Dusza & Anor v Powys Teaching Local Health Board

In construing a standard-form healthcare services contract, the court must ascertain the meaning conveyed to a reasonable person in the relevant commercial and contractual context. The word “examination” required a full mouth examination where that was the sensible contractual purpose. However, an obligation to keep accurate treatment records did not make recording an examination a condition precedent to payment. Unless the contract clearly provides otherwise, breach of a record-keeping obligation does not automatically extinguish entitlement to payment for services actually provided.

The claimants, dental practitioners, challenged by judicial review a decision requiring them to repay £110,012.42 to the defendant health board under a Standard General Dental Services Contract. The dispute initially involved several grounds, including whether the decision was amenable to judicial review and whether alternative remedies should have been pursued. By the hearing, the parties agreed that the court should determine the proper interpretation of the contract.

The central issues were whether “examination” meant a full mouth examination and whether failure to record that examination in a patient record prevented payment for the relevant course of treatment or units of dental activity.

1. The court determined the contractual interpretation issue in favour of the claimants in part. The relevant approach was that stated by Lord Hoffmann in Investors Compensation Scheme Ltd v West Bromwich Building Society [1998] 1 WLR 896: the meaning of the contract was the meaning it would convey to a reasonable person with the relevant background knowledge.

2. Read in that context, “examination” meant a full mouth examination. The purpose of examination was ordinarily to assess the patient’s overall oral health, and restricting it to the particular area about which the patient complained would produce an unsatisfactory possibility of successive limited examinations.

3. The contract required the claimants to keep a full, accurate and contemporaneous patient record, including the examination. That requirement was important for patient care and for checking that payment was made only for work performed.

4. Nevertheless, the contract did not make accurate recording of the examination a condition precedent to payment. If the parties had intended that consequence, it would have been expected to appear in clear contractual language. The nature and extent of treatment could also establish that an examination had taken place, even if it had not been recorded.

5. The court therefore rejected the construction that breach of the record-keeping obligation automatically entitled the defendant to withhold or recover payment for the course of treatment. Entitlement depended on whether the claimants had established that they provided the units of dental activity justifying payment. Evidence of the practices of other health boards was excluded as inadmissible extrinsic evidence.