public matters newsletter, may 2014

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Page number

Another Teckal case fails in the ECJ, but not surprisingly this time

Peter Ware

2 - 4

Time limits for challenging contract award decisions

Steven Brunning

5 - 6

Fixed term contracts – what you need to know

Peter Jones

7 - 12

Introduction to early conciliation

Peter Jones

13 - 15

Clarification on the role of Clinical Commissioning Groups

Ben Standing

16 - 19

The government’s new ‘Right to Build’ policy and its impact on local authorities

Will Thomas

20 - 21

Peter Ware | 0115 976 6242 | [email protected]



But not surprisingly this time

On 8 May 2014, the European Court of Justice (ECJ) gave its ruling in case C-15/13 Technische Universität

Hamburg-Harburg and Hochschul-Informations-System GmbH v Datenlotsen Informationssysteme GmbH

following a reference from a German court on the application of the ‘Teckal’ exemption as it applies to so

called horizontal transactions. In a ruling which may have an impact on certain commissioning within the

NHS and the wider public sector, the court rejected arguments that the award of the contract in this case,

between bodies on a horizontal level, was outside of the public procurement regime.

As you will all probably be aware, there is now a long established line of case law stemming from case C-

107/98 (Teckal) in relation to the award of contracts to ‘in-house’ entities. It has been held that a call for

tenders under directive 2004/18 (the Directive) is not required where a contract authority (or authorities

collectively) exercises over a body, legally separate from that authority or authorities, a control which is

similar to that which it exercises over its own departments and, at the same time, that body carries out the

essential part of its activities with that controlling authority or authorities.

In this case the university had carried out an assessment exercise on two IT systems one which was provided

by Hochschul-Informations-System GmbH (HIS) and the other provided by Datenlotsen Informationssysteme

GmbH (DI). After assessment (which was not carried out in accordance with the Directive) the university

decided to directly award the contract to HIS without any competition. The university had decided that it

did not need to follow an award procedure under the Directive because it considered that it could take

advantage of the Teckal exemption. This was justified on the ground that, although there was no

relationship of control between the two entities, the condition of ‘similar control’, established by the case-

law, was satisfied because both those parties were under the control of the City of Hamburg. DI brought a

claim for an illegal direct award and sadly, for the university, the court agreed with them and perhaps when

we look at the facts that decision is not much of a surprise.

HIS was a limited company, one third of its capital being owned by the Federal Government of Germany and

two thirds owned by the 16 German Länder. The City of Hamburg’s shareholding equated to 4.16% of that

capital. The HIS’s articles of incorporation stated that the object of its business was to support higher

education establishments and the competent authorities in their efforts to achieve the rational and effective

fulfilment of their higher educational role. HIS’s IT systems are used in more than 220 public and religious

higher education establishments in Germany.

HIS’s articles of incorporation went on to provide that its supervisory board was made up of ten members,

seven of whom were appointed on a proposal from the Conference of Ministers of the Länder, two on a

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proposal from the Conference of Rectors of the higher education establishments and one on a proposal from

the Federal authorities. HIS also had a board of trustees (Kuratorium), and 19 of the 37 members came from

the Conference of Ministers of the Länder. It was agreed at trial, that 5.14% of HIS’s turnover related to

activities on behalf of entities other than public higher education authorities.

Accordingly, the university had no direct ownership or control in or of HIS.

The court confirmed the commonly understood requirements of the exemption in relation to the necessary

control. However, in the case, it was agreed that there was no relationship of control between the

university, as the contracting authority, and HIS, the contractor. The university held no share in the capital

of that entity and had no legal representative on its management bodies. In the court’s opinion the

existence of a specific internal link between the contracting authority and the contractor, was absent.

Accordingly, to extend the Teckal exemption to the situation in question was in the court’s view to exceed

the limits of its application, which had been clearly defined by the case-law of the court. Furthermore, it

was to be noted that, on the basis of the evidence and in the light of the case-law set out above, the City of

Hamburg was not in a position to exercise ‘similar control’ over the university. The control exercised by the

City of Hamburg over the university extends only to part of its activity, (matters of procurement only),

otherwise the university had a large degree of autonomy. This again meant that the requirements of the

exemption had not been fulfilled.

The court did not go on to examine whether the exemption concerning in-house awards is capable of

applying to so-called ‘horizontal in-house transactions’. However, this was explored by the Attorney General

in his earlier opinion on the same case (opinion of Advocate General Mengozzi delivered on 23 January 2014).

