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PMS practices lose court battle on unilateral contract ‘termination’ clauses

GPs have lost their battle against their PCTs' right to unilaterally axe their PMS contracts with six months notice, after the High Court ruled in the trusts' favour.

The group of 20 GPs from Havering and Greenwich had challenged their PCTs and the Department of Health on the legality of PCT moves to terminate deals and whether the secretary of state was entitled to insert a new clause into PMS contract regulations that gave the green light for 'without grounds' terminations.

But a High Court ruling that will have huge ramifications for the 40% of practices in England working under PMS contracts has granted PCTs the ability to retain their right to terminate contract with six months notice.

The case was brought following moves by NHS Havering and NHS Greenwich to write in 'variations' to PMS contracts that GPs claimed could be used to impose reduced levels of funding or tougher performance measures.

Barrister Simon Butler from Ely Place chambers, representing the GPs, had argued against the legality of allowing PCTs to terminate PMS contracts with such little notice, and said the GPs had been led to believe they were on permanent deals. He had also argued former secretary of state Andy Burnham's move to alter the 2010 regulations were ‘inconsistent' with 2004 PMS regulations.

But the High Court ruling disagreed and ruled against the GPs.

The Hon. Mr Justice Nicol , who passed judgement on the case, said: 'In 2010 the PCTs unilaterally changed the contracts so as to include provision which would permit the contracts to be terminated on six months notice. The PCTs did so in response to regulations which were made by the secretary of state for health on 3rd March 2010 and which came into force on 1st April 2010.

‘The arguments which the claimants raised have not succeeded. In my judgment the claimants have not shown a reasonably arguable case. Accordingly, on an examination of their merits I would refuse all the claimants permission to apply for judicial review.'

The Judge also rejected the claimants' challenge to the vires of the 2010 Regulations. ‘In my judgment, it was within the statutory power of the secretary of state to make them,' he said.