Contact The Author:

Chapter 3: GPs and Practice Contracts with NHS England

Written by 

This chapter was updated in June 2014

 

GPs and Practice Contracts with NHS England. 

 

This chapter contains:

 

1.          Background to GP contracting.

2.          A short history of GP Contracting.

3.          How the NHS Act 2006 provides for the different types of GP practice contract.

4.          Details of the different types of GP commissioning contracts including:

·      GMS Contracts

·      PMS agreements

·      APMS agreements

·      The present status of former 1997 pilot scheme contracts (as varied in 2004)

5.          The Legal relationship between the parties to a GP contract and the NHS commissioner.

6.          The legal relationships between a GP and a primary care practice.

7.          The distinctions between NHS Contracts and legally binding contracts.

8.          Resolving disputes before a primary care contract is signed.

9.          The NHS Disputes Resolution Procedure.

10.       Variation and updating of GMS and PMS agreements.

11.       The changes made to the GP contract in April 2014.

12.       Entire Agreement clauses and exclusion of prior representations clauses.

13.       Third party Rights under GP practice contracts.

 

1           Background

 

1.1          Unlike doctors working in hospitals, General Practitioners have never been required to be employees of the NHS.  General practices operated as private sector businesses prior to World War II, with many patients covered by insurance schemes.  As a result the British Medical Association rejected the government’s original proposal that GPs should become local authority employees and argued that they should remain as self-employed individual professionals, contracting into the new NHS as required.  This reality was accepted by the Minister for Health, Rt. Hon Aneurin Bevan, MP, and thus when the NHS was set up in 1949 (as a result of the National Health Service Act 1946), general practices continued without general practice doctors being required to become NHS employees.  GPs have largely remained as self-employed professionals operating “for profit” businesses since the NHS was created.

 

1.2          Although there have been various experiments with directly employed GPs working for the NHS, these have not been successful or popular with doctors.  Hence the vast majority of GP practices are staffed by doctors who are not employees of the NHS but who work under a variety of contractual relationships to deliver services to NHS patients.   For the majority of the life of the NHS, the vast majority of GP practices operated as single handed practices or medical partnerships where the partners were the GPs who delivered the majority of the services to patients.   Thus the GP both delivered professional medical services to NHS patients and was a “business owner”, because he or she owned a share of the business in which those medical services were delivered. 

 

1.3          In recent years the complex demands of general practice, the investment needed to deliver an effective GP service and the transfer of medical work from hospitals into the community means that a distinction has emerged between the GPs who provide professional services to NHS patients and the individuals who own the medical businesses within which those services are delivered.  Super practices, federated practices and medical companies all compete for NHS general practice contracts.  It should, of course, be largely irrelevant to the patient whether the GP who sits on the other side of the consulting room table is a partner, salaried partner, salaried employee of a practice or a locum.  The services provided by the GP should be driven by the professional obligations owed by the GP, as a professional doctor, to the patient.  There would be something seriously awry if the services that patients receive are affected by the status of their NHS GP.  However the legal duties owed by a GP to everyone other than the patient are vastly different depending on the status of the GP.

 

2           GP contracting – a brief history[1]

 

2.1          Section 29 of the National Health Service Act 1977 provided that Health Authorities were required to “arrange as respects their area with medical practitioners to provide personal medical services for all persons in the area who wish to take advantage of the arrangements”.  Thus, under the NHS 1977 Act (and the NHS Act 1946 which preceded it), GP practises were licensed by the NHS to deliver services to NHS patients, and were paid for providing primary care services to those NHS patients under a statutory scheme.   The terms of service for GPs were set out in Regulations and the payment scheme was governed by Directions made by the Secretary of State.   This scheme was known as “General Medical Services” and, at the time, was the only mechanism under which GPs could provide primary care services for NHS patients.

 

2.2          In 1991 the Conservative government created the division between “purchasers” and “providers” in the NHS.  The legislation which brought this about was the National Health Service and Community Care Act 1990.  It created two models of commissioning – one based on health authorities, and the other based on general practice.  General practices were encouraged to become commissioners through a route known as “fundholding”.  This broadly meant that the GP practice held the budget that was used to commission secondary care for the patients of the practice.

 

2.3          Under GP fundholding GPs held real budgets with which they purchased primarily non-urgent elective and community care for patients; they had the right to keep any savings and had the freedom to deliver new services. The aim was to give GPs a financial incentive to manage costs and to apply some competitive pressure to hospital providers.  Some GP practices came together in consortia, creating larger organisations to pool financial risk and share resources.  From 1994 the total purchasing pilot scheme (TPP) allowed general practices – either individually or in groups – to commission all services for their patients, though most were highly selective in what they chose to purchase.  TPPs acted as sub-committees of health authorities and used an indicative, rather than a real, budget.  However the payment to the GPs for their own work continued to be under the general statutory scheme. Section 29(4) provided somewhat cryptically that payment to a GP:

 

“…  shall not, except in special circumstances, consist wholly or mainly of a fixed salary which has no reference to the number of patients for whom he has undertaken to provide such services”

 

2.4          The details of the payment to GPs under GMS contracts is set out in the annual “Statement of Fees and Entitlements” (“SFE”).  This is a Direction made by the Secretary of State every year which sets out the sums that GP practices are entitled to be paid for every aspect of their work.  The 2014 SFE can be accessed here.  Payment under many PMS or APMS agreements is linked to the sums paid under the SFE.

 

2.5          The Labour government abolished GP fundholding in 1997 but retained the purchaser/provider split.  However just before the 1997 general election Parliament passed the National Health Service (Primary Care) Act 1997.  The 1997 Act introduced a new form of “arrangement” for primary care contracting called a “personal medical services” (“PMS”) agreement.  The original PMS agreements were pilot agreements (under part 1 of the 1997 Act) which were only designed to last for a limited period.    There was no “standard” form of wording for a PMS agreement because the idea was to allow local health authorities to be flexible in agreeing new ways of working with innovative GPs.  A doctor who provided GP services to NHS patients under a PMS agreement was not permitted to deliver General Medical Services but could revert back to a GMS arrangement at any point.

 

2.6          Part II of the 1997 Act proposed amendments to the NHS Act 1977 which allowed Health Authorities to enter into permanent PMS agreements.  However these powers were not implemented until March 2004 because the Department of Health wanted to evaluate the success or otherwise of the temporary pilot PMS agreements which had been brought into existing under Part 1 of the 1997 Act.

 

2.7          However by 2004 the government had decided that all GP practices should have contracts with their local NHS commissioners (who were Primary Care Trusts at that stage).  This signalled an end to GPs being paid under a statutory scheme.  It follows that the primary legal relationship between the NHS commissioner and the GP ceased to be based on statutory duties and became a contractual relationship. 

 

2.8          The transition from pilot agreements to permanent PMS agreements was not a straightforward process.  The government decided that all pilot agreements should  became transitional agreements under articles 1 and 58 of the General Medical Services and Personal Medical Services Transitional and Consequential Provisions Order 2004 (the "PMS Transitional Order 2004").  NHS commissioners and PMS practice were then required to negotiate contracts “with each other with a view to agreeing variations to the transitional agreement that will ensure that the terms of the transitional agreement comply with the National Health Service (Personal Medical Services Agreements) Regulations 2004 (“the PMS Regulations”).  However the final agreement between the parties was not required in all respects to follow the form agreement set out in the PMS Regulations.  All that was required was that NHS commissioners and PMS practices were not permitted to agree terms which were “contrary to” the PMS Regulations. 