He considered that where a horizontal internal transaction takes place in the context of the fulfilment of

public-interest tasks incumbent on a contracting authority, and those tasks are carried out using two entities

over which it exercises the requisite ‘Teckal’ control, the rationale behind the in-house exemption, as

developed in case-law, may in principle apply. However, he pointed out that, the justification for the

application of the in-house exemption lies in the fact that the conclusion of the contract at issue is not the

result of the expression of the autonomous will of the parties to the contract, but the expression of a single

controlling will. In a horizontal internal transaction, the relationship existing between the contracting

authority and the contractor is far more tenuous than the relationship that exists in a vertical in-house

transaction. He therefore concluded, that the condition that the contract must be the expression of a single

will is only capable of being satisfied if the two entities which enter into the contract are subject to the

exclusive control of the same authority.

One would argue that in the circumstances the decision of the court in this particular instance is

understandable. The link between the two was fairly remote and the ability of the ultimate ‘parent’

contracting authority (the City of Hamburg) to control either of the separate bodies was tenuous.

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Accordingly, the basic control element was not there in order to allow for the exemption argument to even

get off the ground. It is disappointing that the court did not go on to consider the existence of the horizontal

exemption. However, the attorney general’s view is interesting in that he considered that it would only be

available where the control element comes not just from the same body but that the body exercises similar

control over both entities on an exclusive basis. It has often been argued that intra NHS contracting is

outside of the procurement regime and it is often cited that this is because of arguments based on such

bodies collectively being controlled in a ‘Teckal way’ by the DoH. This case would seem to further

undermine that argument even without the obligations contained in the National Health Service

(Procurement, Patient Choice and Competition) (No. 2) Regulations 2013. So, an interesting case, although

the drafting in the new directive may be more helpful in providing for horizontal transactions in the longer

term.

Peter Ware | 0115 976 6242 | [email protected]



In a recent case1 referred to the ECJ by an Italian court, the ECJ ruled on the time limits for bringing a

challenge under the Utilities Directive. The principles applied by the ECJ are relevant to challenges brought

under the Public Sector Directive also however.

The authority concerned launched an open tendering procedure for the award of a four-year contract for

cleaning and disinfecting work on its sewage system and awarded the contract to an ad hoc tendering

consortium on 6 July 2011.

In October 2011, the consortium informed the authority that one of its members had withdrawn, but that it

still wished to take up the contract and that it still complied with all technical and economic requirements.

The authority authorised the withdrawal and the contract was concluded on 17 April 2012 with the ad hoc

tendering consortium in its new reduced composition.

An unsuccessful bidder brought an action, notified on 17 May 2012, challenging the tender documentation of

the contract award procedure in question. In particular, it challenged:

1. The decision to approve the alteration of the composition of the successful consortium.

2. The fact that the authority failed to exclude from the tender procedure a competing undertaking

placed ahead of the unsuccessful bidder (the second placed bidder).

The relevant Italian law provided that actions challenging the documents in procedures for the award of

public contracts are to be brought within 30 days of receipt of the contract award notice. The Italian court

asked the ECJ whether the time allowed for bringing an action for the annulment of the award decision

starts to run again where the authority adopts, after the expiry of that period, a decision which may affect

the lawfulness of the award decision in question.

The ECJ noted that the principle of legal certainty requires that information obtained by an unsuccessful

bidder under the Utilities Directive and information that could have been obtained, can no longer serve as a

basis for an action brought by the tenderer after the expiry of the period of time laid down by national law.

However, it noted that the decision authorising the change in composition of the successful consortium

related to events which happened after the contract had been awarded and after the expiry of the 30 day

period for bringing an action laid down by national law. It was not, therefore, possible for the unsuccessful

1 Idrodinamica Spurgo EU C:2014:307

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bidder to be aware of those events on the basis of either the award decision and the reasons underlying that

decision, or the reply given to a potential request for detailed information submitted to the authority.

The ECJ cited Uniplex2 stating that the period for bringing legal proceedings starts to run only from the date

on which the claimant knew or ought to have known of the alleged infringement. It also cited Wall3 stating

that the decision authorising the change in composition of the consortium to which the contract had been

awarded necessitates an amendment of the award decision which may be regarded as substantial if, in light

of the particular features of the tender award procedure in question, it alters one of the essential elements

that were decisive in the adoption of the award decision.

