to damages for breach of clause 11.3, and it seems likely that such damages would be very difficult to assess. Indeed, it is quite possible that they would only be nominal, as the only consequence of the breach of clause 11.3 was its reflection in the terms of the new contract offered to the Company, and, as the Judge pointed out when considering the terms of the order, the Council had no obligation to enter into a new contract with the Company.
42 However, it cannot be right that a claimant suing a public body for breach of contract, who is dissatisfied with the remedy afforded him by private law, should be able to invoke public law simply because of his dissatisfaction, understandable though it may be. If he could do so, it would place a party who contracts with a public body in an unjustifiably more privileged position than a party who contracts with anyone else, and a public body in an unjustifiably less favourable position than any other contracting party.
43 Equally importantly, it appears to me that it would be wrong in principle for a person who would otherwise be limited to a private law claim should be entitled to base his claim in public law merely because private law does not afford him a sufficiently attractive remedy. It is one thing to say that, because a contracting party is a public body, its actions are, in principle, susceptible to judicial review. It is quite another to say that, because a contracting party is a public body, the types of relief which may be available against it under a contract should include public law remedies, even where the basis of the claim is purely contractual in nature.
44 Mr Knafler relied on a number of cases relating to the circumstances in which, when making a claim in relation to a contract with a public body, the other contracting party can make a claim in public law. Two of those cases appear to me to be of some relevance to the present dispute, and, indeed, to support the conclusion that the Company cannot rely on public law in this case.
45 In Mercury Energy Ltd -v- Electricity Corporation of New Zealand Ltd [1994] 1 WLR 521, Lord Templeman, giving the judgment of the Privy Council, said this at 529B:
"It does not seem to me likely that a decision by a state enterprise to enter into or determine a commercial contract to supply goods or services will ever be the subject of judicial review in the absence of fraud, corruption or bad faith."
That statement is plainly unhelpful to the Company's case: the only basis on which its claim is founded is breach of contract. Later, at 529G, Lord Templeman made the following observation, which also seems to apply to the present case:
"The causes of action based on breach of statutory duty, abuse of monopoly position and administrative impropriety are only relevant if the causes of action based on contract are rejected. If the causes of action based on contract are rejected, the other causes of action will only constitute attempts to obtain, by the declaration sought, specific performance of a non-existing contract. The exploitation and extension of remedies such as judicial review beyond their proper sphere should not be encouraged."
46 In Mercury Communications Ltd -v- Director-General of Telecommunications [1996] 1 WLR 48, Lord Slynn of Hadley, (who gave the only reasoned speech) referred in a passage at 57E–G to the importance of maintaining a degree of "flexibility as to the use of different procedures", namely public law and private law procedures. That case was concerned with the question of procedure than with that of remedy. Lord Slynn explained in the same passage that the plaintiff had properly brought private law proceedings because the dispute was "in substance and in form … as to the effect of the terms of the contract even if it can also be expressed as a dispute as to the terms of the licence". In the present case, the issues which we are considering concern the meaning and effect of the Agreement.
47 In these circumstances, I conclude that the Company has no claim which it can pursue by way of judicial review, and in particular by seeking public law remedies. Since preparing this judgment, I have had the opportunity of reading the judgment of Mummery LJ which deals with this aspect of the appeal on a somewhat broader basis, and with which I agree."
- This authority provides further strong support for the conclusion that it would be wrong to admit a public law element into this claim. In summary:
i) It would be difficult on any convincing jurisprudential basis to distinguish the Supportways case from the instant case so as to invest the latter with any more compelling element of public law;
ii) There is no allegation of fraud or improper motive or the like against the defendant in this case and there are no "very unusual circumstances" which would otherwise render it inappropriate to limit the claimant to private law remedies;
iii) In the circumstances of this case, if the claimant were afforded public law remedies the nature and extent of which went beyond those available in private law then it would place him in an unjustifiably more privileged position than a party who had contracted with a private health provider. It would also place the defendant in an unjustifiably less favourable position than any other contracting party.
- Furthermore, I take the view that if public law concepts were routinely introduced into otherwise straightforward contractual disputes merely because one of the contracting parties was a public body then the advantage of relative certainty would be lost and (as this case has clearly demonstrated) litigation would become more uncertain, more prolonged and more expensive.
- For these reasons, in the circumstances of this case, I decline to decide this issue on public law grounds.