 

 

3           How the NHS Act 2006 provides for the different types of GP practice contract.

 

3.1          Since contracts came in as the way in which the NHS commissioned services for general practice broadly 4 types of contracts emerged which can be held by GP practices, namely:

 

a)         General Medical Services Contracts;

 

b)         Personal Medical Services Agreements;

 

c)          Alternative Personal Medical Services Agreements; and

 

d)         Former pilot scheme agreements under the 1997 Act which have been continued under transitional provisions.

 

3.2          The form of some (but not all) of these contracts is set by Regulations made by the Secretary of State.  However, once the NHS commissioner and the practice have agreed the contract, the terms of the agreement take effect as a normal commercial contract between the parties:  see Tomkins v Knowsley Primary Care Trust [2010] EWHC 1194 (QB) per Hickinbottom J at paragraph 5.

 

3.3          Section 83(1) of the NHS Act provides that the NHS Commissioning Board (known as “NHS England”)[2] is obliged to set up “arrangements” so as to provide primary medical services throughout England “to the extent that it considers necessary to meet all reasonable requirements”.   The statutory duty on NHS England is to put “arrangements” in place.  The way that NHS England discharges this duty in each area is to set up a series of contracts (either legally binding contracts or NHS contracts) with GP practices who agree to provide primary medical services to patients in that area.  Hence the legal duty on NHS England is not owed to individual patients.  NHS England is not under a duty to ensure that every person is registered with a GP practice.  The duty is, in law, a “target duty” to set up a sufficient number of arrangements with GP practices so as to ensure that the network of GPs meets the reasonable requirements of patients.  However NHS England also has duties to tackle health inequalities and so needs to have a variety of contracts in place so as to ensure that GP services are available for all members of the community.

 

4           Details of the different types of GP contracts.

 

4.1          There is no definition of “primary medical services” in the NHS Act but section 83(5) provides:

 

Regulations may provide that services of a prescribed description must, or must not, be regarded as primary medical services for the purposes of this Act”

 

4.2          Thus the definition as to what constitutes “primary medical services” is a matter to be set out in Regulations and accordingly could be changed by the making of new Regulations.  The services that a GP Practice is required to provide under GMS and PMS Regulations is described in detail in chapter 7 of the website.

 

4(a)  GMS Contracts.

 

4.3          Section 84 of the NHS Act provides that NHS England is entitled to deliver on this statutory duty under section 83 of arranging for the provision of primary medical services by entering into General Medical Services Contracts (“GMS contracts”).   The GMS contract is the only type of contract which is specifically referred to in the NHS Act and the legal structures around GMS Contracts are set out in the National Health Service (General Medical Services) Regulations 2004 (SI 2004/291) (“the GMS Regulations”). 

 

4.4          The original GMS regulations have been amended on many occasions since they were originally made, and thus it is necessary to refer to an up to date version of the GMS Regulations when addressing any issues relating to the GMS Regulations.  Substantial amendments to the GMS Regulations were made by the National Health Service (Primary Medical Services) (Miscellaneous Amendments and Transitional Provisions) Regulations 2013 which took effect from 1 April 2013.  For more details on the rights and obligations of GPs under GMS contracts please see the chapter on GMS Contracts.

 

4(b)  PMS agreements

 

4.5          Section 92 of the NHS Act permits NHS England to enter into “arrangements” for the delivery of primary care services which are not GMS contracts (and are not contracts entered into using the reserve power in section 83(2)).  However section 92(2) provides that any such agreement must be made in accordance with Regulations passed under section 94.  Although a PMS agreement can be a legally binding contract they are usually referred to as “agreements” rather than contracts because the default position is that a PMS agreement is an NHS contract rather than a legally binding contract.

 

4.6          Section 94 contains detailed provisions about how the Secretary of State is entitled to make Regulations for defining arrangements for the provision of primary care services (other than GMS contracts).  This was the power that was used by the Secretary of State to make the National Health Service (Personal Medical Services Agreements) Regulations 2004 (SI 2004/627) which defines how PMS agreements are to be set up and the contents of every PMS agreement (“the PMS Regulations”). 

 

4.7          The original PMS regulations have been amended on many occasions since they were originally made in 2004, and thus it is necessary to refer to an up to date version of the PMS Regulations when addressing any issues relating to the PMS Regulations.    Substantial amendments to the PMS Regulations were made by the National Health Service (Primary Medical Services) (Miscellaneous Amendments and Transitional Provisions) Regulations 2013 which took effect from 1 April 2013.  However the NHS commissioner and the GP practice still have a measure of freedom to negotiate specific terms in a PMS agreement and are not tied to a nationally agreed form of model agreement.  The terms of PMS agreements are not are negotiated on a national basis between the Department of Health and the General Practitioners Committee of the British Medical Association but Schedule 6 to the National Health Service (Personal Medical Services Agreements) Regulations 2004 provides that a very long list of l terms are required to be included in every PMS agreement, which are very substantially the same terms as are required to be included in a GMS contract. 

 

4.8          An important feature of PMS agreements is that any GP practice which operates under a PMS agreement has the right to terminate the PMS agreement and insist on having a GMS contract in its place:  see Regulation 19 of the PMS Regulations.

 

4(c)  APMS agreements.

 

4.9          NHS England has been given a wide power under section 83(2) of the NHS Act[3] to enter into different types of arrangements to provide primary medical services with anyone it considers fit and on such terms as it considers fit as follows:

 

The Board may (in addition to any other power conferred on it) make such arrangements for the provision of primary medical services as it considers appropriate; and it may, in particular, make contractual arrangements with any person”

 

4.10       The power under section 83(2) would theoretically enable NHS England to enter into a contract with anyone to provide primary medical services.  There is no specific requirement under section 83(2) that that the person who contracts to provide services has to be a registered general practitioner or even a doctor, although the services for patients would need to provided by registered doctors in order not breach the terms of the Medical Act 1983 and to comply with the NHS (Performers List) (England) Regulations 2013.  Unlike GMS and PMS agreements, the terms of a section 83 any contract, including the payment terms, are not set out in Regulations but are left to be agreed between NHS England and the contractor. 

 

4.11       This power was previously available to primary care trusts.  However the Secretary of State introduced a series of Directions which permitted the power to be used to set up alternative forms of contract with GP practices which were called “Alternative Personal Medical Contracts” (“APMS”) which introduced additional flexibilities which could be agreed locally to the arrangements set out in PMS agreements.  The power for the Secretary of State to issue Directions to NHS England is now in section 98A(1) of the NHS Act which provides:

 

The Secretary of State may direct the Board to exercise any of the Secretary of State's functions relating to the provision of primary medical services”

 

4.12       The Secretary of State has used this power to make the Alternative Provider  Medical Service Directions 2013.  Paragraph 6 of those Directions refers to a large number of GMS contractual terms that are required to be inserted into an APMS agreement.

