Court of Appeal blocks NHS England from terminating dental contract

Out-Law News | 16 Oct 2019 | 12:10 pm | 2 min. read

The Court of Appeal of England and Wales has prevented NHS England from terminating a pilot scheme through which intermediate minor oral surgery (IMOS) is provided by local dentists.

Three dentists, who contracted with the former Croydon Primary Care Trust (PCT) to provide general dental services (GDS) in 2006, participated in a pilot scheme transferring IMOS from hospitals to primary care. The scheme was governed by a 12-month fixed-term contract, which each dentist entered into in 2007. The PCT was entitled to terminate the IMOS contract on one month's notice. It is only entitled to terminate a GDS contract in the event of default by the dentist.

The dentists continued to provide IMOS services on the same terms on expiry of the fixed term contract. In 2009, each signed a variation agreement form (VAF) incorporating the IMOS contract into the GDS contract. In 2016 NHS England, into which Croydon PCT was absorbed when PCTs were abolished in 2013, attempted to terminate the IMOS scheme by giving the notice required under the original IMOS contract.

Paul Krivosic

Associate

It is important that dentists always check their contract variations are constructed correctly to avoid ambiguity or problems with interpretation.

The Court of Appeal, in its judgment, agreed with the dentists, who had argued that the VAF had varied the GDS contract, with the effect that IMOS services were now being delivered on GDS terms. The court said that, had the parties made reference to the termination right under the IMOS contract in their VAF, this would have been enough for the right to be transferred into the GDS contract. However, as they did not, NHS England had lost the right to end the IMOS scheme by giving one month's notice.

Healthcare expert Paul Krivosic of Pinsent Masons, the law firm behind Out-Law, said: "Historically Primary Care Trusts and local area teams (LATs) throughout England and Wales took different approaches to contract variations and this case highlights the problems that this can cause".

"The NHS Policy Book, which offers prescribed documents for LATs to use, has helped reduce the likelihood of a similar dispute arising in respect of contract variations that have been issued subsequently. However, it is important that dentists always check their contract variations are constructed correctly to avoid ambiguity or problems with interpretation," he said.

The GDS contract is a lengthy standard form contract which governs the provision of general NHS dental services in England. It sets out a number of mandatory services that contractor dentists must supply; but does not cover 'additional', or 'advanced', services, which are negotiated separately.

The GDS contract may be terminated by mutual agreement, or by notice given by the dentist. PCTs and NHS England do not have a general right to terminate the contract. It can only do so following default by the dentist, the meaning of which is set out in detail elsewhere in the contract. The GDS may be amended or varied, but only if agreed in writing by both the PCT and the contractor dentist.

NHS England argued that the single-page VAF signed by each dentist was insufficient to amount to a binding variation of the GDS contract. It argued that all the VAF did was describe a service in very general terms, but contained no details of what that service consisted of and made no provision for payment. Its argument was that the dentists continued to provide the IMOS services of the same basis as before.

The High Court had originally found in favour of the dentists, but did so based on the contents of the email sent along with the VAF and the oral evidence of the contracting parties. While the Court of Appeal also found in favour of the dentists, it disagreed with much of the trial judge's reasoning.

The Court of Appeal found that, as the GDS contact provided that variations must be made in writing, only the wording of the VAF itself could be relied on. The general intention to include the IMOS service within the GDS contract was "plain from the words of the VAF itself", and so the variation was valid. However, the variation did not include any of the terms of the IMOS contract.

The IMOS services, once incorporated into the GDS contract, were therefore to be delivered in accordance with the terms of the GDS contract, the Court of Appeal ruled.