Outsourcing of NHS services: the High Court in JMH v Akramy finds that no non-delegable duty is owed to patients
Articles | Thu 17th Dec, 2020
- The High Court on 15 December 2020 handed down judgment in the case of JMH v 1. Akramy 2. Badger Group 3. NHS Commissioning Board  EWHC 3445 (QB), an important decision regarding the NHS’s liability for outsourced medical treatment. The Claimant, JMH, sustained severe brain injuries on account of (allegedly) negligent medical care provided on 27 December 2008 at an NHS out-of-hours clinic run by a private company. The question for determination by the High Court as a preliminary issue was a novel one: whether a Primary Care Trust owed a non-delegable duty to patients under section 83(1) of the NHS Act 2006 or at common law to take reasonable care in the performance of primary medical services.
- HHJ Melissa Clarke, sitting as a High Court Judge, found against the Claimant and concluded that a Primary Care Trust did not owe such a duty.
- The judgment is potentially devastating to the Claimant’s claim: if she establishes liability in her clinical negligence claim, and if – as is likely – the £3,000,000 indemnity cover of the First Defendant (the alleged tortfeasor) is insufficient to meet her claim for damages and costs, the Claimant will be left undercompensated, perhaps by a very considerable sum. I suggest that this result of the statutory scheme, namely the ability of NHS bodies (here a Primary Care Trust) to outsource their responsibility for primary medical services to third parties who have inadequate professional indemnity insurance, would come as a surprise to the great majority of NHS patients.
- In this article I shall summarise the decision and explore its implications for litigators.
- The Claimant (“C”) on 29 December 2008, at the age of 2, was admitted to the Birmingham Children’s Hospital as she was very ill. She was diagnosed with pneumococcal meningitis. Despite emergency treatment, she sadly sustained severe brain injuries and has been left with very profound disabilities.
- Two days previously, on 27 December 2008, C’s grandmother, Mrs H, had telephoned the local general practitioner’s surgery because she was worried that C was unwell. She had been advised to take C to the Badger Medical Centre at Selly Oak Hospital (the “BMC”), which provided out of hours (“OOH”) primary medical care to NHS patients in South Birmingham.
- C accordingly attended the BMC on the same date, where she was seen and assessed by nurse practitioner Ms Akramy, the First Defendant (“D1”). It is C’s case that the treatment which she received from D1 at this appointment, and in particular the “safety net” advice, was negligent, and, in summary, resulted in Mrs H not seeking further medical attention for C soon enough, and thereby caused C to sustain life-changing brain injuries.
- D1 has denied liability.
- The OOH primary medical care which C received at the BMC on 27 December 2008 was provided pursuant to a contract between the former South Birmingham Primary Care Trust (the “SBPCT”) and a company within Badger Group, the Second Defendant (“D2”). This contract required D2 to provide OOH primary medical services to NHS patients in South Birmingham. It was entered into by the SBPCT under its power to make contractual arrangements at section 83(2)(b) of the NHS Act 2006. By means of the contract the SBPCT purported to discharge its duty under section 83(1) of the NHS Act 2006 to “provide … or secure [the] provision [of]” primary medical services within its area.
- The NHS Commissioning Board, the Third Defendant (“D3”), is the NHS body now responsible for the liabilities of the SBPCT.
- D2 arranged for D1 to work as a self-employed Nurse Practitioner at the BMC. D2 accepts that it is vicariously liable for any negligence or breach of duty by D1 in the course of her work.
- The contract between the SBPCT and D2 contained a provision requiring D2 to have “adequate insurance” against all liabilities arising from negligent OOH primary medical care provided pursuant to the contract. Nonetheless:
(a) D1’s policy of indemnity, issued by the Royal College of Nursing, is limited to £3,000,000, inclusive of her own and any other party’s costs, with no discretion to extend this limit
(b) D2 is uninsured for the purposes of any liability to C.
- As a result of the insurance deficits of D1 and D2, which put C at significant risk of being undercompensated should her claim succeed, C joined D3 to the proceedings on the basis that the SBPCT had owed C a non-delegable duty of care in respect of the treatment provided at the BMC. Only C and D3 took part in the preliminary issue trial.
The trial of the preliminary issue
- The duty owed by Primary Care Trusts (“PCTs”) in respect of primary medical services is set out in section 83 of the NHS Act 2006. This provides (my emphasis):
“83 Primary medical services
(1) Each Primary Care Trust must, to the extent that it considers necessary to meet all reasonable requirements, exercise its powers so as to provide primary medical services within its area, or secure their provision within its area.