 

4(d)  The present status of former 1997 pilot scheme contracts (as varied in 2004).

 

4.13       There are a number of GP practices which signed up for “pilot agreements” under the NHS (Primary Care) Act 1997 which amended (to a greater or lesser extent) when they became permanent agreements in 2004.   The legal position with such contracts is not straightforward.  These pilot agreements started as pilot agreements under Part 1 of National Health Service (Primary Care) Act 1997.  The power to create pilot schemes under the National Health Service (Primary Care) Act 1997 was abolished by section 178 of the Health and Social Care (Community Health and Standards) Act 2003 with effect from 1 April 2004. 

 

4.14       However 1 month before the power to create new temporary pilot agreements was abolished, Part II of the 1997 Act was brought into effect.  Part II of the 1997 Act brought section 28C of the National Health Service Act 1977 Act into effect.  Section 28C brought in a power for NHS commissioners to create permanent PMS agreements.  Part II also included section 28E of the 1977 Act which the Secretary of State power to make Regulations about such agreements.  That was the power which was used by the Secretary of State to make the National Health Service (Personal Medical Services Agreements) Regulations 2004.

 

4.15       However pilot agreements were, of course, not PMS agreements made under the National Health Service (Personal Medical Services Agreements) Regulations 2004 because these agreements were concluded long before the 2004 Regulations came into effect.  Paragraph 58 of the General Medical Services and Personal Medical Services Transitional and Consequential Provisions Order 2004 provided that the pilot agreements which existed on 1 April 2004 would not cease to exist when the Part 1 of the 1997 Act was repealed but such agreements would be deemed to have been made under section 28C of the NHS Act 1977.

 

4.16       It follows that on 1 April 2004 any pilot agreement that was still in existence was deemed as a matter of law to have become an agreement which had been made under section 28C of the National Health Service Act 1977.  The General Medical Services and Personal Medical Services Transitional and Consequential Provisions Order 2004 could have required all NHS commissioners and GP practices to enter into new agreements which complied with the National Health Service (Personal Medical Services Agreements) Regulations 2004.  However the government did not take that course but instead article 59 of the Transitional and Consequential Provisions Order required commissioners and the GP practice to enter into “discussions with each other with a view to agreeing variations to the transitional agreement that will ensure that the terms of the transitional agreement comply with the Personal Medical Services Agreements Regulations”.  Hence the statutory duty was to enter discussions but the outcome of those discussions remained a matter for the parties.

 

4.17       Article 59(6) provided that “The parties to a transitional agreement may not agree (whether under this article or otherwise) any variation to the transitional agreement that would be contrary to the Personal Medical Services Agreements Regulations”.  However this provision only referred to variations.  If there were existing terms to a pilot agreement that did not follow the Personal Medical Services Agreements Regulations then it seems that there was no legal duty on the commissioner and the GP practice to change the term to follow the Personal Medical Services Agreements Regulations.  There was a default position under article 59(3) if the parties did not agree variations by 30th September 2004 which required the PCT to issue a PMS Agreement to the practice which complied with the Personal Medical Services Agreements Regulations.

 

4.18       In 2004 it appears that some PCTs issued entirely new PMS agreements in a form that complied with the Personal Medical Services Agreements Regulations.  However other pilot agreements were varied in a form which did not fully comply with the Personal Medical Services Agreements Regulations because, for example, all of the detailed terms in schedule 6 were not included in the new agreements.  It seems probable that these informal agreements remain lawful agreements (because they were deemed to be made under section 28C).  A difficult legal problem arises if the GP practice and the PCT signed variations to the pilot agreement which were not contrary to Personal Medical Services Agreements Regulations and thus breached article 59(6) of the Transitional and Consequential Provisions Order.  However even in that case the private law obligations of the parties were probably as set out in the documents as varied.   Agreeing terms which were contrary to Personal Medical Services Agreements Regulations may have been a breach of the Transitional Provisions Order but that would probably be classified as a public law wrong and thus would not necessarily affect the contractual rights of the parties.  It is probably far too late now for either party to attempt to litigate any such complaint.  The above analysis lay behind the decision in the Court of Appeal in Pitalia & Anor v The National Health Service Commissioning Board [2014] EWCA Civ 474.

 

5           The Legal relationship between the parties to a GP contract and the NHS

 

5.1          The vast majority of GPs are not employees of an NHS organisation despite the fact that GPs are entitled to become members of the NHS pension scheme (a feature normally limited to employees of an organisation).  This is clearly stated in clause 2.1.1 of the standard form 2013 GMS contract[4] which provides:

 

“The Contract is a contract for the provision of services. The Contractor is an independent provider of services and is not an employee, partner or agent of the Board. The Contractor must not represent or conduct its activities so as to give the impression that it is the employee, partner or agent of the Board”

 

5.2          The same position arises under Personal Medical Services (“PMS”) agreements and APMS agreements.  There were a small number of GP practices which were previously managed directly by PCTs but these have been transferred to contract status over the past few years as part of the “Transforming Community Services” programme (under which PCTs became purely commissioners and transferred their providing functions off to other organisations).  However many GPs are salaried employees of the organisation which holds the practice contract, or employees of the individual GP in the case of a sole practitioner. 

 

5.3          The legal relationship between a GP practice and the NHS commissioner is accordingly defined by the terms of the practice contract which exists between the parties.  For most purposes, the fact that the terms of the contract may be defined by Regulations does not prevent the contract operating and being interpreted by the courts as a normal commercial contract.  The contractual relationship between the GP practice and NHS England means that NHS England (and primary care trusts before 1 April 2012) do not owe GPs working in NHS practices a duty of care at common law and do not have direct responsibility for the conditions in which GPs work.

 

 

6           Legal relationships between a GP and a primary care practice.

 

6.1          GPs who work in general practice can hold one of the following relationships with the GP practice within which NHS services are delivered:

 

a)    In the cases of a sole practitioner, the GP owns the practice and is a self-employed professional;

 

b)    In the case of a GP equity partner in a partnership, the GP is a part owner of the practice and is in a contractual relationship with his or her fellow partners, the terms of which are defined by the partnership agreement;

 

c)     The GP may be a director and/or shareholder of the medical company which has entered into the practice contract with the NHS.  In this case the GP may be self-employed (in the case of a director) or may also be an employee of the medical company;

 

d)    The GP may be a “salaried partner” of a GP practice, which means that the GP is an employee of the partnership (as opposed to being a part owner of the practice) but is presented to the outside world as a partner and has some rights to become involved in partnership matters as defined in the contract of employment;

 

e)    The GP may be an employee of the GP practice or the company which holds the contract; or

 

f)     A GP may be a self-employed contractor who contracts with the GP practice to provide professional medical services to patients on either a regular or occasional basis (either arranged directly with the partnership or through an agency).  These doctors are often referred to as “locum GPs”.

 

6.2          However all of the legal relationships set out in the paragraph above are relationships between the GP and the practice.  None of these relationships (of themselves) create any direct legal relationship between the GP and the NHS commissioner.