In the circumstances, the ECJ concluded that the 30 day period for bringing an action against the award

decision must start to run again in order to permit the examination of the lawfulness of the authority's

decision authorising the change in the composition of the successful consortium. It was held that the period

should start to run from the date on which the bidder received communication of the decision authorising

the change in composition of the consortium or the date on which it became aware of that decision.

As for the complaint alleging that the second placed bidder should have been excluded because of a false

declaration submitted during the tender process, it was noted that the alleged irregularity must have

happened before the decision awarding the contract was adopted. It was held that there was no reason for

the time limit to be run again on this point as, on the basis of the information it had already received and

further information it could have obtained through ordinary due diligence, it could have commenced

proceedings.

The case serves as a reminder that the ECJ is unlikely to look kindly on challengers who do not make at least

some effort to obtain information relating to an alleged breach where that information is readily available.

Contracting authorities should also note the risks involved when dealing with a winning consortium bidder

post contract award, in particular the increased risk of challenge where changes to the composition of the

bidder are consented to.

Steven Brunning | 0115 934 2056 | [email protected]

2 Uniplex (UK) EU C 2010:45 paragraph 32 3 Wall C-91/08 EU C:2010: 182 paragraphs 38,39,42 and 43



The Fixed-term Employees Regulations came into force in 2002 (the Fixed-term Work Directive). The

Directive was designed to prevent the less favourable treatment of fixed-term employees as compared to

permanent employees. These regulations only apply to employees, and not to other workers. Only those

working under a contract of employment will be protected so for example apprentices, agency workers

working via a temporary work agency and students on work experience for up to a year as part of a higher

education course are excluded.

Contracts for less than three months

Since the Fixed-term Employees Regulations came into force, employees recruited on contracts to complete

specific tasks which are expected to last three months or less have a right to receive a minimum notice

period of one week if their contracts are terminated before the expected expiry date and they have

completed at least one month’s continuous service. They are also now obliged to provide you with at least

one week's notice of early termination. Longer notice periods are likely to be in place for fixed term

employees working three months or longer.

So what does less favourable treatment mean?

Less favourable treatment can occur where a fixed-term employee is given different contractual terms to a

permanent employee or where a particular benefit is provided to a permanent employee but not to a fixed-

term employee, whether or not the benefit in question is contractual. An example of this may be childcare

voucher scheme or other salary sacrifice benefits staff get.

The regulations make clear that the right not to be treated less favourably will only apply if the treatment is

on the grounds that the employee is fixed-term and secondly, that the treatment is not justified on

objective grounds. So you would need to demonstrate a good business reason for less favourable treatment

and show you have acted proportionately.

Some relevant examples are that fixed-term employees:

• should not be excluded from enhanced contractual redundancy payment schemes without a legitimate

reason

• should have the same opportunity to receive training and be informed of and secure permanent positions

in the organisation

• should have access to occupational pension schemes on the same basis as permanent staff unless

different treatment is objectively justifiable (on a case-by-case basis).

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Successive Fixed Term Contracts

Under the Fixed-term Employees Regulations, employees who have been continuously employed for four

years or more on a series of successive fixed-term contracts are automatically deemed to be permanent

employees unless the continued use of a fixed-term contract can be objectively justified. This has been in

place since 10 July 2006.

It is important to note that a gap between two contracts does not necessarily break continuity or prevent

there being a renewal.

Less favourable treatment claims

Fixed-term employees who believe that they are being treated less favourably than permanent comparators

on the grounds of their fixed-term status can bring claims in the employment tribunal within three months of

the date on which the less favourable treatment or detriment took place (or within three months of the last

in a series of dates if there was a series of discriminatory acts, subject to the rules on early conciliation).

There is no limit on the compensation which can be awarded for a claim for less favourable treatment but

the sum should be just and equitable and bear some connection to the financial loss suffered by the

employee as a result of the less favourable treatment.

Dismissal of fixed-term employees

Fixed-term employees, have rights as other employees, including the right not to be unfairly dismissed,

wrongfully dismissed, or dismissed for a discriminatory reason.

Unfair and wrongful dismissal during the fixed term

An employee who is dismissed before the end of a fixed term contract may have a claim for breach of

contract (no minimum service required), unless the contract contains a provision for earlier termination on

notice and the organisation has complied with that provision, or the employee is dismissed for disciplinary

reasons. The organisation may have to pay damages up to the sums the employee would have earned during

the remainder of the term.