(2) A Primary Care Trust may (in addition to any other power conferred on it)–
(a) provide primary medical services itself (whether within or outside its area),
(b) make such arrangements for their provision (whether within or outside its area) as it considers appropriate, and may in particular make contractual arrangements with any person…”
- Other provisions of the NHS Act 2006 which were relevant to the High Court’s decision included the following:
“Section 1: Secretary of State’s duty to promote health service
(1) The Secretary of State must continue the promotion in England of a comprehensive health service designed to secure improvement–
(a) in the physical and mental health of the people of England, and
(b) in the prevention, diagnosis and treatment of illness.
(2) The Secretary of State must for that purpose provide or secure the provision of services in accordance with this Act….”
“Section 2: Secretary of State’s general power
(1) The Secretary of State may–
(a) provide such services as he considers appropriate for the purpose of discharging any duty imposed on him by this Act, and
(b) do anything else which is calculated to facilitate, or is conducive or incidental to, the discharge of such a duty….”
- The High Court first considered whether a non-delegable duty of care arose under the statute. It was referred to a number of authorities in this regard:
(a) Myton v Woods (1979) LGR 28: the local education authority had a duty to “make such arrangements for the provision of transport …as they consider necessary … for the purpose of facilitating the attendance of pupils at schools…” The local authority, having carried out their duty to make suitable arrangements, was not liable for a contracted taxi driver’s negligence;
(b) A (A Child) v Ministry of Defence  EWCA Civ 641 and GB v Home Office  EWHC 819 (QB): both cases concerned the existence of non-delegable duties arising at common law;
(c) Armes v Nottinghamshire County Council  UKSC 60: the Supreme Court drew a critical distinction between a duty to perform, and a duty to arrange. The words “shall discharge … by boarding him out…” in this case indicated that the local authority’s duty did not extend beyond the placement of children with foster carers i.e. the arrangement of foster care;
(4) Razumas v Ministry of Justice  EWHC 215 (QB): the Claimant argued that the Ministry of Justice owed a common law non-delegable duty.
- Mr Readhead QC for C contended that the wording at section 83(1) of the NHS Act 2006 (“provide … or secure [the] provision [of]”) indicated that the PCT’s duty was to “provide primary medical services by whatever means”. This was more than a duty to arrange or facilitate medical care. The PCT’s power under section 83(2) – to “make such arrangements for their provision … as it considers appropriate” – did not define the scope or content of this duty.
- Mr Readhead QC further argued, in support of the existence of a non-delegable duty, that:
(a) Regard should be had to the NHS Constitution, which stated that the NHS was, “an integrated system of organisations and services”;
(b) It would be a surprising outcome if NHS hospital patients were found to be subject to a non-delegable duty, while NHS patients at walk-in clinics were not.
- Mr McCullough QC for D3 opposed the argument that the phrase “secure the provision of” extended beyond a duty to arrange. He noted that section 83(1) expressly permitted a PCT to arrange for primary medical services to be provided by others. If the duty was properly to be regarded as a duty to provide, the phrase at section 83(1) would have been redundant, re-stating as it does the power at section 83(2) to outsource to third parties.
- The High Court ruled that the statutory framework did not impose upon PCTs a non-delegable duty of care. Its reasoning was as follows:
(a) Sections 1 and 2 of the NHS Act, which expressly referred to a statutory duty and a statutory power respectively, tracked the wording of sections 83(1) and 83(2), confirming that the PCT’s statutory duty is found at section 83(1);
(b) The duty at section 83(1) can be discharged either by the PCT providing primary medical services or by the PCT securing the provision of primary medical services;
(c) If Parliament had intended that section 83(1) include only a duty to perform, it could have omitted the words “secure [the] provision [of]” with no difference in meaning;
(d) The PCT’s duty had been intentionally worded in the alternative;
(e) A duty to “secure [the] provision [of]” was equivalent to a duty to arrange;
(f) The duty at section 83(1) could be discharged by contracting with a third party, and thus there was no non-delegable duty in respect of the provision of primary medical services.
- C’s submissions in respect of the NHS Constitution were to be rejected, as it was not in force at the time;
- It was denied that the outcome was surprising. Patients such as C remained NHS patients, and were equivalent to patients of a GP surgery which was run as a private partnership.
- The Court held that the existence of a delegable duty pursuant to statute ruled out the existence of a non-delegable duty at common law (said by C to arise by application of the criteria in Woodland v Swimming Teachers Association  UKSC 66).
