SSP Health Ltd v National Health Service Litigation Authority (Primary Care Appeals Service) & Ors

An NHS contract is an arrangement which, whether or not it would otherwise be a contract in law, creates no contractual rights or liabilities. Interest therefore cannot arise under the Late Payment of Commercial Debts (Interest) Act 1998, which depends on a qualifying contractual debt.

An adjudicator determining an NHS-contract dispute has a broad power to give directions, including directions as to payment and variation. Interest may be awarded on an equitable compensatory basis, but a claimant should provide evidence supporting the period and rate sought.

SSP Health Ltd sought judicial review of an NHS adjudicator’s refusal to award interest on an award of £587,808 under 22 arrangements for the provision of primary medical services. The arrangements described themselves as APMS contracts and stated that the provider was a Health Service Body and that each arrangement was an NHS contract.

The claimant argued that the arrangements could not be NHS contracts, that interest was required under contract, statute or common-law principles, that the adjudicator could vary the arrangements under section 9(12) of the National Health Service Act 2006, and that its A1P1 rights were engaged.

1. Disposition. The claim was dismissed. Permission was refused on the late challenge to the arrangements’ status. Grounds 2 and 3 failed, and the A1P1 ground did not arise.
2. NHS-contract status. A contractor may acquire Health Service Body status through the GMS or PMS Regulations even if it is not one of the bodies listed in section 9(4) of the National Health Service Act 2006. The status may extend to later arrangements. The APMS arrangements were therefore NHS contracts.
3. Adjudicator’s power. Section 9(11) and (12) gave the adjudicator power to make appropriate directions, including directions as to payment and variation. Section 9(5), however, prohibited treating an NHS contract as creating contractual rights or liabilities. The adjudicator had exercised her discretion by refusing an unsupported interest claim which supplied no calculation, contractual basis or justification for the rate.
4. Statutory interest. The Late Payment of Commercial Debts (Interest) Act 1998 could apply to a contract at law, but not to an NHS contract. Sections 1 and 3 required a qualifying debt created by a contractual obligation. An NHS adjudication award was created by the adjudicative process, not by contractual rights under the arrangement.
5. Equitable interest. Interest could in principle be awarded on an equitable basis to compensate for being kept out of money. The claimant should provide material supporting both the relevant period and the rate. The court applied the principles summarised in Carasco v Johnson [2018] EWCA Civ 87.
6. Costs. Costs were awarded to both Interested Parties. The Second Interested Party’s costs were allowed in full. The First Interested Party’s costs were summarily assessed at £60,000.

First-instance judicial review proceedings in the Administrative Court. The judgment records no earlier decision under appeal.