Moreton, R (on the application of) v Medical Defence Union Ltd.

A private mutual defence organisation is not amenable to judicial review merely because its discretionary indemnity for healthcare professionals has significance for patients or operates within a regulated professional environment. The court must identify a sufficient governmental connection or a function which is governmental in character. A professional requirement to hold insurance or indemnity does not itself convert the provider into a public body or public-function actor. Members’ remedies arise from the organisation’s constitution, statutory contract and the general law. Public interest in compensating persons injured by negligence does not impose public-law duties on a private organisation exercising contractual discretion over discretionary indemnity.

The claimant sought judicial review of the Medical Defence Union Ltd’s decision not to indemnify an orthodontist against numerous private negligence claims. The preliminary issue was whether the defendant was amenable to judicial review because it was a public body or because it was exercising a public function affecting the claimant under CPR 54.1(2)(a)(ii).

The defendant was a private company limited by guarantee. It provided discretionary membership benefits under its constitutional documents and operated on a mutual basis. The claimant relied on the statutory provision of dental services, professional regulation by the General Dental Council, and the historical relationship between government, health authorities and defence organisations.

1. The preliminary issue was decided in favour of the defendant. The defendant’s decision whether to grant discretionary indemnity was not amenable to judicial review.
2. The defendant was a private company limited by guarantee. Its members had a contractual and constitutional right only to have requests for discretionary benefits fairly considered. Article 48(3) conferred an absolute discretion to grant, restrict, terminate or refuse indemnity without giving reasons. This was consistent with Medical Defence Union Ltd v Department of Trade [1980] Ch 82.
3. The statutory duty to provide or secure dental services under the National Health Service Act 1977 did not require practitioners to have indemnity against negligence claims. The availability of NHS indemnity for employed practitioners arose from employer liability and did not establish a general governmental policy requiring private practitioners to be insured.
4. General Dental Council guidance requiring dentists to hold appropriate indemnity or defence-organisation membership did not make the defendant a public body. The guidance treated discretionary membership as adequate cover and did not create a governmental function in the defendant.
5. A private body may be subject to judicial review where it performs a governmental function which retains that character after delegation or privatisation. The examples in R (Heather) v Leonard Cheshire Foundation and HM Attorney General [2002] EWCA Civ 366 and [2002] 2 All ER 936, and R (A) v Partnerships in Care Ltd [2002] EWHC 529 (Admin), did not assist because no relevant governmental function was identified here.
6. The reasoning concerning bodies woven into public regulation in R v The Jockey Club, ex parte Aga Khan [1993] 1 WLR 909, R v The Panel on Take-overs and Mergers, ex parte Datafin Plc [1987] QB 815 and R v Advertising Standards Authority Ltd ex parte Insurance Service Plc (1989) 2 Admin.L.R.77 did not establish a sufficient connection between the defendant and government.
7. The defendant remained subject to company law and the general law. Members could act through the company’s constitutional mechanisms, including alteration of the Articles and removal of directors. Equity, natural justice and the broad public interest in compensating patients did not transform the contractual discretion into a public-law power.