- In any event, I find that even if I were to fall into the temptation of introducing any material elements of public law concepts or remedies into this case I would not come to any different conclusion than that which I have reached by the application of private law principles alone. I see nothing disproportionate or irrational in the defendant's decision to terminate the claimant's contract in either timing or circumstances. The following factors are salient:
i) The claimant had repeatedly demonstrated a disinclination (for whatever reason) to abide by the clearest terms of his contract;
ii) The claimant had, on occasion, either disengaged from the legitimate contractual process or imposed conditions upon compliance which were unjustified;
iii) The claimant had previously indicated his unqualified enthusiasm for an NCAS assessment only later to recant for no adequate reason;
iv) The defendant had shown a considerable degree of indulgence during the period leading up to the service of the termination notice and beyond. The history of the process and the reasons behind the decisions and suggestions made were set out in correspondence repeatedly and meticulously;
v) The issue of central importance was not just one of contractual discipline but extended to the welfare of patients which was potentially put at risk by the defendant's continued non-compliance.
- In his skeleton argument, the conclusions of which are summarised in paragraphs 389 to 400 (pp. 70-72) thereof, Mr Butler places considerable reliance upon the concept of "proportionality" in public law. Care must be exercised, however, in avoiding a "one size fits all" approach to public law challenges. Certainly in cases such as the present, even if (contrary to my primary findings) it were permissible to introduce an element of public law proportionality it would be far more restricted in scope than that advocated for on behalf of the claimant. At paragraph 70 of his skeleton argument, Mr Butler invites the court, in the circumstances of this case, to consider whether proportionality "may require attention to be directed to the relative weight accorded to interests and considerations."
- In R (Broadway Care Centre Limited) v Caerphilly County Borough Council [2012] EWHC 37 (Admin) the Claimant sought permission to challenge the decision of the defendant local authority to terminate its contract to provide care for elderly dementia sufferers at a care centre. Some of the issues arising were not conceptually far removed from those falling for consideration in this case. The court observed:
"99 At this point I do not find it necessary to embark on a minute examination of whether the test here is irrationality/Wednesbury reasonableness or "proportionality" since even a "proportionality" test would accord very considerable respect to the approach of the Local Authority."
- Finally, for the reasons give above, even if I had acceded to the claimant's invitation to adopt the broadest and most ambitious of his formulations of the scope of the defendant's public law duties, I would not, in the circumstances of this case, have found that the defendant had acted in breach of them.
Article 1 of the First Protocol of the ECHR
- Article 1 of Protocol No. 1 provides:
"Every natural or legal person is entitled to the peaceful enjoyment of his possessions. No one shall be deprived of his possessions except in the public interest and subject to the conditions provided for by law and by general principles of international law."
- The claimant alleges that the actions of the defendant have deprived him of a possession in a manner disproportionate to the legitimate aim to be achieved.
- I do not doubt that there are circumstances in which contractual rights can be properly characterised as possessions (see Association of General Practitioners v Denmark No. 12947/87: 62 D.R. 226 at 234). However, the claimant's contractual rights were as defined in the contract itself and must be looked at as a whole. The claimant cannot pull out all the plums and leave the duff behind. To allow the claimant to continue to reap the benefits of the contract without the need to satisfy the conditions which he must fulfil as part of the burden would be to give him a more valuable "possession" than he had ever acquired in the first place.
- My view is fortified by the fact that the claimant in this case acted deliberately in a way which put him in breach of a reasonable contractual provision which was never intended to be penal in any sense. The consequences of his actions were contractually unambiguous.
- In Broadway the claimant raised the same argument without success. The court held:
"122 Article 1 provides a right to peaceful enjoyment of one's possessions. The further skeleton argument is certainly concise in its submission, namely that 'the Claimant's rights under Article 1 have been infringed by the decision, and that it relies on its Convention Rights in these proceedings as a victim of the unlawful act, pursuant to Section 7 Human Rights Act 1998 - Jain -v- Trent Strategic Health Authority 2009 1 AC 853.
…It would certainly be novel if simple termination of a contract, or indeed individual care plan contracts, [were] regarded as a matter which engaged Article 1.
127 If the contract has been terminated wrongfully, the Claimant has private law remedies to enforce the rights enjoyed by it under that contract. I am conscious of how concisely the Claimant puts the matter, and how little authority is placed before me to which I can turn. However I do not here discern deprivation of possessions or ownership, or interference with "possessions" within the meaning of Article 1. If I were wrong in this, I nonetheless see no arguable prospect of success, for the same reasons as set out above."
- The court in Broadway laboured under the disadvantage of a dearth of cited case law of which this court could certainly make no legitimate complaint. Nevertheless, I am satisfied that its observations are both apposite to the circumstances of the present case and correct.
- I, therefore, reject the contention that Article 1 of Protocol No. 1 of the ECHR has any bearing on the outcome of this case and even if, hypothetically, it did I would not have come to any different conclusion on the merits.
Conclusion
- For the reasons given above I dismiss the claimant's claim and give judgment for the defendant.
