Brewster & Ors (t/a The Medical Practice, Stanley) v Tayside Primary Care NHS Trust & Ors For Judicial Review [2001] ScotCS 110 (10 May 2001)

BAILII is celebrating 24 years of free online access to the law! Would you consider making a contribution?
No donation is too small. If every visitor before 31 December gives just Â£5, it will have a significant impact on BAILII's ability to continue providing free access to the law.
Thank you very much for your support!

	[Home] [Databases] [World Law] [Multidatabase Search] [Help] [Feedback]
	Scottish Court of Session Decisions
You are here: BAILII >> Databases >> Scottish Court of Session Decisions >> Brewster & Ors (t/a The Medical Practice, Stanley) v Tayside Primary Care NHS Trust & Ors For Judicial Review [2001] ScotCS 110 (10 May 2001) URL: http://www.bailii.org/scot/cases/ScotCS/2001/110.html Cite as: [2001] ScotCS 110

[1] As a generality, under the National Health Service, primary care medical services are provided by general medical practitioners by arrangement with NHS Trusts and the dispensing of drugs prescribed by GPs is carried out by pharmacists. In terms of section 27 of the National Health Service (Scotland) Act 1978 (c. 29), the NHS Trusts, are required to make arrangements for the supply of drugs to patients in their areas. Section 28 provides that they are prohibited from making arrangements with GPs whereby the GPs themselves are required or agree to provide pharmaceutical services to their patients except in so far as these are permitted by Regulation (see also the earlier section 41 of the National Health Service (Scotland) Act 1947). The provisions do not prohibit GPs from dispensing drugs to their patients but, in the case of NHS patients, do, in effect, stop them from being paid for the drugs dispensed unless they are supplied in terms of the Regulations. Thus, whilst in cases of emergency under the National Health Service (General Medical Services) (Scotland) Regulations 1995 (SI 416), a GP may be able to recover the cost of drugs dispensed, he will not normally be able to do so otherwise.

[2] A general exception to the rules concerning payment is effectively made by regulation 34 of the 1995 Regulations. This provides:

In practice, this regulation has been used not so much to permit payment to a GP for the supply of drugs to a particular patient but to permit rural practices to dispense drugs to their patients generally even although many of them will be quite capable of making a trip to a suitable pharmacy in a nearby town.

[3] Section 28 of the 1978 Act provides that the general arrangements to be made in respect of the supply of drugs to NHS patients must be with registered pharmacists or pharmacy businesses. These arrangements involve a list, known as the "pharmaceutical list", of pharmacies authorised to dispense NHS drugs (see the National Health Service (Pharmaceutical Services)(Scotland) Regulations 1995 (SI 414), regulation 5). There can be competition for placement on this list and its contents are controlled by the local primary care trust usually in consultation with a pharmaceutical committee. A pharmacy will be put on the list if the trust is satisfied that :

[4] The payment of GPs is governed by "The Red Book" which is issued by the Scottish Executive and is formally entitled the "Statement of Fees and Allowances Payable to General Medical Practitioners in Scotland". Paragraph 44 of the Book deals with payments made to GPs who are dispensing drugs under regulation 34. This allows payment for the supply of drugs only in that situation. Claims for "dispensing payments" are dealt with in paragraph 72.3 and such payments may have a bearing upon a GP's superannuable remuneration (para. 77). Paragraph 80 (which is in a chapter headed "...Arrangements for Payment") provides:

In short, there is a form of appeal to the Secretary of State and now the Scottish Ministers.

[5] The petitioners are a GP practice which has its main surgery in the village of Stanley in Perthshire and two satellite surgeries in neighbouring Bankfoot and Luncarty. Ever since the inception of the NHS, the practice has been required under regulation 34 and its predecessors to dispense drugs to all of its patients. It would be difficult to categorise all, or perhaps even a majority, of the patients in terms of that regulation but the basis has historically been the absence of a pharmacy in any of the practice villages. Over the years, the requirement on the petitioners has come to be a lucrative burden which, I was rather surprised to be told, generated a profit (after deducting all the costs of dispensing) of some £150,000 per annum, of which £60,000 was attributable to the residents of Stanley.