Non-renewal of contract constitutes dismissal

Expiry of a ‘limited-term contract’ without renewal under the same contract counts as a dismissal for unfair

dismissal and redundancy purposes, as well as the right to receive a written statement of reasons for

dismissal.

Any employee whose limited-term contract expires without renewal on the same terms as before will

therefore have the same employment protection rights as a permanent employee with the same length of

service who has been dismissed. You should therefore be careful how you handle the expiry of fixed-term

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contracts. But to make a claim for unfair dismissal the fixed term employee would need to have two years’

service.

Dealing with the expiry of a fixed-term contract

Reason for non-renewal

For a dismissal to be fair (and assuming the employee has two years’ service), it must be for one of the

potentially fair reasons set out in the Employment Rights Act 1996 (ERA 1996):

• capability

• conduct

• redundancy

• contravention of a statutory obligation

• some other substantial reason of a kind such as to justify the dismissal of an employee holding the

position which that employee held (SOSR).

You need to consider which reason you are relying on in good time before expiry of the contract, and you

will need to follow a fair procedure. In many cases, the non-renewal of a fixed-term contract will be

potentially fair by reason of redundancy, but in other cases there may be a different valid reason, depending

on your reason for using a fixed-term contract in the first instance, or the performance or conduct of the

employee concerned. The usual ‘band of reasonable responses’ test will apply to whether it is fair to dismiss

for that reason and we are on hand to support you with this.

You should note that, if redundancy is to be relied on, you may have to look for suitable alternative

employment for the employee and will have to make a redundancy payment if the employee has two years'

service or more. You should also consider the usual redundancy issues, including whether the pool for

redundancy selection ought to be widened so that other employees may be involved, time off for job search,

trial periods etc.

In Greater Glasgow Health Board v Lamont UKEATS/0019/12, the Scottish Employment Appeal Tribunal (EAT)

confirmed that where a fixed-term contract is used to cover the absence of a permanent employee, and the

permanent employee returns to the same position, the expiry of the fixed-term contract will not be

regarded as a redundancy. This is potentially relevant when covering maternity or long term sickness. So

here you will be able to rely on ‘some other substantial reason’ as a potentially fair reason where the fixed-

term employee is replacing an employee who is absent on family-related leave or due to suspension on

medical or maternity grounds, the fixed-term employee is dismissed to allow that person to return to work

and the fixed-term employee was informed at the outset that their employment would terminate on that

employee's return to work.

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Is notice required?

At common law, a ‘pure’ fixed-term contract will terminate automatically at the end of the term without

the need for notice on either side. However, you should not assume that this is the case with every fixed-

term contract. Some fixed-term contracts do in fact contain a notice clause and may require notice to be

given before termination can take place.

In other cases there may be a term implied by workplace custom and practice that notice is always given in

advance of the expiry of a fixed term, or there may be a collective agreement with a trade union, specifying

a requirement to give notice, that has been expressly or impliedly incorporated into the employee's fixed-

term contract.

Failure to give the required notice might result in you being required to pay an employee in lieu of notice, or

continue to employ them during the notice period even if the fixed-term has expired.

So it may be advisable for you to include a clause in the fixed-term contract to that allows you to terminate

‘without the need for further notice’ on a particular date (or the occurrence or non-occurrence of an event,

or the completion of a task) so that the organisation is protected in the event that you forget to give notice.

We can support you with the relevant contract clause.

Extending the contract

If for whatever reason you continue to employ the employee beyond the expiry date of the fixed-term

contract, the parties must agree new terms or the law will imply them. Often you will agree a short

extension and the contract will continue on the same terms as before until the new agreed date or event.

However, where nothing is said about the period of the extension, the likely implication is that the

employee would be employed permanently rather than fixed term. Don’t let this happen by default.

Ending a fixed term contract fairly (where two years’ service applies)

1. Ensure that systems are in place so that you are aware of the dates on which any fixed-term contracts

are due to expire and their notice obligations under these contracts.

2. Discuss the expiry of the contract informally with the employee in advance of the expiry date to

manage their expectations and seek to agree a date and time for a meeting to take place (before the

expiry of the contract).

3. A letter should be sent to the employee, specifying the date on which the fixed-term contract is due to

expire and providing an explanation of the reason that a fixed-term contract has been used in the

particular circumstances and the reason for the expiry of the contract. The letter should invite the

employee to a meeting to discuss the expiry of the contract and give details of the time and place of

11

that meeting. Ideally, you should allow the employee the right to be accompanied by a work colleague

or trade union colleague.

