NHS Contracts, Restitution and the Internal Market
| Date | 01 November 1993 |
| Author | Kit Barker |
| Published date | 01 November 1993 |
| DOI | http://doi.org/10.1111/j.1468-2230.1993.tb01909.x |
NHS
Contracts, Restitution and the Internal Market
Kit
Barker
*
Introduction
The National Health Service and Community Care Act
1990
has introduced a
revised and controversial system of health care provision into the United
Kingdom.’ A principal feature of this system is the introduction of a
decentralised, but closely regulated ‘market’ in health care services, in which
‘purchasers’ of care are separated from ‘providers.’ The idea is to make service
provision more competitive, and consequently more efficient. Where purchaser
and provider are both NHS bodies, the arrangement by which services are bought
and sold is known as an ‘NHS contract.’2 These ‘contracts’ are not the only
mechanism by which health care is now to be provided, but they are extremely
important. Indeed, it has rightly been said that they are seminal to the entire
ref~rm.~
NHS
contracts are peculiar beasts. Unlike ordinary contracts, they give rise to
no ‘contractual’ rights at law.4 Disputes, both pre-contractual (relating to terms)
and post-contractual (relating to performance, variation or termination) are
apparently removed from the jurisdiction of the courts and referred instead to the
Secretary of State or one of his appointees. To this extent, NHS contracts are more
akin to ‘administrative arrangements’ than contracts in any legal ~ense,~ the
intention of Government being that they should be approached co-operatively
,
not
as ‘legalistic or adversarial’ exercises6 and that they should give rise to no
litigation in the courts, Service provision agreements within the internal market
should, the message runs, give rise to no private law consequences between NHS
bodies.
The NHS reforms have been the focus of considerable comment in this and other
law journals,8 but one important issue which has hitherto escaped detailed
academic consideration is whether restitutionary remedies will be available to
*Lecturer in Law, University
of
Southampton.
The support of the Economic and Social Research Council is gratefully acknowledged. This
work
was part
of the ESRC Contracts and Competition Research Programme and was funded by ESRC award number
1114251005.
The author is
also
indebted to Jonathan Montgomery for his comments on earlier drafts.
See generally Longley, ‘Diagnostic Dilemmas: Accountability in the National Health Service’
(1990)
PL
527;
Hughes, ‘The Reorganisation of the National Health Service: The Rhetoric and Reality of the
Internal Market’
(1991) 54
MLR
88;
Jacob, ‘Lawyers go to Hospital’
(1991)
PL
255;
Miller,
‘Competition Law and Anticompetitive Behaviour Affecting Health Care’
(1992)
55
MLR
453.
s
4(1)
of
the Act defines an NHS contract as ‘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 performance of its functions.’ The consequence
of this definition is that service provision arrangements between District Health Authorities and private
hospitals, or hospitals remaining within their own managerial structure, are not NHS contracts. In the
former case, they are ordinary, legal contracts. In the latter, they are administrative arrangements
regulated by managerial processes: Hughes,
op
cit
n
1,
at p
90.
3
Longley,
op
cif
n
1,
at p
545;
Jacob,
op
cit
n
1,
at p
269.
4
s
4(3)
NHSCCA
1990.
5
See the comments bv the Secretarv of State for Health: HC Deb vol
163,
col4
(7
December
1989).
1
2
6
EL
(90)MB/24.
7
Contractsfor
Health
Services
(Operating Contracts)
(HMSO,
1990)
para
4.32.
See also comments of
the Secretary of State for Health, at HC Standing Committee
E,
col
349,
cited in Jacob,
op
cit
n
1,
at
p
273.
8
n
1
above.
@
The Modern Law Review Limited
1993
(MLR
56:6,
November). Published by Blackwell Publishers,
108
Cowley Road, Oxford
OX4
1JF
and
238
Main Street, Cambridge, MA
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