[6] By application dated 27 July 1999, Goldenverve Limited, a company owned by the petitioners, applied for inclusion in the pharmaceutical list of the premises to be known as the "Stanley Pharmacy and Medical Centre". Shortly thereafter an application was made by W. Davidson & Sons Limited for such inclusion in respect of premises also in Stanley. These applications were considered by the Trust's Pharmacy Practices Committee on 26 November 1999. The Goldenverve application was refused and the Davidsons application was granted on or about 17 December 1999. Appeals against the decisions were heard by the National Appeals Panel on 26 July 2000. Within a few days, both appeals were refused. Both first instance and appellate hearings appear to have involved representations from the competing applicants. The Panel in the Goldenverve appeal considered that the "neighbourhood", for the purpose of the Regulations, was an area comprising Stanley and district in which were included Bankfoot and Luncarty. It was of the view that the existing GP dispensing did not provide the full range of pharmaceutical services, notably the absence of supervised methadone and needle exchange, over the counter medicines and no resident pharmacist. It did not serve people in the locality who were not patients of the petitioners' practice. The Panel noted that the Goldenverve application would serve only Stanley patients and not the Bankfoot and Luncarty areas where the petitioners wished to continue dispensing. On the other hand, the Davidson pharmacy would provide full pharmacy services to all in the neighbourhood. The decisions of the Panel are not under challenge and must therefore be regarded as final, i.e. that there will be (and now is) a pharmacy in Stanley on the pharmaceutical list.

The petitioners' response of 2 September did not resist the proposal to withdraw the requirement as regards Stanley. It requested that the discontinuance be limited to Stanley, or rather to an area within a two kilometre radius of the surgery. The basis for this request related primarily to the advantages which patients outwith that radius would derive from continuing to receive their drugs from the practice. It made no comment on an appropriate period of notice but a subsequent letter of 3 October did so. It asked for a three year period. It is not clear whether this last letter was before the Trust when it considered the discontinuance.

[8] On 13 October 2000, the Trust considered the matter along with a recommendation from Dr. Leadbitter, the Director of Primary Care who had been corresponding with the petitioners, to discontinue dispensing in relation to Stanley patients (i.e. those within the two kilometre radius) within six months and in relation to the rest of the practice's patients within two years. The Minutes reveal that various options were tabled and a discussion ensued after which the recommendation was, in broad terms, followed. On 16 October, this decision was communicated to the petitioners. Although a reference to Stanley village was substituted for the two kilometre radius, this was later clarified to mean the same thing. The effect of the decision is to end dispensing from the Stanley surgery from 16 April 2001.

[9] After the decision, in December and January it seems that the petitioners were considering their options and, in particular, an appeal in terms of paragraph 80 of the Red Book. However, no formal court action was taken until the present petition was raised on 10 April, since when there has been no delay attributable to the petitioners. Since October, however, Davidsons have been gearing up their shop on the assumption that it would be capable of dispensing to Stanley patients as from now. They have recruited a pharmacist who is due to start next month and who has moved home to do so. Some £45,000 has been spent to set up the shop which has running costs of some £55,000 per annum.

[10] The petitioners sought interim suspension of the decision dated 13 and communicated by letter of 16 October 2000 to discontinue the requirement to dispense. They maintained that they had a prima facie case. First it was said that the Trust were required to give reasons for the decision but had failed to do so. These reasons were required in terms of paragraph 80.1.2 of the Red Book, a contractual document, and in any event at common law. There was a legitimate expectation that reasons would be given standing the issues at stake. If, on the other hand, it could be said that some reason had been given then it was inadequate (Wordie Property Co. v Secretary of State for Scotland 1984 S.L.T. 345, LP (Emslie) at p. 347-8; Lord Cameron at p. 356; Safeway Stores v National Appeal Panel 1996 SC 37, Second Division (LJC Ross) at pp 40-41; Singh v Secretary of State for Scotland 2000 S.C. 219, First Division (Lord Weir) at 222-223; R v Devon County Council ex parte Baker [1995] 1 All ER 73, Simon-Brown LJ at p. 88). If any reasons were found then it indicated that the decision had been "irrational". In particular, there was no basis for the selection of the periods of notice or the geographical boundaries concerned.

