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NHS or private law contract? How to decide

GPs need to decide whether they want their practices to become a health service body with access to the NHS's internal disputes resolution service, or instead have a private law contract ­ solicitor Daphne Robertson gives advice

Practices need to understand what is meant by health service body status. Essentially, any contract they enter into with another health service body is treated as an NHS contract (or in Northern Ireland, a Health and Social Services contract). For instance, the PCO contract that the practice must enter into by March 31 can be treated as an NHS contract. So can the default contract. The PCT is a health service body and so are NHS trusts and strategic health authorities, special health authorities and most PMS providers. NHS contracts have a different mechanism for resolving a contract dispute.

An NHS contract does not allow the usual contractual rights and liabilities under common law. So you cannot pursue an action under an NHS contract through the court or through mediation. If a dispute arises when an NHS contract is being negotiated or once it has been entered into, the dispute will be formally resolved by the Secretary of State or his appointed adjudicator in accordance with NHS contracts dispute resolution regulations.

Usually the adjudicating body will be the family health services appeals authority (special health authority) or its equivalent. If it is important to factor local knowledge into the adjudication process, the strategic health authority (or its equivalent) may be appointed. Such cases might involve list closure, patient assignment and adherence to opt-out procedure.

But what sort of disputes might we be talking about? Let us take an example. After April 1 the PCT might consider that a practice is trying to take advantage of its position as the only provider of certain enhanced services. In such circumstances the PCT could refer the proposed arrangement to the Secretary of State to make a decision. Similarly, the practice might not be satisfied with funding it is receiving and could refer the matter to the Secretary of State.

Taking health service body status is voluntary. The practice can also opt out at any time. This will have no effect on existing NHS contracts, but contracts subsequently entered into will have separate legal status as private law contracts. The practice ceases to have health service body status on the date specified by the GP partners and notified to the PCT.

Again, applications for health service body status can be made at any stage. But the Department of Health is encouraging practices to decide quickly so that contract negotiations between the practice and the PCT can 'go ahead as soon as possible and on the correct footing'.

If a practice becomes a health service body, not all its other contracts will be governed by NHS contracts dispute resolution procedures. Contracts with non-health service body organisations, including employment contracts with staff, are considered private legal contracts in the normal way.

If a dispute, for instance with a PCT, is referred to the family health services appeals authority (special health authority) there are time limits for the stages of resolution.

 · The appeals authority will give practice and PCT the opportunity to make written representations.

 · Practice and PCT may be invited to a meeting to make oral representations.

 · Experts may be consulted.

 · The appeals authority will record its decision in writing, with reasons.

The adjudicator's powers are very wide, and the NHS contract can be terminated or varied and both parties to the NHS contract are deemed to agree to the final decision.

Partnership changes do not alter the practice's health service body status. Practices would be wise to include a provision in the partnership deed to this effect. However, if a practice splits, the health service body status ends.

The department's GMS2 guidance seems to encourage practices to go for health service body status as it will keep bureaucracy and legal costs to a minimum. The GMS2 procedure is very similar to the PMS procedure.

Since practices can opt in at any time, why not wait until a dispute occurs and then assess whether opting to become a health service body gives you any advantages over the contractual procedures or remedies available under common law?

Daphne Robertson is the founding solicitor with DR Solicitors, London (020 7231 3157)

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