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PDS agreements: termination provisions - note on the judgement of Mr Justice Collins in the Crouch case

The Crouch judicial review proceedings were heard on 25/26 February 2008 in the Administrative Court at the Royal Courts of Justice by Collins J.

Mr Crouch challenged the legality of a clause in his PDS agreement allowing the PCT to terminate the agreement at any time.  This clause was inserted in the agreement pursuant to paragraph 67 of Schedule 3 to the National Health Service (Personal Dental Service Agreements) Regulations 2005 (“PDS Regulations”). 

A PCT is required under the PDS Regulations to include a clause that has the same effect as paragraph 67 of Schedule 3 to the Regulations.  This paragraph provides -

"67(1) The Relevant Body may terminate the agreement by serving notice in writing on the contractor at any time.
(2) where notice is served pursuant to sub-paragraph (1), the agreement shall terminate on the date provided for in the agreement.”

The purpose of this paragraph is to allow PCTs to terminate PDS agreements provided notice is given in writing, following the notice period contained in the agreement. Contractors have a similar right to terminate the agreement without cause in the PDS regulations, and in the PDS agreements.

The Court has re-interpreted paragraph 67 of Schedule 3 to the PDS regulations, the paragraph underpinning the challenged termination clause, as being merely a procedural provision relating to termination of agreements.  What the court has said is that the way in which paragraph 67 is drafted means that it can only be interpreted to have procedural effect.  The effect of the judgement is that the current provision cannot be interpreted as a termination without cause provision, nor can this provision be relied upon to underpin a termination without cause clause in a PDS agreement while this judgement stands. 

The Department has yet to consider the formal judgement in this case which we expect to be handed down in early March.  The Department will take a view on how best to deal with this judgement and at that stage further information regarding the Department's views will be available.