NHS Luton Clinical Commissioning Group v Amanah Health Ltd and Others
| Jurisdiction | England & Wales |
| Judge | His Honour Judge Purle |
| Judgment Date | 29 April 2014 |
| Neutral Citation | [2014] EWHC 2943 (QB) |
| Docket Number | Claim No. A40BM023 |
| Court | Queen's Bench Division |
| Date | 29 April 2014 |
[2014] EWHC 2943 (QB)
IN THE HIGH COURT OF JUSTICE
BIRMINGHAM DISTRICT REGISTRY
MERCANTILE COURT
Priory Courts
33 Bull Street
Birmingham
B4 6DS
His Honour Judge Purle QC
Sitting as a Judge of the High Court
Claim No. A40BM023
Counsel for the Claimant (instructed by Eversheds LLP): Miss Jane Oldham
Counsel for the Defendants (instructed by Charles Russell LLP) Mr Thomas Roe QC
THE JUDGE: This is an application to continue a freezing order which was granted by His Honour Judge Barker QC against four parties: Amanah Health Limited, Mohamed Saleh, Nora Fadel and Saleh & Fadel Limited. The latter two are treated effectively as nominees holding assets for one or other of the others and, therefore, the real issue is whether or not there is a proper cause of action against Amanah Health Limited and Mohamed Saleh (together "the defendants") and, if so, whether the conditions for the grant of freezing order relief are present. In addition, Judge Barker made a search order, and certain ancillary orders are sought arising out of the search, whereas the defendants say that the search order ought never to have been granted and should now be discharged.
A freezing order requires a good, arguable case; a search order, it is said, requires at least that and, in fact, usually considerably more, namely a strong prima facie case. I shall consider first whether a good, arguable case has been shown. If it has, I shall then have to consider whether a strong prima facie case has been shown and, if those hurdles are crossed, I will then have to consider whether or not there is a sufficient risk of (a) dissipation or secretion for the purposes of a freezing order and (b) the destruction of evidence for the purposes of a search order.
The claimant is NHS Luton Clinical Commissioning Group ("the claimant commissioning group"), which is one of the bodies to emerge from the division of primary care trusts, and is now responsible for the cost of prescriptions within its area in the circumstances I shall now describe. The first defendant is a registered pharmacy practice which has a contract or arrangement (a deliberately neutral phrase) with "NHS England", a name used by the National Health Service Commissioning Board. NHS England (which I shall call it for short) pays the pharmacist directly for all dispensed prescriptions. NHS England then recoups the sums paid from the claimant commissioning group by applying a reduction to the overall budget which would otherwise be paid. Thus, although there is no contractual or other legal relationship between the claimant commissioning group and the pharmacist, the activities of the pharmacist have a direct effect upon the claimant's financial well-being because the more that the pharmacist charges for prescriptions, the more the budget of the claimant commissioning group is reduced.
It is said in this case that fraudulent practices were adopted by the pharmacist under the control of the second defendant, Mr Saleh. Mr Saleh is said to be an unsavoury individual with a criminal record, though on examination the offence relied upon was one of strict liability committed by one of his employees and not himself. The effect of the alleged fraud in this case was to inflate many times over the monies actually due for prescriptions. This was to the detriment of the claimant commissioning group because the pharmacist was overpaid substantial sums by NHS England which have in turn been passed on to the claimant commissioning group by reduction of its budget.
Regulation 94 of the National Health Service (Pharmaceutical and Local Pharmaceutical Services) Regulations 2013 ("the Regulations") confers a right of recoupment at the instance of NHS England but not through court proceedings. The Regulations provide for an adjudication and appeal process within the Health Service which expressly excludes the court's jurisdiction in the absence of ministerial consent. In any event, the claim before me is not a claim by NHS England to recover monies dispersed for medicines; it is a claim by the claimant commissioning group which has suffered loss because of the deductions made from its budget.
Investigations were afoot in the early months of this year following a notable increase in the numbers of medicines dispensed by the defendant pharmacist under repeat prescriptions, leading to suspicions that the system was being operated fraudulently. The increase in the number of prescriptions dispensed was in no way matched by an increase in the number of patients and I have no doubt, despite Mr Roe QC's trenchant observations about statistics generally, that the figures (which are fully set out in the evidence) gave rise to real concerns.