 

7           The distinctions between NHS Contracts and legally binding contracts.

 

7.1          Arrangements between NHS bodies were traditionally regarded as “service level agreements” within the NHS, namely agreements between different parts of the same organisation which did not give rise to contractual obligations that either party could enforce in the courts.  If one party failed to comply with the terms of an agreement or required additional money in order to meet the costs of a commitment this was seen as a management problem to be resolved within the NHS.  If a compromise solution could not be negotiated between NHS bodies the Secretary of State undertook an adjudication and reached a decision which was binding on both NHS bodies that were parties to the service level agreement.  This process reduced the legal fees that NHS bodies were required to meet but it meant that commitments taken on by NHS bodies never had the same force as those which were subject to legal enforcement. 

 

7.2          This position was formalised by section 4 of the National Health Service and Community Care Act 1990 which defined the concept of an “NHS contract” as follows:

 

“...  an arrangement under which one health service body (“the acquirer”) arranges for the provision to it by another health service body (“the provider”) of goods or services which it reasonably requires for the purposes of its functions”

 

 

7.3          The principal feature of an NHS contract is that it does not give rise to legally enforceable rights by any person in the civil courts.  This was set out in section 4(3) of the 1990 Act (now in section 9(5) of the NHS Act) which provides:

 

Whether or not an arrangement which constitutes an NHS contract would, apart from this subsection, be a contract in law, it shall not be regarded for any purpose as giving rise to contractual rights or liabilities, but if any dispute arises with respect to such an arrangement, either party may refer the matter to the Secretary of State for determination under the following provisions of this section”

 

7.4          The 1990 Act contained a list of NHS bodies which were designated to be “health service bodies” for the purpose of section 4 of that Act.  At that stage GP practices were not included on the list and therefore could contract as a health service body.  However, at that stage, the arrangements between GP practices and the Secretary of State were set out in the statutory General Medical Services scheme.  In 1990 contracting was not the usual method for the NHS to procure primary care services from GPs.  In any event the relationship between NHS commissioners and GP practices was always somewhat different because GP practices were not “NHS bodies” and thus it was not seen by NHS management as just being a case of moving money (or obligations) from one NHS body to another.  However the relationship between GP practices and NHS managers has also usually not been an arms-length contractual relationship with both sides sticking to their legal rights, but more in the nature of a partnership.

 

7.5          The first “GP contracts” were the pilot scheme agreements introduced by the National Health Service (Primary Care) Act 1997.   The 1997 Act provided that both pilot scheme agreements and (later) permanent PMS agreements could treat GP practices as health service bodies for the purpose of section 4 of the 1990 Act and thus could be set up as NHS contracts (see for example section 22 of the 1997 act which brought section 28E of the 1977 Act into effect which provided that the PMS Regulations could provide that the contractor was to be a health service body).

 

7.6          The present position is that GP practices are entitled to enter into NHS contracts through a variety of provisions.  For GMS contracts, section 90(3) of the NHS Act provides:

 

Regulations may make provision for a person or persons entering into a general medical services contract to be regarded as a health service body for any purposes of section 9, in circumstances where he or they so elect”

 

7.7          This power (previously in the NHS Act 1977) has been used to make Regulation 10 of the National Health Service (General Medical Services Contracts) Regulations 2004 (“the GMS Regulations”) which provides:

 

(1)     Where a proposed contractor elects in a written notice served on the Board at any time prior to the contract being entered into to be regarded as a health service body for the purposes of section 4 of the 1990 Act, it shall be so regarded from the date on which the contract is entered into.

 

(2)     If, pursuant to paragraph (1) or (5), a contractor is to be regarded as a health service body, that fact shall not affect the nature of, or any rights or liabilities arising under, any other contract with a health service body entered into by a contractor before the date on which the contractor is to be so regarded”

 

7.8          Regulation 10(2) of the GMS Regulations provides that the fact that a party has elected to become an NHS body for a proposed GMS contact does not affect the nature of, or any rights or liabilities arising under, any other contract that the contractor may have been a party to before the date on which the contractor is to be so regarded. 

 

7.9          Once a GMS contractor who is an individual or a medical partnership has elected to become an NHS body, regulation 10(3) of the GMS Regulations provides that this status will continue notwithstanding any change in the individuals who become parties to the GMS contract.  Thus if a sole practitioner were to take on a partner under his GMS contract and then resign from the partnership, the new contractor will continue to be treated as an NHS body.

 

7.10       Regulation 10(4) of the GMS Regulations permits any contractor who wishes to change the contractor’s status to become an NHS body or to cease to be an NHS body shall be able to do so by serving notice on the Board.  Thus a legally binding contract can be changed to being an NHS contract at the election of a contractor and vice versa.  Regulation 10(4) provides:

 

A contractor may at any time request in writing a variation of the contract to include provision in or remove provision from the contract that the contract is an NHS contract, and if it does so—

 

(a)     the Board shall agree to the variation; and

 

(b)     the procedure in paragraph 104(1) of Schedule 6 shall apply

 

 

7.11       It follows that if a request is made by a GP practice to change the status of a GMS practice contract, the Board comes under a statutory duty to agree to the change in the status of the contract.  In the unlikely event that the Board refuses to fulfil that duty then the dispute can be enforced by an application to the Family Health Services Appeal Unit of the NHSLA (“the FHSAU”).  The reference to paragraph 104 is a reference to the requirement that a GMS contract is required to include a term that no amendment or variation shall have effect unless it is in writing and signed by or on behalf of the Board and the contractor.  In the case of a change of status the notice from the contractor would constitute evidence of the change.  However the change of status will not be legally effective until there has been a signed notice back from the Board confirming the change in status.

 

7.12       The date that the change in status takes effect is the date when the contract is varied (see Regulation 10(5)).  Thus the change in status occurs at the date when the Board provides a signed approval to the change in status and not the date when the contractor serves his notice. 

 

7.13       Regulation 10(6) provides that a contractor shall cease to be a health service body for the purposes of section 4 of the 1990 Act (now section 9 of the NHS Act) if the contract terminates.  Accordingly if NHS England has a claim against a contractor for something that has happened after the termination of a GMS contract, that claim has to litigated in the courts unless it comes within the exceptions in Regulation 10(7) which are fairly self-explanatory and are as follows:

 

Where a contractor ceases to be a health service body pursuant to—

 

(a)     paragraph (5) or (6), it shall continue to be regarded as a health service body for the purposes of being a party to any other NHS contract entered into after it became a health service body but before the date on which the contractor ceased to be a health service body (for which purpose it ceases to be such a body on the termination of that NHS contract);

 

(b)     paragraph (5), it shall, if it or [the Board] has referred any matter to the NHS dispute resolution procedure before it ceases to be a health service body, be bound by the determination of the adjudicator as if the dispute had been referred pursuant to paragraph 100 of Schedule 6;

 

(c)     paragraph (6), it shall continue to be regarded as a health service body for the purposes of the NHS dispute resolution procedure where that procedure has been commenced—

 

(i)     before the termination of the contract, or

 

(ii)     after the termination of the contract, whether in connection with or arising out of the termination of the contract or otherwise,

 

for which purposes it ceases to be such a body on the conclusion of that procedure”[5]

 

PMS Agreements and NHS contracts.

