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

An adjudicator determining a dispute under an NHS contract has power under sections 9(11) and 9(12) of the National Health Service Act 2006 to award interest where appropriate. A party kept out of money to which it was entitled should prima facie receive compensation for that delay, subject to the circumstances of the particular case.

The adjudicator cannot invoke an inherent equitable jurisdiction. However, statutory interest regimes and equitable compensatory principles may inform the discretionary assessment by analogy. If an adjudicator wrongly proceeds on the basis that no power to award interest exists, the decision must be reconsidered under the correct statutory approach.

SSP Health Ltd provided primary care services under 20 arrangements constituting NHS contracts under section 9 of the National Health Service Act 2006. After finding that NHS England had underpaid SSP, an NHS dispute-resolution adjudicator awarded £587,808 but refused the claimed interest.

SSP sought judicial review. Cockerill J held in [2019] EWHC 3291 (Admin) that the adjudicator had recognised her power to award interest and had lawfully declined to exercise it. SSP appealed.

The central questions were whether the adjudicator had instead acted on the basis that she lacked power to award interest, and whether the matter should be remitted for reconsideration.

1. Appeal allowed. Stuart-Smith LJ gave the judgment, with which Rose and Lewison LJJ agreed. The adjudicator had acted on the erroneous basis that she lacked power to award interest. The dispute was remitted to the same adjudicator to decide whether interest should be awarded.

2. Sections 9(11) and 9(12) of the National Health Service Act 2006 confer power to award interest. Section 9(11) authorises such directions, including payment directions, as the adjudicator considers appropriate to resolve the dispute. That provision operates alongside the wide power under section 9(12) to vary the arrangement.

3. Where a party has been kept out of money to which it was rightfully entitled, it is prima facie appropriate for the resolution to compensate that delay. A blanket policy against interest would be unjustified. Particular circumstances may nevertheless make an award inappropriate, and the adjudicator must determine that question on the facts.

4. The Late Payment of Commercial Debts (Interest) Act 1998 did not apply directly because an NHS contract is not a contract at law. The interest provisions of the Senior Courts Act 1981 and the County Courts Act 1984 were also inapplicable because the adjudicator was not a court. Nor could the adjudicator invoke an inherent jurisdiction to grant equitable remedies. Those statutory regimes and general equitable principles could, however, inform by analogy what was appropriate under section 9.

5. The adjudicator's reasons were opaque. The absence of an asserted legal basis, the contractual silence about interest and the non-contractual legal status of an NHS contract all concerned the existence of the power. They were irrelevant reasons for declining to exercise a power which the adjudicator recognised that she possessed. Read naturally, the reasons showed that she had proceeded on the basis that no power existed.

6. The Court of Appeal expressed no view about the appropriate period, calculation or rate of interest. Those matters were for the adjudicator after obtaining any further information or explanation required.

1. Court of Appeal (Civil Division): In [2020] EWCA Civ 1574, unanimously allowed the appeal and remitted the interest question to the same adjudicator.

2. High Court, Administrative Court: Cockerill J held in [2019] EWHC 3291 (Admin) that the adjudicator had recognised her power to award interest and had lawfully declined to exercise it. The Court of Appeal reversed that conclusion.