It is also said by Mr Roe QC that the presentation of material before Judge Barker was too general to be of use, and not of a sufficient standard to justify relief on a without notice basis. In my judgment, the evidence and skeleton argument placed before Judge Barker on the without notice application sufficiently broke down and explained the various categories of impropriety which were under consideration, though as of yet the losses have not been separately quantified head by head. That may have to happen in due course so far as the available material enables that to be done, but was not an essential requirement at the without notice stage, as a genuine estimate of loss could still be made without any more detailed breakdown.
Accordingly, it seems to me that there is here a prima facie case of fraudulent conduct of the dispensing of medicines and the way in which repeat prescriptions have been operated. That evidence is added to. There is more than just statistics. Examples are given, though not that many, of individuals who complain of forged consent forms and the like, and of people who claim that medicines have been ordered for them when they neither needed nor received them.
Mr Roe QC, ambitiously but perfectly properly, contends that the claimant has not identified a cause of action on the facts which is sustainable as a matter of law. There are two causes of action which are relied upon, both economic torts. It is now clear that these are separate torts and not overlapping torts. The first is unlawful interference with the claimant's business and the second is wrongful procurement of a breach of contract. The contract is said to be that between the claimant commissioning group and NHS England. However, it is clear from cases such as Roy v Kensington and Chelsea and Westminster Family Practitioner Committee [1992] 1 AC 624 as applied in Ealing, Hammersmith & Hounslow Family Health Services Authority v Shukla [1993] ICR 710 and North Essex Health Authority v David-John [2004] ICR 112, all cases on predecessor regulations not significantly different from the present Regulations, that the relationship between the claimant commissioning group and NHS England whilst having private law consequences is not a contractual relationship.
It seems to me that that is fatal to any case for procuring breach of contract. It may well be that procuring a breach of the private rights arising from that relationship in some way triggers the tort of interference by unlawful means but in that event the elements of the cause of action have to satisfy the other requirements of that tort. I, therefore, put aside for the purposes of this application the alleged wrongful procurement of a breach of contract. In fairness to the claimant commissioning group, Miss Oldham in argument before me very properly accepted that the procurement of a breach of contract claim was not sufficient to get her home at least on the search order aspect of her claim and possibly on the freezing order aspect also. She acknowledged that the authorities as they presently stand require the court to extend the liability for procuring breach of contract into an area in which it has not hitherto been extended. I have considered, amongst other cases, the House of Lords decision in OBG v Allan [2008] 1 AC 1. Their Lordships' House considered the whole area of economic torts across three separate cases. The result is that the boundaries of the two separate torts with which I am concerned are now relatively well established and that there is no realistic opportunity, at least at the level of this court, of establishing the procuring of a breach of contract beyond contract properly so called.
I turn then to consider the elements of the tort of interference by unlawful means. This was authoritatively considered by the House of Lords in OBG v Allan, by Lord Hoffmann principally but also by others of their lordships, most notably for present purposes by Lord Nicholls of Birkenhead. Lord Hoffmann traced the historical development of the tort of causing loss by unlawful means by reference to cases such as Garret v Taylor [1620] Cro Jac 567 and Tarleton v M'Gawley [1794] Peake 270, a case in which a trader by firing a cannon to drive away a canoe caused loss to another trader who was seeking potential customers from the canoe. These old cases, as Lord Hoffmann observed, gained new life in the late 19 th and early 20 th century with the growth of trade unions. The law was developed to deal with departures from what were then regarded as basic standards of civilised behaviour in economic competition between traders or between employers and labour (see paragraph 56).
Lord Hoffmann also emphasised the reluctance of the common law to become involved in devising rules of fair competition, observing that such...
To continue reading
Request your trial
-
The Secretary of State for Health v Servier Laboratories Ltd
...of the High Court, on a contested application to continue a freezing order and to discharge a search order in NHS Luton Clinical Commissioning Group v Amanah Health Limited [2014] EWHC 2943 (QB), which Mr Crow relied upon as in favour of his submissions even though the judge said (at [12])......