7.14       Section 92(3)(g) of the NHS Act provides that Regulations can be made for PMS agreements which permit “section 92 arrangements to be treated, in such circumstances and to such extent as may be prescribed, as health service bodies for the purposes of section 9”.  Thus the Secretary of State was given power to make Regulations to permit PMS agreements (which are a form of section 92 arrangements) to operate as NHS contracts.  That power was used to make Regulation 9 of the National Health Service (Personal Medical Services Agreements) Regulations 2004 (“the PMS Agreement Regulations[6]) which sets out the PMS scheme for creating NHS contracts.

 

7.15       Regulation 9(1) of the PMS Agreements Regulations provides:

 

A contractor shall be regarded as a health service body for the purposes of section 4 of the 1990 Act[7] from the date that it makes an agreement unless—

 

(a)     in the case of an agreement with a single individual or qualifying body, that individual or body; or

 

(b)     in the case of any other agreement, any of the proposed parties to the agreement (other than [the Board]),

 

objects in a written notice served on [the Board] at any time prior to the agreement being made

 

7.16       PMS agreements are different from GMS contracts because a PMS agreement is presumed to be an NHS contract unless the contractor makes an election not to be a health service body and thus elects to have a legally binding contract.  The position is the reverse for a GMS contract.  Regulation 10 of the PMS Regulations provides that the PMS agreement must state that the contractor has the status of being a health service body.

 

7.17       Regulation 9(2) of the PMS Agreement Regulations provides:

 

Where a contractor is to be regarded as a health service body for the purposes of section 4 of the 1990 Act pursuant to paragraph (1), any change in the parties comprising the contractor shall not affect the health service body status of the contractor”

 

This provision ensures that a PMS agreement with a partnership shall not change from an NHS contract to a legally binding contract because of a change in the identity of the partners.

 

7.18       Regulation 10(4) of the PMS Agreement Regulations permits a PMS agreement or to switch a PMS agreement from being an NHS contract to being a legally binding contract or vice versa.  It provides:

 

A contractor may at any time request a variation of the agreement to include provision or remove provision from the agreement that the agreement is an NHS contract, and if it does so—

 

(a)     the Board shall agree to the variation; and

 

(b)     the procedure in paragraph 98(1) of Schedule 5 shall apply

 

7.19       Thus the contractor can change the status of the contract by making a request to NHS England to change the status of the agreement.  The Regulation does not require the request to be in writing but clearly a written request is preferable because this proves that the request was made by the contractor.  The reference to paragraph 98(1) of Schedule 5 of the PMS Agreement Regulations is a reference to the requirement to include a term in the PMS agreement that “no amendment or variation shall have effect unless it is in writing and signed by or on behalf of the Board and the contractor”.  It follows that if a contractor makes a request to change the status of a PMS agreement, NHS England are required to serve a signed notice on the contractor agreeing to the change of the status of the contract.  However the change will not take effect until the contractor also signs a document (which could in some circumstances be the original request) confirming the change in the contract status.  The date of the change is confirmed in Regulation 9(6) of the PMS Agreement Regulations which provides:

 

If, pursuant to paragraph (4), the Board agrees to the variation of the agreement so as to include a provision in the agreement that the agreement is an NHS contract, the contractor shall be regarded as a health service body for the purposes of section 4 of the 1990 Act from the date that the variation takes effect”

 

7.20       The provisions in the PMS Regulations about post termination matters, pre-existing matters at the date of transfer of status and existing disputes are set out in Regulation 9(7) of the PMS Agreement Regulations.  These provisions mirror those for GMS contracts which are set out above.

 

APMS Agreements and NHS contracts.

7.21       APMS agreements are contracts which are entered into by NHS England using the wide default powers in section 83 of the NHS Act.  There is no specific provision in the NHS Act which permits a person entering into an APMS agreement to become a “health service body” and therefore no direct route by which an APMS agreement can be treated as an NHS contract.  However:

 

a)         An APMS agreement could be treated as an NHS contract if the person providing the GP practice is a body of a type set out in section 9(4) of the NHS Act[8];

 

b)         An APMS agreement could be treated as an NHS contract if the person providing the GP practice is already party to another NHS contract.  Thus if a medical company runs multiple GP practices under a variety of contracts, at least one of which is an NHS contract, a new APMS agreement can be treated as being an NHS contract because it is being entered into with a person who has the status of being a “health service body”; and

 

c)          Even if the contract takes effect as a legally binding contract, the terms of the contract can still require (or permit) the contractor to use the NHS Disputes Resolution process, and thus refer disputes to the FHSAU.  If the APMS agreement requires disputes between the contractor and the NHS commissioner to be referred to the FHSAU, the term is likely to be regarded as an arbitration agreement for the purposes of the Arbitration Act 1996.  It follows that any contractor who commences court proceedings to resolve a dispute may face an application by the NHS commissioner for those proceedings to be stayed pending a referral to the FHSAU.  If the relevant term of the APMS agreement provides that contractor has an option to use the NHS Disputes Resolution process (as opposed to being obliged to do so) then it will be a matter for the GP practice to decide whether to resolve the dispute in the courts or using the FHSAU.

 

Former pilot scheme agreements.

7.22       Former pilot schemes were converted into permanent contracts by the General Medical Services and Personal Medical Services Transitional and Consequential Provisions Order 2004 which came into force on 1st April.   It provided that such contacts became permanent contracts as explained above.  Article 68 of that Order provided that if a GP practice has the status of being a health service body under a pilot agreement, that status continued under he deemed permanent contract.  Accordingly, unless the GP practice changed its status as a result of the variations to the contract which needed to be agreed under article 59, the GP practice remained as a Health service body and therefore will be deemed to be operating under an NHS contract.

 

7.23       However there was no specific provision in the General Medical Services and Personal Medical Services Transitional and Consequential Provisions Order 2004 (“the TCPO”) which permitted a GP practice which operated under a former pilot scheme agreement to change the status of the practice contract from being an NHS contract to being a legally binding contract.   It is possible that a “right to change” was included in the contract that was awarded under article 59 of the TCPO to follow the rights set out in a standard PMS agreement but, in the absence of such a contractual right, the contractor cannot unilaterally change the status. 

 

7.24       However there would appear to be nothing to prevent an NHS commissioner and a GP practice from voluntarily agreeing between themselves that the status of the contract should be changed but the GP practice does not appear to have a statutory right to require a change of status.