[11] Secondly, the petitioners submitted that the decision ought to be capable of being appealed under paragraph 80 of the Red Book but that neither the Trust nor the Scottish Ministers agreed, despite an earlier acceptance by the Secretary of State of an almost identical appeal (Decision in the Appeal by Doctors Kirkwood and Urquhart, The Surgery, Bridge if Earn dated 16 May 1994). There was a legitimate expectation, standing that appeal and the terms of paragraph 80, that an appeal would be afforded.

[12] The balance of convenience favoured the petitioners because, if the decision were not suspended, they would have to cease dispensing from Stanley and thereby sustain a considerable loss of income pending a final decision. The status quo ought to be maintained meantime. Having stopped dispensing, if the petitioners succeeded then at that later stage it could be argued that no notice period was necessary. There would be considerable practical difficulties in recommencing dispensing. The long term viability of the practice could be affected by the loss of income.

[13] The Trust maintained that the petitioners had no right to dispense under the Regulations. Rather, it was an obligation. There was no obligation contained in the Regulations to give reasons. In any event, reasons had been given, namely the opening up of the Davidsons pharmacy in the locality. The periods of notice were not attacked as being unreasonable in themselves and were within the range of options open to the Trust, whose Board contained those with the knowledge, experience and skill to make the appropriate decisions relative to the extent of any phased withdrawal.

[14] Although there was an express right of appeal against a requirement being made, the statutory provisions did not provide for an equivalent appeal against a discontinuance. That would suggest that no right of appeal was intended. If there existed a contractual right under paragraph 80 of the Red Book then the petitioners should use it before taking judicial review proceedings. Furthermore if the right were a contractual one, as the petitioners maintained, they had to use it rather than proceed by this method of review (West v Secretary of State for Scotland 1992 SC 385). Rule 80.1.2 followed on from 80.1.1 and related to appeals relative to the denial of payment of claims and not to the discontinuance of a statutory requirement. The Trust had done and said nothing to provide the petitioners with any expectation of an appeal. Such an expectation cannot have been created in the minds of the petitioners by the admission by the Secretary of State of a previous appeal involving different parties.

[15] On the balance of convenience, the Court should be slow to grant an interdict against a public body attempting to carry out its statutory duty. Suspension of the decision would upset the whole decision making process and produce a period of uncertainty prior to any final decision. Although there were no tangible financial consequences to the Trust, it should be borne in mind that the petitioners were themselves intending to open up a pharmacy. They had also taken almost six months to raise proceedings and that should be taken into account.

[16] Davidsons essentially adopted the submissions of the Trust but expanded and reworked them. Regulation 34 imposed an obligation and not a right to dispense drugs. The right was normally invested in a listed pharmacy and GPs ought not to be dispensing medicines other than by way of exception (see the decision under the English legislation in R v North Staffordshire Health Authority ex parte Worthington, Schiemann LJ, 27 November (?1996). If there was no right to dispense then there was no obligation to give reasons. There was no general requirement to give reasons (see generally Stefan v General Medical Council [1998] 1 W.L.R. 1293 at 1300). Furthermore, in the absence of a practice or representation, there could be no legitimate expectation of being given reasons. In any event, reasons had been given and the decision was within the range of reasonable decisions open to the trust. Nothing had been said to the effect that they were unreasonable.

[17] The balance of convenience favoured not granting the interim orders given the steps to set up the business carried out by Davidsons and the services which they, as distinct from the petitioners, would provide to the community in the whole neighbourhood. The delay here would prompt a plea of mora, taciturnity and acquiescence and should weigh heavily in the balance.

[18] The Scottish Ministers did not make any substantive submissions on the issue of the interim orders. However, they did express the view that there was no appeal in respect of a discontinuance under regulation 34 using a route afforded by paragraph 80 of the Red Book. They took the view that the previous decision of the Secretary of State had been an error.

