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Court of Appeal refuses to allow NHS England to change the meaning of payment terms in an NHS contract

DATE: 28 Sep 2017

In a significant judgment for the NHS handed down today, NHS Commissioning Board v Silvolsky and another [2017] EWCA Civ 1389, the Court of Appeal has refused to interpret a GP commissioning contract to permit NHS England to vary a fixed premises payment arrangement to make it into a variable payment. 

NHS England inherited a PMS contract from Suffolk PCT which provided that a GP practice would be paid a fixed sum of £77,238 per year for providing practice premises. NHS England sought to argue that the term was introduced into the contract by mistake and the fixed premises payment should be interpreted as being a variable premises payment, so that the premises payment fell to be determined in accordance with the GMS premises directions.  That argument was rejected by the High Court and has been rejected by the Court of Appeal.  Both courts held that NHS commissioners are bound by the natural meaning of the words in the contracts they sign and cannot re-interpret the meaning of clauses just because the NHS ended up paying more than it anticipated.  

The Court of Appeal was also critical of NHS England for continuing both the contract and the payments whilst, at the same time, arguing that no payments were due and that it had the right to recover alleged “overpayments” from the GP practice. NHS England’s claim against the GP practice was dismissed with costs. 

David Lock QC, instructed by Veale Wansbroughs Vizards, acted for the GP Practice.