 

The differences between an NHS contract and a legally binding contract

7.25       The main differences between litigating in the courts and litigating in the NHSLA are as follows:

 

a.          The main advantage of an NHS contract is that the contactor cannot be sued in the civil courts by a government body, NHS England, with all of the cost implications associated with such a court case.  The main disadvantage of an NHS contract is that contactor cannot sue for their rights in the civil courts;

 

b.          The NHSLA is a specialist tribunal which deals with NHS disputes all the time.  It has great expertise and is likely to get to a result which accords with the regulations in a far shorter time than a civil court case would take.  It is also likely to apply far more expertise in getting to the result than a civil judge who may never have come across these types of contract before;

 

c.           The NHSLA will generally decide matters on paper without a hearing.  This reduces costs but can be unsatisfactory if there are substantial disputes of fact that need to be resolved between the contractor and the NHS body before a decision can be reached.  There are facilities for the NHSLA to hold hearing and make decisions on disputed points of fact but this power is rarely used;

 

d.          The NHSLA procedures often operate with parties not being legally represented but, if a party does engage lawyers, the determination does not generally result in any order for costs payable by either side.  Thus a winning party who engages lawyers cannot get an order for the other side to pay their legal costs; and

 

e.          If the NHSLA get the law wrong there is no appeal.  However either side is entitled to apply for judicial review of the decision of the NHSLA.  For an example of this in a case that went to the Court of Appeal see R (on the application of Hussain & Ors) v Secretary of State for the Health Department & Anor.  There may be an argument that a decision of the NHSLA about the terms of a GP practice contract does not have a sufficient public law element to be appropriate for a Judicial Review application.  If that were to be the case on an individual set of facts, the determination of the FHSAU would probably be classified as an arbitration determination.  In that case any challenge to that decision could only be made by way of the more limited rights under the Arbitration Act 1996.  That argument was successful in the unreported case of Pitalia v Central Lancashire PCT[9] but was rejected by the High Court at first instance in the case of R (Hussain) v Secretary of State for Health and others.  The decision of Cranston J must be of limited authority because his decision in Hussain was overturned by the Court of Appeal on other grounds.  The Pitalia v NHS England case was the subject of an appeal to the Court of Appeal where the court decided that the contract between the doctors and the NHS commissioners was always an NHS contract and so gave rise to no legally enforceable rights in the courts.  However the Court expressed its doubts as to whether the contract did give rise to an arbitration clause.

 

8           Resolving disputes before a primary care contract is signed.

 

8.1          It is rare for parties who are negotiating for a commercial agreement to acquire legal rights or obligations before a contract is concluded.  The usual position is that the parties negotiate and, if they reach an agreement on all terms of a proposed contract, the terms are set out in the final contract which both parties sign.  However if the negotiations do not lead to the parties reaching on all terms of a proposed contract, both parties walk away from the negotiating table.  Neither party is usually under an obligation to continue negotiating or is obliged to accept terms imposed by a third party.   The position is very different in negotiations for a GP practice contract between NHS commissioners and proposed providers.

 

8.2          If an NHS commissioners and a proposed provider are in in the course of negotiations intending to lead to a contract but cannot agree a term, either party can refer the dispute to the FHSAU which can make a determination on the dispute.  However once the FHSAU have adjudicated the outcome is only binding on the NHS commissioner.  The GP practice can still refuse to sign the contract with that term included.

 

8.3          For GMS contracts the pre-contract dispute resolution process is set out in regulation 9 of the GMS contract Regulations which provides:

 

(1)     Except where both parties to the prospective contract are health service bodies (in which case section 4(4) of the 1990 Act (NHS contracts) applies), if, in the course of negotiations intending to lead to a contract, the prospective parties to that contract are unable to agree on a particular term of the contract, either party may refer the dispute to the Secretary of State to consider and determine the matter.

 

(2)     Disputes referred to the Secretary of State in accordance with paragraph (1), or section 4(4) of the 1990 Act, shall be considered and determined in accordance with the provisions of paragraphs 101(3) to (14) and 102(1) of Schedule 6, and paragraph (3) (where it applies) of this regulation.

 

(3)     In the case of a dispute referred to the Secretary of State under paragraph (1), the determination—

 

(a)     may specify terms to be included in the proposed contract;

 

(b)     may require the Board to proceed with the proposed contract, but may not require the proposed contractor to proceed with the proposed contract; and

 

(c)     shall be binding upon the prospective parties to the contract

 

8.4          The resolution of disputes before the GMS contract commences accordingly operates in the following way:

 

a)    The parties must be “in the course of negotiations intending to lead to a contract” before the Regulation applies.  This appears to assume that, at the very least, both parties wish the contract to happen even if the terms cannot be agreed.  If a contractor has made a request for a contract which NHS England has not agreed to provide it seems probable that no right arises to refer the case to the FHSAU for determination;

 

b)    If the parties (i.e. NHS England and the proposed contractor) cannot agree a term of the proposed contract, either NHS England or the proposed contractor can refer the dispute to the FHSAU to determine;

 

c)     Once the FHSAU has reached its decision, that decision is binding on NHS England but is not binding on the contactor unless the contractor (possibly unless the contractor is already an NHS body in which case the decision is binding as a result of section 9(10) of the NHS Act).  In practice the contractor has the choice at that stage of accepting the contract on the terms set by the FHSAU or walking away from the agreement (unless NHS England come up with an offer of other acceptable terms).

 

8.5          The same scheme for the resolution of disputes before a contract is signed is set out at Regulation 8 of the PMS Agreement Regulations.  There is no right if the parties are negotiating for an APMS agreement because there are no Regulations which govern the terms of such contracts.

 

8.6          There is an unresolved legal problem with this procedure because it appears to assume that NHS England is in the process of negotiating with a single prospective supplier of GP services.  That approach sits somewhat uncomfortably with the duty on NHS England to tender all GP contracts under the National Health Service (Procurement, Patient Choice and Competition) (No. 2) Regulations 2013 (“the NHS Procurement Regulations”) which came into force on 1st April 2013.  It is difficult to see many circumstances in which NHS England would be entitled to enter into negotiations with a prospective contractor (after a selection of that contactor through a procurement process) without the negotiation process prejudicing the rights of the other potential contractors who took part in the competitive process but were unsuccessful.   However this is something that will need to be worked out in litigation as the meaning of the NHS Procurement Regulations becomes clear but at present there appears to be a fairly stark contradiction between the 2 sets of Regulations.

 

9           The NHS Disputes Resolution Procedure. 

 

9.1          Disputes between parties to an NHS Contract are required to be adjudicated upon by the Secretary of State (see section 9(6) of the NHS Act).  The Secretary of State has delegated the discharge of this function to the National Health Service Litigation Authority which delivers this service through the Family Health Services Appeal Unit (FHSAU).

 

9.2          The FHSAU have published Guidance concerning the procedures they will use to resolve disputes and also publish all determinations on their website.   

 

10        Variation and updating of GMS and PMS agreements.

 

10.1       When an NHS General Practice enters into a GMS or a PMS agreement, the contractors signs a large paper document which records the terms of the agreement between the parties.   The first of these contracts were awarded in 2004 when the GMS and PMS Regulations came into effect.  Those original GMS contracts contained the following term as clause 529:

 

“Subject to Part 10 of the Contract (opts outs of additional and out of hours services), clauses 86, 87, 377, 378, 386 and 407, and this Part (variation and termination of the Contract), no amendment or variation shall have effect unless it is in writing and signed by or on behalf of the PCT and the Contractor”

 

10.2       A first reading of this paragraph might have suggested that no changes to the GMS or PMS contact could be imposed on the GP contactor unless the contactor agreed.  However the contractual term that no changes to the terms of the agreement could made unless both parties signed a variation agreement was qualified by the words “subject .. to this Part” of the contract.  That wording was necessary because paragraph 104 of Schedule 6 to the GMS Regulations introduced a power which enabled primary care trusts (and now NHS England) to vary the terms of a contract without any requirement that the contractor agreed to the changes proposed by the PCT.   All that was needed was that the PCT (now NHS England) should be:

 

“reasonably satisfied that it is necessary to vary the contract so as to comply with the Act[10], any regulations made under pursuant to that Act, or any direction given by the Secretary of State pursuant to that Act”.