4. You should also discuss any permanent vacancies within the organisation. Perhaps you could attach a list

of any available vacancies with the letter (even if they do not appear suitable).

5. A meeting should be held without unreasonable delay and before the fixed-term contract expires. Both

the organisation and employee must be able to outline their views, with the organisation recapping on

the background to the expiry of the contract and the employee being given the opportunity to comment

or make suggestions. Whatever the outcome of this meeting, a second letter should be sent to the

employee either confirming the date of the expiry of the contract or setting out any alternative decision

reached, and offering the employee the right to appeal the decision within a specified (reasonable)

timescale.

6. You can offer a right of appeal and if an appeal hearing is held, the employee will have the right to be

accompanied by a colleague or trade union representative. Following the appeal the organisation’s

decision should be communicated in writing to the employee.

It is also good practice to follow this process for fixed term employees with less than two years’ service

although they do not have a right to make a claim for unfair dismissal.

Drafting fixed-term contracts

When drafting fixed-term contracts you should always consider including a provision allowing early

termination on notice, so that it will be possible to dismiss the employee before the expiry of the contract

should this become necessary. If there is no notice provision and the contract is terminated early, the

employee could arguably claim damages for loss of earnings during the remainder of the contract.

So here is your checklist for dealing with fixed-term employees:

• review your contract terms and benefits offered to fixed-term employees, looking out for any

differences to those offered to permanent staff. Differences in treatment in organisation should also be

reviewed. Seek advice from your HR consultant if you identify differences so you can seek to make any

necessary changes or objectively justify any differences

• keep records of the steps taken to compare and calculate differences in benefits

• implement a diary system for monitoring the operation of fixed-term contracts, so that consideration

can be given, in advance, to whether the contract will be renewed. If it will not be, follow a fair

procedure to end the contract

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• ensure that any permanent vacancies are centrally co-ordinated so that a ‘vacancy list’ can be prepared

and included with the letter notifying the employee of non-renewal, where appropriate. The list should

also be displayed on any staff intranet or notice board and be available from the HR administrator or

manager

• if the contract has already been renewed and the employee has reached four years' service (or will

reach four years' service before the contract expiry date), consider whether there were objective

grounds at the time renewal took place for the continued use of a fixed term, and record those grounds

or issue a permanent contract

• where an employee achieves permanent employment status, send a written statement of variation to

the employee

• consider including a provision for termination by notice clause in your fixed term contract

• review your contract clauses to ensure that you and the employee are clear about termination. A clause

such as ‘This contract will end on [DATE] without the need for further notice, unless extended’ means

there is no confusion on notice for example. It is however still good practice to notify the employee in

advance of the end date.

Peter Jones | 0115 976 6180 | [email protected]



Important changes to the law on employment tribunal claims took effect on 6 April 2014. The changes relate

to the early conciliation by Acas of workplace disputes that could ultimately result in employment tribunal

claims if not resolved.

The introduction of early conciliation means that, from 6 May 2014, before being able to submit a relevant

claim to an employment tribunal, a prospective claimant must contact Acas (the body that conciliates in

large-scale industrial disputes and most individual employment disputes). While a potential employment

tribunal claimant must contact Acas (and he/she cannot proceed with a tribunal claim without an early

conciliation certificate showing that he/she has done so), there is no obligation on either party to

participate in early conciliation.

Early conciliation is voluntary for a transitional period from 6 April to 5 May, meaning that some potential

claimants may choose to contact Acas for early conciliation before 6 May, even though it is not compulsory

until that date.

What early conciliation means for you

Traditionally, you may hear for the first time about a potential employment tribunal claim when you receive

the employment tribunal claim form (known as an ET1) setting out the details of the claim or

correspondence from the individual's legal representatives showing what legal action the individual is taking.

The individual raising the complaint could be a current employee, but is also commonly an ex-employee (for

example, claiming unfair dismissal or discrimination over the way in which he/she was dismissed) or a job

applicant (for example, claiming discrimination in relation to your recruitment selection process).

A fundamental difference under the early conciliation regime is that you may first be alerted to a potential

employment tribunal claim through an approach from Acas, rather than through receiving an ET1 or legal

correspondence.

Why you need to know about early conciliation

It is very important that anyone who is contacted by Acas through the early conciliation regime about an

employment dispute understands the importance of dealing with the initial contact properly. You should

treat an informal approach from Acas as seriously as you would take a formal legal communication and also

ensure that relevant staff understand this too.

