Pitalia & Anor v The National Health Service Commissioning Board

A personal medical services agreement remained an NHS contract where the contractor’s existing health service body status continued both contractually and under the applicable transitional legislation. The absence from a later variation of an express statement that the agreement was an NHS contract did not alter that status.

Under section 9(5) of the National Health Service Act 2006, an NHS contract creates no enforceable contractual rights or liabilities. A contractual claim based upon such an agreement therefore discloses no cause of action and may be struck out. A late amendment seeking strike-out may be permitted where it causes no relevant prejudice.

Two general practitioners claimed damages from a primary care trust for failure to pay superannuation contributions. Their original personal medical services pilot agreement described them as having health service body status. Following statutory abolition of the pilot scheme, the agreement became transitional and was subsequently varied.

A district judge stayed the proceedings under section 9(1) of the Arbitration Act 1996. Stuart-Smith J dismissed the practitioners’ appeal but did not decide whether the varied agreement was an NHS contract. On the second appeal, the central questions were whether the varied agreement remained an NHS contract and, if so, whether the respondent could amend its application to seek strike-out instead of a stay.

1. Proceedings struck out rather than stayed. The court unanimously held that the pilot agreement, as varied, remained an NHS contract until 1 December 2012. The respondent was permitted to amend its application, and the practitioners’ contractual proceedings were struck out.

2. Vos LJ held that the practitioners’ health service body status continued through both contractual and statutory routes. The pilot agreement continued as a transitional agreement under article 58 of the General Medical Services and Personal Medical Services Transitional and Consequential Provisions Order 2004. The later variation made the pilot permanent and thereby continued the relevant terms of the original agreement. Article 68(1) independently preserved the contractor’s health service body status.

3. Regulation 10 of the National Health Service (Personal Medical Services Agreements) Regulations 2004 required an agreement involving a health service body to state that it was an NHS contract. Its omission from the variation did not negate the status already continued from the pilot agreement. Even if the omission had amounted to a breach, regulation 10 prescribed no consequence capable of overriding article 68(1) or section 9 of the National Health Service Act 2006.

4. Section 9(5) of the 2006 Act prevented the NHS contract from giving rise to contractual rights or liabilities. The practitioners therefore had no enforceable contractual rights when proceedings were issued. Aikens LJ added that strike-out under CPR Part 3.4(2) followed because the claim disclosed no reasonable ground or constituted an abuse of process.

5. The late amendment caused no relevant prejudice. Rights arising after the agreement ceased to be an NHS contract could be pursued in fresh proceedings. Earlier alleged rights had never been legally enforceable. CPR Part 11 and Part 3.9 were inapplicable because the amendment raised neither a jurisdictional challenge nor an application for relief from sanctions.

6. The court did not determine whether the dispute-resolution provisions constituted an arbitration agreement. Aikens LJ nevertheless considered that section 9(5), through its application for all purposes, would prevent an NHS contract from creating enforceable arbitration rights notwithstanding the usual severability of an arbitration agreement.

1. Court of Appeal (Civil Division): In [2014] EWCA Civ 474, held that the varied agreement was an NHS contract, permitted the respondent to amend its application, and ordered the proceedings to be struck out rather than stayed.
2. High Court: Stuart-Smith J dismissed the practitioners’ appeal from the stay. He held that the original dispute-resolution procedure survived but did not decide whether the varied agreement was an NHS contract.
3. County Court: District Judge Relph stayed the proceedings under section 9(1) of the Arbitration Act 1996, holding that a binding arbitration procedure subsisted and that the varied agreement was an NHS contract.