 

10.3       Paragraph 104(2)(b) of Schedule 6 of the GMS contract Regulations thus required the contract to have a term which formerly enabled PCTs and now enables NHS England to change the contractual terms if the NHS commissioners thought that a change was necessary to bring the terms of the contract into line with any Regulations or Directions made by the Secretary of State. 

 

10.4       Where an NHS commissioner takes that step, the change to the terms of the contract between the GP practice and the NHS commissioner take effect when a notice is served by the NHS body (originally the PCT and now NHS England) on the contractor.

 

10.5       A like provision was included in paragraph 98 of Schedule 5 to the PMS Regulations[11] which requires all PMS agreements to have a term with the same wording.  There are no Regulations affecting APMS agreements or former pilot scheme contracts.  It follows that those contracts can only be varied to bring them in line with any directions issued by the Secretary of State if the terms of such a contract includes a provision which is modelled on a GMS or PMS agreement.

 

10.6       The power for the NHS body to change the terms of the contract to reflect a change to the Regulations or directions made by the Secretary of State appeared in the original 2004 version of the GMS contract at clauses 530 and 531 which provided:

 

“530:  In addition to the specific provision made in clauses Error! Reference source not found., Error! Reference source not found. and Error! Reference source not found., the PCT may vary the Contract without the Contractor’s consent so as to comply with the Act, any regulations made pursuant to that Act, or any direction given by the Secretary of State pursuant to that Act where it-

 

530.1   is reasonably satisfied that it is necessary to vary the Contract in order so to comply; and

 

530.2   notifies the Contractor in writing of the wording of the proposed variation and the date upon which that variation is to take effect.

 

531. Where it is reasonably practicable to do so, the date that the proposed variation is to take effect shall be not less than 14 days after the date on which the notice under clause Error! Reference source not found. is served on the Contractor”

 

10.7       These same clauses now appear as clause 26.1 of the 2013 standard GMS contract[12].  There is no “standard” PMS agreement but the PMS Regulations require the same type of term to be included and thus, in practice, an identical form of words is lifted from the GMS standard contract and included in all PMS agreements.

 

10.8       This power has been used by primary care trusts (and is now used by NHS England) to bring the contractual terms of both GMS and PMS agreements between primary care trusts (and now NHS England) and GP practice up to date following changes to the relevant Regulations and to reflect any relevant Directions made by the Secretary of State. 

 

10.9       From time to time the Department of Health publishes updated versions of a “standard” GMS contract.  This document is used as a template by primary care organisations which are entering into new contracts with GMS providers.  However the standard document also reflects the current position under the GMS Regulations and any relevant Directions made by the Secretary of State, and thus (provided the requisite notices have been served on each GMS practice) probably reflects the present terms of the GMS contract between NHS England and the GP practice.  The changes to PMS Regulations tend to mirror those under the GMS scheme (but do not always do so).

 

10.10    It is therefore likely (as long as the relevant PCT passed on all the relevant contractual change notices to the practice as issued by the Department of Health) that the terms of the present standard contract between a GMS or PMS practice and NHS England consist of:

 

a)         The matters that were specifically agreed in the paper version of the GMS or PMS agreement as it was originally set up between the practice and the PCT (such as the name of the contracting parties, the location of GP premises and details of any enhanced services that were agreed to be provided in this particular case); and

 

b)         For all other purposes, the terms of the contract are likely (but not certain) to reflect the present version of the standard GMS contract published by the Department of Health which reflects the standard GMS arrangements, and will almost always reflect the changes to the PMS.

 

10.11    However the most reliable method to determine the present terms of a contract between a GP practice and NHS England (as all contracts are now held by NHS England) is to start with the paper document issued to the practice at the date that the contract was originally agreed and then work through every contract notice that has been served on the practice by the primary care trust and then NHS England in order to determine the present state of any particular clause.

 

10.12    The power for the Secretary of State to give directions to NHS England about its exercise of any functions relating to the provision of primary medical services is now contained in section 98A(3) of the NHS Act.  Accordingly NHS England has the contractual right to vary GMS and PMS agreements in accordance with directions given by the Secretary of State.  This is the power that could be used, for example, to change the hours which GPs are required to open their surgeries to move to 7 day working.

 

11        Changes to standard GP contracts which were brought into effect in April 2014.

 

11.1       Each year there are negotiations between the BMA General Practice Committee and the Department of Health, represented by “NHS Employers” to make changes to the terms of the GP contracts.  A significant number of changes were made to the standard GMS contracts with effect from April 2014.

 

11.2       These changes to GMS contracts are summarised in 2 documents.  The first is the GPC memorandum to its GP members, which can be accessed here.  The second is NHS England Guidance on the SFE and other directions which the Secretary of State made after the negotiations which can be accessed here

 

11.3       Changes to PMS and APMS agreements are summarised in a Guidance note from NHS England which can be accessed here.  Strictly these changes can only take place if PMS practices agree to the changes because a PMS agreement cannot be varied by Secretary of State direction in the same way a PMS agreement can be varied.  However that may be a theoretical legal right rather one which is exercised by many PMS practices.

 

12        Entire Agreement clauses and exclusion of prior representations clauses.

 

12.1       An “entire agreement” clause is a clause in a commercial contract which provides that all of the terms agreed between the parties are contained within the document.  Where such a clause is present it makes it difficult (if not impossible in most cases) for either party to alleged that the true agreement between the parties contained implied terms which added to or contradicted the express terms.  A clause to exclude reliance on pre-contract representations prevents either party to the contract from relying on something that was said or done prior to the contract being signed from relying on such a statement to give rise to enforceable rights.

 

12.2       These clauses not included in the mandatory list of clauses that GMS and PMS agreements are required to contain under the relevant Regulations.  However all of the standard GMS contracts have contained such clauses since the contracts were first drafted in 2004 and many PMS agreements contain such clauses.  Many APMS agreements also contain like terms which appear to have been lifted directly from the GMS model contract. 

 

12.3       The 2013 GMS standard form contract contains entire agreement and exclusion of representations clauses as follows:

 

“27.2.1. Subject to Part 11 (opts outs of additional and out of hours services), clauses 15.9.8 and 15.10.8 and any variations made in accordance with Part 26, this Contract constitutes the entire agreement between the parties with respect to its subject matter.

