Costco Wholesale UK Ltd v Milton Keynes Primary Care Trust & Anor

Under the National Health Service general ophthalmic services scheme, inclusion on an ophthalmic list gives practical effect to an eligible person’s right to choose a listed contractor. Once the prescribed application is made and eligibility and need are verified, the contractor must provide the test. A listed contractor cannot impose an additional membership condition.

A payment required before the contractor will consider providing services is remuneration in respect of those services, even if it also secures other benefits and the service may never be used. Such a condition contravenes the prohibition on charging for general ophthalmic services.

Costco appealed under section 11 of the Tribunals and Inquiries Act 1992 against the Family Health Service Appeal Authority’s decision of 18 April 2006, which upheld Milton Keynes Primary Care Trust’s refusal to include Costco on the ophthalmic list.

The Authority considered that Costco’s membership conditions contravened the statutory scheme and the terms of service. It alternatively relied on equality of access to National Health Service services. The central issues were whether Costco could provide general ophthalmic services only to members, guests or relatives of members, and whether the membership subscription was a prohibited payment.

1. Appeal dismissed. The statutory scheme had to be read as an integrated whole.
2. Sections 38 and 39 of the National Health Service Act 1977, together with the National Health Service (General Ophthalmic Services) Regulations 1986, created complementary rights. A practitioner’s right to inclusion on the list formed part of the machinery securing the public’s right to choose an ophthalmic optician.
3. Under regulation 13A, an eligible person who followed the prescribed procedure could apply to any contractor on the list. Subject only to the checks specified in regulation 13A(4), the contractor became obliged to carry out the sight test. No additional practitioner-imposed condition was permitted.
4. The membership requirement contravened paragraph 9(4) of Schedule 1, the terms of service. The subscription was payment for Costco’s services, including any ophthalmic services it provided. It was therefore remuneration “in respect of” those services, whether or not the payer was eligible, applied for a test, or used the service. The phrase was given its ordinary and wide meaning, consistently with R (Geologistics Ltd) v Financial Services Compensation Scheme [2003] EWCA Civ 1905.
5. The wider principle of equality of access did not need to be decided. Its legal foundation was unclear and the evidence was inadequate to support the balancing exercise. The statutory and charging grounds were sufficient to dispose of the appeal.

High Court (Administrative Court): The appeal under section 11 of the Tribunals and Inquiries Act 1992 was dismissed. The decision of the Family Health Service Appeal Authority dated 18 April 2006 was upheld in substance.