Judge’s innovative ruling against Lancs County Council recognises that privatisation of one service threatens whole local NHS

Could it be that the tide is starting to turn against the fragmentation of the NHS  by cuts and privatisation – which is the real agenda of Accountable Care, now rebranded as Integrated Care?

Recently in the courts, a judge has made an innovative ruling against Lancashire County Council based on a point about the integrity of NHS services, that he says has not been considered judicially before, as far as he knows.

The problem is that this is ONLY a judgement that refuses an application to lift a temporary suspension of  a  contract the Council has awarded Virgin  PENDING a full hearing in April of 2 NHS Trusts’ legal challenge to the award of the contract.

But it is very useful on setting out the points about the damage to local NHS services as a whole from privatising individual services

Cutting through the legalese, the Judge’s ruling is about what would happen if he were to lift the suspension now. IF he lifted it, then the loss to the 2 NHS Trusts would be enormous, and irremediable really.

His ruling says that paying damages to the 2 NHS Trusts that have challenged the lawfulness of Lancashire County Council’s award of a £100m children’s service contract to Virgin Care would not make up for “the disruption and damage to the provision of the whole range of healthcare” that pulling the children’s services brick out of the whole NHS building would cause.

This ruling recognises that the NHS stands or falls on the basis of providing the whole range of healthcare.

It also points out that this disruption and damage  was not adequately factored in by the council in deciding to award the contract to Virgin Care.

In contrast, the Judge found that, if at the FULL hearing in April, the Council is  deemed right to have given the children’s services contract to Virgin, the Council could EASILY be compensated in damages for the extra wait due to the automatic suspension of the contract with Virgin.

The judge’s written ruling, published in February, is a detailed explanation of his refusal of Lancashire County Council’s application to lift an automatic suspension of the award of a £100m children’s services contract.

This automatic suspension kicked in as a result of a legal case brought to the court by the two NHS Foundation Trusts in Lancashire that currently hold the contract. They claim that Lancashire County Council failed to apply rules governing the award of public contracts. They also claimed the decision would cost them more than £2m and result in 160 staff losing their jobs.

The judge’s ruling is based on a point about whether whether damages would be an adequate remedy to the harm suffered by the 2 NHS Trusts that have challenged the lawfulness of the Council’s decision to transfer the children’s health services from them to Virgin Care. The judge has concluded that damages would be inadequate because:

“The impact upon the provision of healthcare as a whole to those in the catchment areas of the two Trusts is said to be considerable and I accept that.”

On the morning of 25 January 2018, the judge heard Lancashire County Council’s application to lift the automatic suspension of the Virgin Care childrens’ services contract that resulted from the NHS Trusts’ legal challenge to the Council. He gave an oral ruling to the parties that afternoon.

The judge’s more detailed written ruling is interesting and it’s a new take on outsourcing /privatisation being ‘disruptive’ with negative effects on the whole NHS service.

For the NHS Trusts, losing the children’s services would  mean significant turnover in the staff supporting these patients, many of whom are also involved in other services.

The ruling against Lancashire came weeks after  Surrey NHS Commissioners made an undisclosed out of court settlement to Virgin Care, which had planned to go to court to challenge the award of  the Surrey children’s services contract to the NHS.

In this context, it is interesting that the judge’s written ruling says

“There is one point in particular that has not, so far as I am aware, been considered before judicially and that is the point at [19] below.”

Point 19 turns out to be about a legal precedent that says that a claimant (in this case the 2 NHS Trusts) doesn’t have an automatic right to damages in respect of the harm it suffers as a result of the lifting of an automatic suspension – although it must be legitimate that the claimant is left with an effective remedy.

The Judge says this applies to the current case and that

“the issue of whether damages will be an adequate remedy remains a central part, in my judgment, of the task upon which the court is engaged on an application such as this one.”

The Judge’s analysis starts at point 38 and includes the info that

“The Trusts argue that damages in their cases would not be an adequate remedy, and indeed in all the circumstances would be what Mr Williams their counsel described as a ‘weak remedy’.”

Point 39 is the clincher in terms of the new point that has not been considered before judicially:

In my judgment, the fact that the incumbent providers of the Services are NHS Trusts is an important factor.

Any incumbent provider of any service who is then unsuccessful in a procurement competition for those services will face inevitable reorganisation of its business as a result of that lack of success. Such reorganisation will (very often but not invariably) involve redundancies.

However, here, the reorganisation is not just to the staff, or even in relation to the provision of Services to children. The evidence served for the Trusts makes it clear that the Trusts only recently restructured their operations to deliver these Services, and if they lose the procurement the Trusts will have significantly to restructure their operations a second time.

This is a restructuring of delivery of healthcare across the population, and what are called “pathways” which are delivery routes through which healthcare is supplied.

In addition to the cost and disruption that will cause – which I find would be considerable — the loss of the Contract will make it more difficult for the Trusts to deliver other similar public services which they are contracted to deliver, and these will require new pathways to care to be developed.

All of this reorganisation is different to the staff situation, which in a sense is inevitable (or to put it another way, is an inevitable consequence for any incumbent bidder of having lost the bid).

The impact upon the provision of healthcare as a whole to those in the catchment areas of the two Trusts is said to be considerable and I accept that.”

points 41 and 43 are further clinchers:

“I find that damages would not be an adequate remedy for the Trusts. This is the same result whether that question is considered first in isolation, or whether the same point is approached as an issue of the justness, in all the circumstances, of the Trusts being confined to their remedy of damages. The answer is one favourable to the Trusts on this application whichever way it is framed.”

And

“I consider the inadequacy of damages to the Trusts to be conclusive on this application.”

If this new ruling establishes a precedent – I’m not a lawyer, I don’t know – this looks really important.

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One comment

  1. Thanks for a very helpful explanation of the significance of this ruling. I read the whole ruling but was less able to understand its implications. Thanks again.

    Like

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