 

27.2.2. The Contract supersedes any prior agreements, negotiations, promises, conditions or representations, whether written or oral, and the parties confirm that they did not enter into the Contract on the basis of any representations that are not expressly incorporated into the Contract. However, nothing in this Contract purports to exclude liability on the part of either party for fraudulent misrepresentation”

 

 

12.4       The effect on an entire agreement clause was considered by Lightman J in Inntrepreneur Pub Company Ltd v East Crown Ltd [2000] 2 Lloyds Rep 611.  At paragraph 7 the Judge said:

 

“The purpose of an entire agreement clause is to preclude a party to a written agreement from threshing through the undergrowth and finding in the course of negotiations some (chance) remark or statement (often long forgotten or difficult to recall or explain) on which to found a claim such as the present to the existence of a collateral warranty. The entire agreement clause obviates the occasion for any such search and the peril to the contracting parties posed by the need which may arise in its absence to conduct such a search. For such a clause constitutes a binding agreement between the parties that the full contractual terms are to be found in the document containing the clause and not elsewhere, and that accordingly any promises or assurances made in the course of the negotiations (which in the absence of such a clause might have effect as a collateral warranty) shall have no contractual force, save insofar as they are reflected and given effect in that document. The operation of the clause is not to render evidence of the collateral warranty inadmissible in evidence as is suggested in Chitty on Contract 28th ed. Vol 1 para 12–102: it is to denude what would otherwise constitute a collateral warranty of legal effect”

 

 

12.5       The effect of entire agreement clauses were also considered in Deepak Fertilisers & Petrochemicals Ltd v Davy McKee (London) Ltd and another [1999] 1 All ER (Comm) 69.  The above analysis was recently approved by Gloster J in Ravennavi Spa v New Century Shipbuilding Company Ltd [2006] EWHC 733 (Comm) at paragraph 32ff.  This case was considered in the Court of Appeal in where Moore-Bick LJ in Ravennavi SpA v New Century Shipbuilding [2007] EWCA (Civ) 58; [2007] 2 Lloyd's Rep 24.  In the latter case the buyer attempted to argue that the contractual force of the entire agreement clause should be diminished because it was a “boilerplate clause”.  This submission was rejected by Moore-Bick LJ at paragraph 25 as follows:

 

“The effect of an entire agreement clause of the kind to be found in Article XIX.4 of the two formal shipbuilding contracts executed in this case must depend primarily on its terms, since it is the language chosen by the parties to express their agreement (wherever it appears) which, construed in its proper context, provides the primary source of their intentions. It is for that reason that I am unable to accept the suggestion in the Buyer's skeleton argument that clauses of this kind can be construed by reference to their supposed purpose or that their significance is diminished if they are found among what are sometimes called the "boilerplate" provisions of a formal contract of this kind. There may be circumstances, of course, in which the court can be satisfied that a clause of that kind, although apparently couched in language wide enough to encompass the particular matter on which one or other party seeks to rely, was not intended by the parties to operate in the way in which its terms would suggest, but any such conclusion must be borne out by the particular circumstances of the case”

 

12.6       The standard form GMS contract not only includes an entire agreement clause but also a clause which provides that the terms of the Agreement superseded any “prior agreements, negotiations, promises, conditions or representations”.   Hence, other than in a case of fraud, neither party ought to be able to rely on anything that was said prior to the contract being signed to change the terms of legal obligations between the parties.

 

12.7       There are, however, some limitations to the extent to which an entire agreement clause can be relied upon if the evidence shows that the GMS contract did not contain all of the terms which had been agreed by the parties and was not intended to contain all such terms.  See for example Tomkins v Knowsley Primary Care Trust[13].  In such a cases, depending on the precise evidence in the case, the courts may give effect to parallel agreements which exist alongside the formal GMS contract.  These are however very important in cases where a PMS agreement has an entire agreement clause and either the contractor or NHS England wishes to argue that the terms should be amended to reflect changes in the GMS terms.  For more details please see chapter 10.

 

13        Third party Rights under GP practice contracts.

 

13.1       Prior to 1999, save in highly unusual circumstances, legally enforceable contracts only gave legally enforceable rights to the parties to the contract.  Rights under contracts are “private law rights” which are enforceable in the normal civil courts.  Private law rights need to be distinguished from “public law rights”, the latter of which can only be enforced against a public body by way of Judicial Review[14]

 

13.2       The legal theory was that a contract between A and B gave rights to A and B alone and that a person but, unless the contract specifically provided that enforceable rights were to be acquired by a person other than A and B, no one else got any rights.  This was changed by the Contracts (Rights of Third Parties) Act 1999[15].  However section 1(2) of the 1999 Act permitted the parties to a contract to exclude the rights of third parties by an express term of the contract.

 

13.3       Paragraph 126 of Schedule 3 to the GMS Regulations provided that a term was required to be included in a GMS contract to provide that the contract did not create any enforceable right by any person who was not a party to the contract.  This is now contained in clause 2.1.3 of the standard form 2013 GMS contract.  This clause will mean that third parties, and in particular patients of the practice, cannot acquire additional private law enforceable rights by seeking to rely on the terms of a GMS contract.  The same position arises under PMS agreements as a result of paragraph 115 of Schedule 5 to the PMS Regulations[16].

 

13.4       There is no express regulatory provision to require third party rights to be excluded in either an APMS agreement or in a former pilot agreement.  If a term has not been included in the contract excluding the terms of the 1999 Act it seems likely that a patient could assert contractual rights under that contract.  Hence if, for example, a patient who was registered at an APMS GP practice found that the practice was not complying with its contractual provision to open during core hours, the patient may be able to go to court to seek an order under the 1999 Act to force the GP practice to comply with its contract by opening for the full core hours.



[1] There is a wealth of literature on the history of NHS funding but for a summary please see http://www.publications.parliament.uk/pa/cm200910/cmselect/cmhealth/268/26805.htm

[2] This statutory duty was previously placed on Primary Care Trusts but following their abolition in April 2013 the duty transferred to NHS England.

[3] This power was originally created by section 16CC of the NHS Act 1977 which was introduced by section 174 of the Health and Social Care (Community Health and Standards) Act 2003.  The terms of the power were (amended by the Health and Social Care Act 2012.

[5] This power was originally in section 28E of the 1977 Act as brought in by the NHS (Primary Care) Act 1997.

[6] SI 2004/627.

[7] Although the present form of the Regulations refers to section 4 of the 1990 Act which has now been repealed and has been replaced by section 9 of the NHS Act 2006, this must be taken as a reference to the section 9 of the NHS Act because the NHS Act is a consolidating Act of Parliament:  see section 17(2) of the Interpretation Act 1978.

[8] This is a list of NHS bodies which includes a CCG and an NHS Trust but does not include NHS Foundation Trusts.

[10] This was originally a reference to the NHS Act 1977 and is now a reference to the NHS Act 2006.  See section 17(2) of the Interpretation Act 1978.

[11] 2004 SI 627.

[14] See the section of this Guide on the different legal roles undertaken by General Practitioners for an explanation of the difference between public and private law rights.

[16] The PMS Regulations are the National Health Service (Personal Medical Services Agreements) Regulations 2004 SI 2004/627 which came into force on 1st April 2004. 

David Lock QC

David Lock QC is a barrister at the Landmark Chambers.

180 Fleet Street
London, EC4A 2HG
DX 1042 (London)

He was called to the Bar in 1985 and was appointed Queens Counsel in 2011.

David Lock QC is Head of the Administrative & Public Law Group and the Judicial Review & high Court Challenges Group at No5 Chambers. - See more at: http://www.no5.com/barristers/barrister-details/137-david-lock-qc/#sthash.PcnGl1Eh.dpuf

Email This email address is being protected from spambots. You need JavaScript enabled to view it.