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In the first instance, the initial recipient will contact the organisation who must be involved as early as

possible in the process so that they can assess the merits of the complaint and decide whether or not to

participate in early conciliation. When this happens, speak to your HR Consultant straight away.

The purpose of early conciliation is to prevent a workplace dispute that may be resolved swiftly from

escalating into potentially costly and time-consuming employment tribunal proceedings. It is therefore vital

that the individual who receives first contact from Acas about early conciliation passes the details of the

dispute on to the individuals who would be responsible for managing any subsequent tribunal claim. At this

stage, the initial recipient must not discuss the details of the dispute with anyone other than these

individuals.

What happens after Acas makes contact about early conciliation

Assisted by us you will:

• contact Acas for any further details that are needed of the complaint and to let Acas know when the

organisation is likely to have made a decision about participating in early conciliation (Acas will expect a

response from the organisation within a matter of days)

• assess the likely strength of the individual's potential employment tribunal claim and how much the

employment tribunal might award the employee if he/she is successful in the tribunal

• estimate the potential legal costs and management time of defending an employment tribunal claim, as

opposed to reaching an early settlement

• consider whether or not the individual is willing and able to bring an employment tribunal claim

(particularly with the requirement to pay a tribunal fee or apply for remission of the fee)

• look into potential non-monetary solutions that the organisation could offer the individual to prevent a

tribunal claim (for example, an action that could be taken quickly to fix the situation such as an

amendment to one of the organisation's policies)

• examine the wider impact that drawn-out employment tribunal proceedings could have on the

organisation (for example, any potential damage to reputation).

Once the relevant parties have discussed these issues, you will contact Acas to let it know whether or not

the organisation is willing to engage in early conciliation and, if it is, to discuss with Acas the next steps in

the early conciliation process.

What SLT and HR should avoid

At no stage should individuals who know about the contact from Acas take matters into their own hands and

attempt to resolve the issue raised by Acas. In organisations for example, that will be a matter for the

Head/Principal in conjunction with governors/board members, who will decide what the organisation should

do about the issue.

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To avoid an additional potential claim of victimisation, the individual seeking early conciliation should not

be penalised in any way. If he/she is still an employee at the organisation, this includes any form of

intimidation or other detriment on the basis of having contacted Acas with a complaint. If he/she is a former

employee, this includes refusing to provide, or providing a poor, reference to him/her on the basis of having

contacted Acas. As such action could open the organisation up to a further claim of victimisation; the

perpetrator may face disciplinary action.

Peter Jones | 0115 976 6180 | [email protected]



Clarification on their role

Judgment was handed down on 2 May 2014 in the case of JF v NHS Sheffield [2014] EWHC 1345 (Admin). This

was one of the first cases since the introduction of Clinical Commissioning Groups (‘CCG’) in April 2013 to

challenge the way in which NHS services are commissioned.

Background

The claimant has complex health care needs, including significant respiratory problems; but what makes her

case more complicated is that she acquired a brain injury as a result of a road traffic accident when she was

a child and she now suffers from learning difficulties and bipolar affective disorder. For this reason the claim

was brought on behalf of the claimant by her litigation friend RW.

The claimant is in receipt of a NHS Continuing Healthcare package (‘CHC’) funded by NHS Sheffield Clinical

Commissioning Group (‘the CCG’). This has enabled her to live at home for much of the time since July 2012.

A constituent part of her package when at home is that 1:1 supervision and support is provided 24 hours a

day. However due to her health care issues she is frequently admitted to Sheffield Teaching Hospitals NHS

Foundation Trust (‘STH’). STH is contracted by the CCG to provide medical services under the standard

national commissioning contracts, which include the NHS Standard Conditions.

A relative of the claimant alleged that a number of incidents occurred whilst the claimant was admitted to

STH which have put the claimant’s life in danger. Incidents included the claimant, who has been assessed as

nil by mouth, being able to take food from other patients before hospital staff could restrain her.

Accordingly it is alleged that a higher level of supervision of the claimant is required whilst she is admitted

to hospital.

Prior to living at home she resided at a care home during which time, when admitted to STH, her carers

would go with her and stay for the duration of the admission. Since she has returned to live at home, the

carers provided by the CHC package that was provided to enable her to live safely at home have not stayed

with her during her admissions to hospital.

The claimant argued that her carers should stay with her whilst she was admitted to STH as they are familiar

with her complex care needs and made a request to the CCG for her carers to stay with her for the duration

of her stay. The claimant asserts that her carers should be allowed to remain with her due to her being

assessed as needing 1:1 supervision in the community.

