Failure to meet the NHS plan's performance targets will mean being classified as a 'red-light' organisation in need of special measures. This will have legal implications for both patients and trusts alike, writes Melanie Print

The government has set tough performance targets in its NHS plan.

Those NHS organisations that succeed in meeting them will be given a 'green' light and be rewarded with increased autonomy and financial incentives.

Conversely, those that fail will be designated 'red' and be subject to 'special measures', including having to produce a recovery plan.

'As a last resort, those 'red' organisations that fail to respond to special measures and meet their recovery plan will be put under the control of a new replacement senior executive, non-executive, and clinical team', says the plan.

These could be clinicians and managers from green organisations. Where the 'red' organisation is a trust, it could be merged or split up.

What are the legal implications for the red organisation - in particular for the replacement management and clinical team - and are there sufficient powers for such action?

Furthermore, will patients and the public have separate enforceable rights against a red organisation?

The NHS plan envisages that equity of access to services by patients will be the cornerstone for the provision of NHS services, and that the replacement of waiting lists with a 'guaranteed' booking system will give patients direct rights against a trust.

Under Section 20 of the Health Act 1999, the Commission for Health Improvement has a wide remit to investigate, review and report the failings of NHS bodies. While it does not have the power to address a failing management in the terms envisaged by the NHS plan, there would be scope for the secretary of state to extend its powers to enable it to do so.

Similarly, the dissolving of a trust could be achieved using the secretary of state's existing powers.

More complex are issues of liability. The management and clinical team that steps in will have the unenviable task of addressing the failings of the red organisation. These are likely to include :

Failure to comply with the statutory duty of quality (Section 18 of the Health Act 1999).

Failure to meet waiting-list targets or guarantees arising from the booking system.

Failure to achieve appropriate outcomes with reference to the relevant national service frameworks, with an inevitable increase in clinical negligence claims.

If the new management and clinical team are not to assume personal liability for their actions, they would be prudent to request indemnities more extensive than those currently offered to executive and non-executive directors, particularly with increased liabilities under the recently enforced Human Rights Act 1998.

Such indemnities should include a binding agreement that any liabilities arising from the above failings would be met by the red-light organisation on a residual basis, not just up until the time of the new team's appointment. The period should be over the time of the recovery plan and any extension to this period should be agreed with the regional office, the Modernisation Agency and/or CHI.

Their appointment would also presumably require the suspension of the existing management team. It would have to be shown that there were sufficient grounds to warrant their suspension or they could claim unfair or wrongful dismissal.

It could be that executive directors' contracts of employment would have to be varied to enable the NHS, as their employer, to suspend them for failing the milestones set out in the trust's recovery plan.

The courts have been reluctant to find an organisation liable for breach of statutory duty, but this reluctance is waning.

1While such claims remain rare, it is possible that a court would be willing to impose liability on a red-light organisation if it had breached its statutory duty of quality and failed to comply with the general duty to provide such services as are reasonably necessary to meet the needs of its population.

The courts are likely to judge red-light organisations by reference to patients' legitimate expectations, or promises that have been made; that they will be treated by a set time, for example.

Although in cases involving challenges over treatment decisions, the courts have not yet considered whether the 'promise' to prescribe a particular drug is binding - against which a separate action would lie - this is a developing area and it is only a matter of time before the courts consider such matters.

2Clearly, patients would welcome the enforcement of such provisions. But if the NHS plan sets off a wave of litigation it will serve no-one.

It remains to be seen whether article 2 (the 'right to life') of the Human Rights Act will give patients the 'human r ight' to be treated by a certain time and in a certain manner. It can only be matter of time before such an application is made and tested by the courts.


1 X and others (minors) - v - Bedfordshire County Council and Others 1995 (1995) 2 AC 633, HL.

2 R -v - North Derbyshire HA exp. Fisher (1997) BMLR 3.