[19] It is not disputed that before I can pronounce the interim orders sought by the petitioners, I must first be satisfied that they have averred a prima facie which would merit reduction of the decisions complained of. In that regard, it is not for me to reach a concluded view on either the competency or the merits of the petition at this stage but simply to determine whether a colourable case has been made out. Secondly, I have to be satisfied that the balance of convenience is tilted in the petitioners favour. In that regard, I have to consider not only the interests of the petitioners but those of the public, in whose favour the relevant statutory bodies are presumably acting, and of the pharmacists who have set up shop in the locality.

[20] In relation to a prima facie case, the petitioners first plead that the decision in the letter dated 16 October to discontinue the requirement upon the petitioners to dispense drugs and to impose a timescale for that discontinuation is flawed because of the absence of adequate reasons being given for it. Although the various opposing parties maintained that there was no obligation upon the Trust to give reasons, I am satisfied that there is a prima facie case that reasons must be given in a case such as this where, despite the phraseology in the regulations, substantial patrimonial interests are involved and the decision maker is a public body such as the trust. Although regulation 34 refers to a requirement to dispense as if that were an obligation upon a GP, in practical terms, it is clear that because of its interconnection with the payment regime, over the years, the requirement has been transformed into something akin to a right to receive payments for dispensing drugs, and apparently very substantial payments at that.

[21] In determining whether a prima facie case has been made out in relation to whether adequate reasons have been given, I am unable to hold that such a case exists. The issue arising, once it is accepted that reasons required to be given, is whether they are sufficient to advise the informed reader of their nature and whether they might afford him a ground for challenge. The informed reader is someone who is aware of the background to the case and can read the basis for the decision against that background.

[22] Here, the petitioners did not dispute that there had to be discontinuance of the requirement so far as Stanley village was concerned because, as they accepted, a pharmacy had been established in Stanley and therefore the basis for making the requirement in terms of regulation 34 in respect of the whole of the petitioners' practice area disappeared. There was therefore no doubt about why the Trust had made the decision to discontinue in relation to Stanley (i.e. the two mile radius area). Given the background of competition between Davidsons and Goldenverve and their respective applications for inclusion on the pharmaceutical list, I do not think that the informed reader could be left in any doubt either that identical reasons applied to the discontinuance of the requirement in the surrounding areas of Bankfoot and Luncarty where the petitioners' satellite surgeries were located. The reasons here were essentially the same and stemmed from the establishment of the pharmacy in Stanley. Even if a perception of modern transport facilities might not identify Stanley as the obvious choice of the Bankfoot or Luncarty patient, the Trust and, perhaps more important, the National Appeals Panel had determined that the Davidsons pharmacy was in a position to supply the needs of the "neighbourhood", including the Bankfoot and Luncarty areas. In these circumstances, it was clear that if the regulation 34 requirement were to be discontinued it was because the existence of the new pharmacy took away the grounds for any requirement at all relative to the petitioners' practice area.

[23] Where the petitioners' complaint came to be focussed was on the absence of any reasons for the selection of the six month wind down period for Stanley patients and the two year moratorium for the remainder. Although detailed reasons do not exist explaining these particular choices, it remains clear to the informed reader of the Minutes now produced that the Trust were simply allowing appropriate "wind down" periods in respect of the petitioners' surgeries. Indeed the time scales were designed to assist the practical arrangements in these surgeries. The basis for the selection emanated from a recommendation from Dr. Leadbitter, Director of Primary Care, noted in the Minutes of the Meeting itself. The petitioners had made detailed representations also on the question of time scale. It is not known whether their letter was put before the Trust but no point was taken on any failure to take its terms into account.

[24] No argument was advanced that the periods selected for the run down of the dispensing element of the petitioners' practice were in fact unreasonable. Given the knowledge, skill and expertise of the person making the recommendation coupled with its acceptance by the Trust, whose members also include those with specialist knowledge, skill and expertise on such matters, I do not consider that it can be said that the decision was in fact unreasonable or that there has been a failure to explain it adequately.