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The claim

Initially the CCG declined to provide support on the basis that it would be ultra vires and the claimant

challenged this by way of judicial review. The CCG later accepted that it had the ability in ‘exceptional

circumstances’ to provide additional support. The claimant requested that the CCG make a decision under

its exceptional circumstances policy.

The CCG decided that the claimant would not routinely receive her usual CHC funded package whilst in

hospital for a number of reasons but primarily because STH had been commissioned to provide the necessary

care. There was no indication that STH was unable to provide the required care to JF and to allow the carers

to stay would be an unnecessary use of resources. The CCG’s decision was challenged on three main grounds,

however the key question in the case was; which public body bears responsibility for assessing the claimant’s

needs in hospital, with a view to arranging appropriate support?

The legal framework

The obligation to commission health services (including NHS Continuing Healthcare) is imposed on CCGs by s

3 of the National Health Service Act 2006 (‘the 2006 Act’), which provides:

“(1) A clinical commissioning group must arrange for the provision of the following to such extent as it

considers necessary to meet the reasonable requirements of the persons to whom it has responsibility -

(a) hospital accommodation,

(b) other accommodation for the purpose of any service provided under this Act,

(c) medical, dental, ophthalmic nursing and ambulance services,

(d) …

(e) such other services or facilities for the prevention of illness, the care of persons suffering from

illness and the after-care of persons who have suffered from illness as the group considers are

appropriate as part of the health service,

(f) such other services or facilities as are required for the diagnosis and treatment of illness.

(1A) For the purposes of this section, a clinical commissioning group has responsibility for -

(a) persons who are provided with primary medical services by a member of the group, and

(b) persons who usually reside in the group’s area and are not provided with primary medical services

by a member of any clinical commissioning group.

(c) …”

Section 9 of the 2006 Act provides the mechanism by which CCGs may commission health services. Section

9(1) of the 2006 Act defines ‘NHS contracts’ as “arrangements under which one health service body (“the

commissioner”) arranges for the provision to it by another health service body (“the provider”) of goods or

services which it reasonably requires for the purposes of its functions.”

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The CCG is a commissioner and the STH is a provider within the meaning of s 9(1). The CCG contracts with

the STH for the provision of hospital services, as envisaged by s 9(1).

Responsibility for assessing the claimant’s needs in hospital

The issue of who has responsibility for assessing the claimant’s needs in hospital, with a view to arranging

appropriate support, goes to the very heart of the current commissioning regime. The judge in JF confirmed

the views of the CCG, STH and NHS England, namely that it is not for the CCG to govern in what manner the

hospital will address and meet the needs of the patient on admission.

The judge in JF confirmed that this was the case even when a CCG had made an assessment as to a person’s

needs pursuant to a CHC package. A CCG will determine what care is required as part of a CHC package in

the community. It does not follow that the same care is required in a hospital setting.

If the claimant’s arguments had been upheld then it would have meant that despite contracting with

hospitals to provide care, CCG’s would be required in some circumstances to undertake an assessment of the

care which should be provided by a hospital. In effect the CCG would be regulating the hospital, restricting

the hospital’s ability to exercise its professional judgement. This is a role which we successfully argued was

not appropriate for the CCG.

The judge in JF concluded that CCG’s were entitled to use the contracts put in place with hospitals, which

provided mechanisms for hospitals to make requests for additional information if needed, to discharge their

duties pursuant to section 3 of the NHS Act 2006.

The JF case confirmed that it was for the hospital not a CCG to determine what care is required in hospital.

However hospitals need to be alive to the potentially complex requirements of disabled patients and

whether additional measures need to be put in place. As the judge commented, mental disability imposes

additional requirements upon the hospital to ensure that needs are understood and met. CCG’s should

ensure that they are able to provide a quick response to requests from hospitals for additional information

and/or resources regarding a disabled patient to enable a continuous high level of care to be provided to

patients.

The judge in JF emphasised that if concerns were had regarding the quality of care provided to the patient

then the hospital’s complaint procedure should be utilised. He also highlighted the existence of the private

law duty of care and that injunctive relief against a hospital was a possible remedy before any harm had

actually come to a patient.

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Conclusions

The case of JF confirms the role of hospitals and CCG’s in the current commissioning regime. It identifies

that complaints about care provided to patients whilst admitted to hospital should be raised directly with

the hospital. JF is useful for CCG’s who find themselves having to defend claims which have been incorrectly

brought against them, rather than the provider.

