Landmark Decision Confirms that Primary Care Providers Are Entitled to Interest at the Rate of 8% on Damages

News | Wed 9th Jun, 2021

In SSP Health Ltd v The National Health Service Litigation Authority (Primary Care Appeals Service) and others [2020] EWCA Civ 1574, [2021] P.T.S.R. 958, SSP challenged the lawfulness of a decision by the NHS Resolution adjudicator, Ms Lisa Hughes, to follow usual NHSLA practice by not awarding interest. 

Lord Justice Stuart-Smith, who gave the lead judgment confirmed that the powers of the adjudicator included the power to award interest and then said:

“Whatever the pre-existing practice, I can see no justification for a blanket policy or decision not to include an award of interest as a constituent part of the appropriate resolution of a dispute where a party has been kept out of sums of money to which it was rightfully entitled.  Put another way, if a party to a dispute has been kept out of their money, it is prima facie appropriate that the resolution of that dispute should include provision to reflect and compensate the party for that fact”

As a result of the Court of Appeal decision, NHS Resolution established national guidelines in relation to interest payments.  A copy of the guidance has been published and is available here.

In SSP Health Ltd v Liverpool Primary Care Trust (now “NHS England”) Case Ref: SHA/18628-18647, Mr Jonathan Haley, Adjudicator, Primary care Appeals, NHS Resolution determined that:

“…an interest payment of 8% per annum from 13 November 2013 to 18 October 2018 in the total sum of £231,902.33 shall be paid by NHS England to the Contractor within 45 days of the date of this determination.”

The Adjudicator stated that:

“NHS England provides comments in relation to my exercise of discretion to award interest including whether the circumstances render the award appropriate. It disagrees with the Contractor’s position that NHS England being a public body is irrelevant and notes that the Contracts to which this NHS dispute resolution relate are NHS Contracts. I am not satisfied that payment of interest in this case would not represent a proper use of public funds. I am satisfied that the award of interest is not punitive to NHS England. Whilst NHS England is a public body, this is a matter where the Contractor was kept out of money that ought to have been paid to it, for a substantial period.

Each of the parties have provided detailed representations and observations on the appropriate rate of interest that should be awarded (if any). I note in particular the many references to case law and the levels of interest awarded by the Courts. I note that the parties are far apart in their considerations of what level of interest might be appropriate and have provided detailed comments to establish their positions.

I note that NHS England make reference to rates of either 2% or 3% above base rate as being rates which the Courts have applied and the case references regarding these. I also note NHS England’s position that the Contractor has not provided a basis for their position that an interest rate of 8% would be appropriate. NHS England considers that a claim “…of 8% is gratuitous.” NHS England has not however satisfied me that a lower rate of interest would be appropriate, having regard to the facts of this particular matter.”

Here is a copy of the determination.

Simon Butler was instructed by Acklam Bond Solicitors, on behalf of SSP Health Limited.