GPs lose ‘turning point’ legal battle with NHS property agency

Last week, Justice Johnson ruled in favour of NHS Property Services following a lengthy wrangle between the company and the BMA.

NHSPS, which is wholly owned by the health and social care secretary, has tried for several years to agree leases and annual service charges with GPs occupying many of the 3,700 premises inherited by NHSPS after the abolition of primary care trusts in 2013.

Currently, four of five GPs occupying NHSPS-owned buildings have refused to pay all or part of the service charges, citing concerns about the accuracy of the charges and their liability to pay them. NHSPS believes at least £175m is owed in total.

The legal battle started in 2019 when the BMA took NHSPS to court over the “unjustifiable” fees charged, on behalf of five practices, with the union aiming to provide a “template” for GP practices to defend “unlawful” claims for service charges by NHSPS.

In a 170-page ruling, the High Court judge found in favour of NHSPS which means the five practices will have to pay NHSPS’s service charges of up to a total of £1.3m. However, a second court trial will be needed to ascertain the “reasonable” amount the practices must pay to them.

The judge also warned of classifying the cases against the five practices as “test cases”, but said he hoped his judgment would help NHSPS and other GP practices resolve disputes over service charges “without the need for expensive litigation”.

He said it was not sensible for any GP practice to “adopt… a policy of non-engagement” against NHSPS.

NHSPS reaction

Reacting to the judgment in an interview with HSJ, NHSPS chief executive Martin Steele said he hoped the ruling would prevent further court cases in future and that the organisation was “keen to engage” with GPs over their service charges.

He said: “The simple fact is we must recover legitimate costs associated with the services we provide to the GP community.

“I think this ruling brings a level of clarity that everyone needed.

“Historically, there have been issues where we may have charged for services incorrectly, but our billing process is now much more robust than it has been.

“We are not in the game of trying to charge customers for things they haven’t had, and we know we’ve made some mistakes and when they’re pointed out we’ll correct them.”

Mr Steele said it was in no one’s interest to “end up in a courtroom” and expressed a hope that NHSPS and GPs could work closer together to resolve the issue.

Asked how the court case had affected NHSPS’s relationship with GPs over the charges, Mr Steele said many GPs had been advised by the BMA not to engage pending the trial’s outcome.

“Traction has been low because of this court case,” he said.

“Now we’re through it, I hope GPs are willing to engage with us to agree what those charges are going forward. We’re really open and will happily investigate anything they’re not comfortable with.

BMA reaction

The BMA did not make anyone available for interview, but a spokesman said the union was considering appealing.

Asked what consequences the judgment would have for GPs, the BMA said practices facing similar situations to the five surgeries in the legal case should “seek their own advice as to what is and is not payable”.

In a statement BMA premises lead Gaurav Gupta said NHSPS had reduced the total amount of charges they were claiming by a significant amount during the legal case – more than £178,000 in one case – which “underlined the opacity of NHSPS’ methods for calculating charges”.

“Had the BMA not supported the GP practices in this case to defend NHSPS’ claims for charges they could have overpaid hundreds of thousands of pounds to NHSPS which NHSPS was unable to substantiate when required to do so,” he said.

Responding to the BMA, Mr Steele said: “Wherever any of our charges have been challenged we haven’t said ‘you must pay this’ – we’ve looked at it and investigated it, and if we can’t justify or prove that cost then we don’t charge it.

“What we have charged is where we are absolutely confident a service has been delivered, though the further back [in time] we go the more challenging it becomes.”

The BMA added it would continue to support the five practices in preparation for the next stage of proceedings, and that the union is “considering all options and ways to work with other stakeholders as appropriate”.