However the case of JF also highlights the potential additional complexity involved in treating those with a

mental disability and that in some situations additional resources may need to be provided by the CCG at the

request of the hospital.

Ben Standing | 0115 976 6200 | [email protected]



The impact on local authorities

Planning and Development Minister Nick Boles’s comments on the government’s new ‘Right to Build’

initiative received widespread media coverage this month.

Originally announced in the Chancellor’s March 2014 Budget, the initiative aims to create a new statutory

right for self-builders to purchase a plot from local authorities, and to make available a £150 million

repayable fund to help provide an initial 10,000 serviced plots for self-build.

It is designed to increase the number of self-build homes constructed in the United Kingdom to help combat

the country’s housing shortage. It has been hailed by Mr Boles as the heir to Margaret Thatcher’s ‘Right to

Buy’ scheme and is envisaged to be ‘an electric shock to the system’. Currently approximately 10,000 self-

build homes are built every year in the United Kingdom which accounts for 8% of new builds. The

government is keen to see this figure rise to 50,000 bringing us more in to line with countries such as the

Netherlands where 50% of all new houses are self-built.

Consultation has yet to take place and firm details of the initiative have yet to be released. However,

speaking at the Grand Designs Live show on 6 May, Mr Boles revealed how he expected the new scheme to

work:

• self-builders would formally register for a new building plot with their local authority. Only people who

had lived in a local authority area for two or three years would be eligible to register, and they might

also need to prove they have the resources to buy a plot once the local authority makes them available

• local authorities will need to make an assessment of the level of demand for self-build in their areas and

make available suitable building plots to match demand. The proposed £150 million repayable fund will

help enable local authorities to secure such plots, including acquiring land if necessary and ensuring that

the plots are serviced

• once suitable plots become available to interested self-builders on the register, they are to be offered at

full market value

• if local authorities do little or nothing to secure suitable building plots those on the register would be

able to ‘sue’ that local authority. Mr Boles stated “It has got to be a legal right to get a plot of land to

build your house. We need lots of people out there in a position to say “it’s my land, give it to me and I

will sue you if you don’t”.

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Whilst putting some flesh on the bones of the policy, this still leaves many questions unanswered: How will

local authorities be expected to assess demand for self-builds? What will be deemed to be ‘suitable building

plots’? Will those plots be purely reserved for those entrants on the register or open to bids from

developers? How will the statutory ‘right to build’ be defined? How long will the local authority have to

offer a plot? What will be the remedies and penalties for breach? If a person has purchased a plot how long

will be given prior to completion of the house? Will there be any restriction in relation to sale of such

properties to prevent commercial developers from acquiring them prior to construction commencing?

Doubtless DCLG are seeking legal advice upon these issues and probably many others.

The government is planning on publishing a formal consultation document this summer. Hopefully this will

answer many of the outstanding questions. Nonetheless, commentators have acknowledged that local

authority engagement and co-operation is crucial to the success of the scheme. A spokesperson from the

National Self Build Association stated “we don’t want councils rejecting the ‘Right to Build’ because they

see it as being onerous and difficult to deliver. It’s vital that they welcome it, that they appreciate the

benefits it brings in terms of the additional new housing it will provide, and that it complements the new

housing that the volume house-builders deliver.”

The initiative is not seen as a ‘quick fix’ but a long term strategy. Even if, following consultation, the

scheme is approved it is unlikely to be something which will come into force with this current government.

Rather, the idea is expected to be a key element of the Conservative’s 2015 Election Manifesto, to be rolled

out should they secure a second term.

Even so, this has not stopped detractors from questioning the potential success and merits of such a

scheme. Mr Boles acknowledged that part of the problem facing self-builders was the lack of suitable and

affordable land. Whilst the government is also looking to make the ‘Help to Buy: equity loan scheme’

available for self-build, the proposals currently allow for plots to be sold at market value. This does not

remedy the unaffordability of land and leaves self-builders at risk of being outbid by developers operating

on economies of scale. Furthermore, the current proposal raises the possibility that prospective self-

builders may not only have to pay market rates, but legal costs too, making it even less affordable.

In any event, the initiative seems to be firmly on the political agenda for the moment. Whether or not it

provides ‘an electric shock to the system’ and how it will affect local authorities remains to be seen.

Will Thomas | 0115 934 2007 | [email protected]

public matters newsletter, may 2014

Government & Nonprofit