[25] Secondly, it was argued that the Trust's decision to discontinue the requirement under regulation 34 ought to be capable of being appealed under paragraph 80 the Statement of Fees and Allowances but that neither the Trust nor the Scottish Ministers (the potential appellate body) were prepared to accept this.

Under regulation 34 it is clear that the imposition upon a doctor of a requirement to dispense medicines is the subject of appeal to the Secretary of State. The regulation says so in terms. There is an absence of any suggestion that the discontinuance of the requirement can be appealed and the absence of such a suggestion in the provision which deals both with the imposition and discontinuance of the requirement leads me to the prima facie view that no such appeal was intended to exist (other than, of course, judicial review). In this connection, I do not consider that an extra statutory document such as the Red Book is capable of creating a right of appeal from a decision taken in terms of a statute where none is written, one way or another, into the statute. Although in the past the Secretary of State entertained such an appeal, I do not think that such entertainment can be regarded as binding on the Scottish Ministers. Nor do I consider that that appeal or anything in the regulations or representations of the Trust could give rise to any expectation on the part of the petitioners that a right of appeal existed. Even if it did, the remedy, on the face of things, would be to invoke the appeal procedure and review the Scottish Ministers should they refuse to entertain the grounds.

[26] Turning to the balance of convenience, I was advised that the likely date for a first hearing would be in June, although the prospect of the case not being resolved within that timescale for one reason or another cannot entirely be ignored. Meantime, were I to refuse the interim orders sought, the petitioners would lose, at least temporarily, fairly substantial profits from their dispensing practice to Stanley patients. This could jeopardise the viability of the practice as now constituted. Furthermore, having lost the requirement, the petitioners would be at a substantial disadvantage in having to re-institute the dispensing element. There were, in short, factors of substance in the petitioners' favour on this aspect of the case. The Trust complained that any suspension would mean that their statutory obligations under regulation 34 were not being attended to. However, I do not think that this is significant. The Court's function is to review the decision and, if so advised, to grant such interim orders as are appropriate to see that a balance of convenience is achieved. There were therefore no significant matters affecting the Trust bearing upon the balance of convenience. Davidsons complained that they had gone some way down the road towards gearing up the pharmacy on the basis that they would be dispensing for at least some of the Stanley practice as from mid-April. They too stood to lose if this expectation were not realised. There would also be some effect on the services available to the public but this does not seem to be a major factor.

[27] The battle for the right or obligation to dispense in Stanley and the surrounding villages does not appear to be a new one. The petitioners and the pharmacists have been jostling for position for some time and both have had opportunities to air their cases before the Trust, the National Appeals Panel, the Trust again and now the Court. The principal decision complained of here is dated 16 October 2000. There has been a substantial lapse of time since then which, although in part understandable so far as the petitioners efforts to seek an appeal are concerned, must bear upon the balance of convenience. This is so given, for example, that Davidsons have now, amongst other steps taken to establish their business, hired a full time pharmacist who has given up his home to take up a position next month. Although I have not found the matter easy, having regard to the time period between now and potential first hearing and the various interests of the parties, I have, with hesitation, formed the view that the balance of convenience lies in declining to grant the interim orders sought.

[28] All three opposing parties moved for the expenses of the motion against the petitioners. This would have burdened the petitioners with three sets of expenses in respect of parties, none of whom advanced substantially different arguments from eachother other than momentarily, perhaps, on the issue of balance of convenience. I do not consider that that would be an equitable result. The prime opposing party was the Trust, whose decision was attacked, and I had no difficulty in finding the petitioners liable to them for their expenses. In relation to Davidsons, although I do not criticise them for deciding to be represented or for the manner in which the argument was presented, on the question of expenses I do think it is legitimate to note that they did not restrict themselves to the short balance of convenience points but chose to rework and expand on the main argument which was always going to be advanced by the Trust. In these circumstances, there was considerable duplication and although I awarded them their expenses against the petitioners, I modified the amount to one half. In the case of the Scottish Ministers, they had advanced no argument different from the Trust. Again, although I make no criticism of their appearance, which was no doubt prudent, I do not consider that an award of expenses is appropriate and therefore find no expenses due to or by in their case.

Scottish Court of Session Decisions