- On one view this decision represents an unremarkable exercise of statutory interpretation, carried out in accordance with the leading judgment of Armes v Nottinghamshire County Council. The High Court concludes, in a short final section of barely 10 paragraphs, accepting D3’s arguments above, that section 83(1) of the NHS Act 2006 contains a mandatory statutory duty, which can be discharged in one of two ways. The second of the two ways is for the PCT to arrange for the provision of services by a third party, thereby excluding a non-delegable duty to provide. The Court’s conclusion that the existence of a statutory delegable duty rules out a common law non-delegable duty also, in my view, cannot be criticised.
- But the practical import of the decision for C is devastating, as, if her claim succeeds, she may well be undercompensated due to the NHS’s contractual arrangements in respect of the BMC, of which Mrs H had no knowledge at the time. The decision is also very troubling, I suggest, for NHS patients more broadly. Its impact is that an NHS patient who has been injured due to negligent medical treatment outsourced to a third party will be without a remedy if the third party is un-insured or under-insured. If the sum owing to the injured Claimant is much higher than the limit of the third party’s professional indemnity insurance he/she will be left significantly undercompensated with resulting injustice and likely future financial hardship.
- The result for C in the present case is in my opinion deeply unfair, even if arguably correct in law. When Mrs H was advised to attend the BMC, and when she took C to be seen and assessed by D1, she had no idea that the BMC was run by a third party, or that D1 was covered by a limited indemnity, which might be worth substantially less than the value of a potential clinical negligence claim. She relied on the fact that the treatment was provided to C as an NHS patient. No doubt most NHS patients would make those same reasonable assumptions.
- Had C been treated at an NHS hospital it is very likely that she would have been owed a common law non-delegable duty of care by the Trust managing the hospital, given numerous judicial dicta to this effect. It is notable that, on account of section 83 of the NHS Act 2006, no such non-delegable duty of care arises when primary medical services are outsourced to third parties in circumstances in which a non-delegable duty of care would seem to be particularly appropriate under the criteria in Woodland v Swimming Teachers Association.
- C’s argument that section 83 of the NHS Act should be interpreted in the legislative context of the NHS Constitution was dismissed by the High Court. The significance of the co-existence (from 2010) of the duty upon PCTs in respect of primary medical services and their duty to have regard to the NHS Constitution is unclear. But the outcome of this judgment as set out at paragraph 24 above must surely stand in contrast to the fifth principle of the Constitution, which states, “The NHS is an integrated system of organisations and services bound together by the principles and values reflected in the Constitution.”
- What will the judgment’s effect be on those litigating clinical negligence claims arising from NHS treatment? It clarifies the legal position in the event that damages sought exceed the limit of professional indemnity insurance for a defendant. This situation is most likely to occur in claims against nurses insured by the Royal College of Nursing, who, as in D1’s case, are typically insured up to a limit of only £3,000,000.
- In respect of claims against General Practitioners, prior to 01.04.19 GPs generally had professional indemnity insurance through the Medical Defence Union of £10,000,000 per claim, subject to a discretion on the part of the MDU to increase this limit. On 01.04.19 the National Health Service (Clinical Negligence Scheme for General Practice) Regulations 2019 came into effect, which provided a full state indemnity scheme for general practice in England.
- It is likely that more cases will crop up like the case of JMH v Akramy in which the value of the claim is greater than the level of indemnity insurance held by the third party, and in which the relevant NHS body (whether the PCT or the NHS Commissioning Board) will not plug the gap. It can only be hoped that legislators will come to recognise the unfairness of this situation, including its inconsistency with the NHS Constitution and what members of the public reasonably expect, and will set up a full state indemnity scheme comparable to that now in force for general practice.
 All my references to the NHS Act 2006 are to its form as at 27.12.08, except where I state otherwise.
 Assuming that the Claimant would not be able to enforce a judgment against the Second Defendant, which is uninsured for the purposes of liability to the Claimant: see para 22 of the judgment.
 Badger Healthcare Limited. I shall refer to the company as “D2” for ease of reference.
 Para 24(ii) of the judgment.
 The fifth principle of the NHS Constitution for England.
 Subject to the NHS body being able to demonstrate that it took reasonable care in arranging for a third party to provide the services.
 For example obiter dicta of Lord Sumption in Woodland v Swimming Teachers Association  UKSC 66 at -.
 Section 2 of the Health Act 2009.
 Section 83 of the NHS Act 2006 was amended in 2012, and section 83(1) now requires the NHS Commissioning Board to “exercise its powers so as to secure the provision” of primary medical services. In my view this amendment is unlikely to have altered the legal position that the commissioning body (now the NHSCB) owes a statutory delegable duty.