First Judicial Review of the New Pharmacy Regulations
April 2016 saw the first guidance from the court in relation to the 2013 Pharmacy Regulations and it involved one of our applications.
Whilst the case related to application made under Regulation 18 ("unforeseen benefits") it did not consider the test under Regulation 18 per se, but instead focussed on the unusual situation where one pharmacy contractor has already received permission to open a new pharmacy and a second contractor applies to open a pharmacy at the same location.
The case involved a small village called Bidford where the only doctor's surgery had relocated almost 1 mile out of the village centre. We considered that there was a strong case for a new pharmacy to be allowed to open and we submitted an application under Regulation 18 with the intention of working with the local GP practice.
Initially NHS England refused our application but, after an oral hearing, the NHSLA overturned the decision of NHS England and granted the Rushport application. Normally we would then have proceeded to open the pharmacy, but in this case, the local doctors decided that they didn't want to work with Rushport after all and submitted their own application for a new pharmacy. NHS England granted the doctor's application and, at appeal, the NHSLA also granted it even though the Rushport application had already been granted. In granting the doctor's application the NHSLA said:
"The Committee accepted that there was currently an extant grant for a pharmacy at this location however there was nothing provided to demonstrate that the applicant who held the extant grant had served a notice of commencement in accordance with the Regulations. The Committee was of the view that until such time as the notice of commencement is served this pharmacy is not included on the pharmaceutical list. The Committee was of the view that there was nothing in the Regulations which prohibits a second pharmacy application being granted if it was able to secure the improvements or better access applied for; each application is considered on its own merits."
The idea that an existing grant is not relevant until a "notice of commencement" was served simply didn't make any sense to us at all. If this was correct then the NHS would keep approving new contract applications until one party served its notice of commencement. If you consider an example of a shopping centre then this could result in dozens of new pharmacies all being approved to open within the same centre to meet the same need. The decision also made it almost impossible to plan for new pharmacy openings as a successful applicant wouldn't know how many more pharmacies the NHS was going to allow to open in the same general area.
We decided that we had no choice other than to seek a judicial review of the decision as it had the potential to negatively affect all future applications going forward. In court we asked the judge for three things:
- A declaration that the NHSLA decision was unlawful
- That the decision had to be quashed and sent back to the NHSLA to be considered again, and
- An order that the second application had to be refused whilst the first grant was still valid.
Initially the NHSLA and solicitors acting for the doctors and NHS England all argued that the NHSLA decision was lawful and that the court should not overturn it, but as the case progressed, all parties agreed that the case should be sent back to the NHSLA for a re-hearing, but none of the parties were able to agree on how an existing grant was when considering a second application.
The Honourable Mr Justice Kerr heard the case on 19 April 2016 and delivered his verdict the next day in a case which has provided helpful guidance that must be applied in future cases. The judge agreed with us that the NHSLA decision was unlawful and also agreed that the case had to be sent back to the NHSLA to be considered again, but he did not agree with our argument that the doctor's application must be refused and instead gave guidance that can be applied in all cases, including this one.
The judge said:
"…in a case where there are two competing applications and one has already been granted, as in this case, it may well be perverse and irrational to grant the second one unless there are good reasons for forming the view that the service provision required under the first grant is considered undeliverable. Such reasons could include, for example, the insolvency of the first grantee, or a public statement that it has lost interest in the pharmaceutical business."
The judgement is important as it means that in future any existing grant must be taken into account when considering future applications. If NHS England had applied the law properly then the application made by the doctors would have been refused and the judge firmly rejected NHS England's argument that they should be allowed to grant as many applications as they felt was necessary.
Whilst it is frustrating to have to spend considerable amounts of time and money on a court case that should never have been necessary, it is important to be willing to do so in order to make sure that errors like this do not happen again in the future.
We are often asked what the potential costs of a judicial review are and this case provides some helpful guidance on that subject. Even though we were successful we did not win on every point and we felt it would be wrong to seek our costs from the NHSLA as they did not fight the case in court.
Our original budget for the judicial review was £80,000 as far as the High Court and significantly more if we ended up in the Court of Appeal. Our actual costs came in at £46,000 (£25,300 after various tax reliefs) and included paying 50% of the doctor's costs as they successfully resisted our request for their application to be automatically refused. So even a successful judicial review is still an expensive thing to undertake but is sometimes the only available option.
If you are considering an application where there may be more than one applicant for the same site then please contact us and we will be happy to discuss the best approach.