On Medical Ltd v Medco Registration Solutions Ltd

When deciding whether to grant an interim injunction restoring a party to a regulated or categorised status, the court must assess the practical consequences of granting or withholding relief. The appropriate course is the one likely to cause the least irremediable prejudice, including prejudice to third parties and the integrity of the relevant system.

A contractual escalation or alternative dispute resolution clause does not necessarily remove the court’s jurisdiction to grant interim relief, but it is a significant factor in the discretionary balance. Where the claimant remains in breach of contractual qualifying criteria, and the defendant has a contractual power to suspend one category of service while retaining another, the court should generally avoid intervening before the agreed procedure has run its course.

The claimant operated as a high-volume national medical reporting organisation on the defendant’s portal. Following an audit, the defendant withdrew that status but allowed the claimant to remain as a regional organisation. The claimant sought interim orders restoring its former status and restraining further suspension pending the contractual escalation procedure.

The claim was framed in contract. The claimant alleged procedural and substantive breaches, inadequacy of damages and greater prejudice if relief were refused. The defendant relied on continuing non-compliance, the contractual suspension powers, and clause 10.5, which restricted court proceedings before completion of the agreed escalation process.

The central issues were whether interim relief should be granted despite the escalation clause and how the balance of convenience should be assessed.

1. Application refused. The claimant had an arguable contractual claim, but it was not particularly strong. The court therefore considered the practical consequences of granting or withholding relief rather than applying only the threshold of a serious issue to be tried.
2. Applying the principle stated by National Commercial Bank of Jamaica v Olint Corporation Limited (Jamaica) [2009] UKPC 16, the court had to select the course likely to cause the least irremediable prejudice. That assessment included the claimant’s financial and reputational loss, the defendant’s regulatory role, the interests of portal users and the integrity of the portal.
3. Clause 10.5 did not oust the court’s jurisdiction to grant interim relief. It nevertheless expressly prohibited proceedings concerning the dispute until 30 days after service of the ADR notice and was a highly relevant factor against intervention.
4. The defendant had power under the user agreement and compliance procedure partially to suspend the claimant. It could withdraw tier-one status while leaving the claimant as a tier-two provider because the qualifying criteria for the two categories differed.
5. The claimant accepted or relied on evidence indicating continuing failures to meet several qualifying criteria. Even if the claimant had been misled about the submission of further evidence, it was difficult to see how that evidence could overcome the continuing breaches. Pending the contractual escalation process, the court should not interfere with the defendant’s decision.
6. The defendant was the successful party. Costs were summarily assessed at £30,391.50, payable within 14 days.