On May 25, 2010, Mr Justice Hickinbottom handed down a very important judgement (David Tomkins v Knowsley Primary Care Trust [2010] EWHC 1194 (QB) on fundamental principles concerning dental contracts. In the first breach of contract claim to be determined in the High Court of Justice on issues concerning dispute resolution, remuneration, entire agreement clauses, and entitlement to payment, David Tomkins won his battle with the PCT. He was awarded damages in the sum of £533,205, inclusive of interest, and costs.
On March 28, 2006, David Tomkins and the PCT had entered into a general dental services contract with an aggregate annual contract value of £437,960. Of that figure £100K was attributable to another dental practice whose work David Tomkins had agreed to take on. In discussions leading to the signing of the GDS contract, the parties had been unable to agree a figure for the annual contract value, which was based on a dentist’s earnings during a ‘baseline period’ running from October 1, 2004 to September 30, 2005.
Mr Tomkins raised concerns that the data for the baseline period was not a true reflection of his practice’s current and continuing workload and capacity as some data concerning the work of an associate was missing, and the associate had commenced work mid-way through the baseline period.
On March 22, 2006, the parties signed a supplementary agreement based on the standard form agreed between the health department and the British Dental Association. It recorded that they were not in agreement as to the contract value, that they would continue to seek agreement on that issue and that the PCT would take into account the work done by David Tomkins’ associate in the six months after the end of the official baseline period.
In May 2006, the PCT informed Mr Tomkins that it was not prepared to pay any additional money in respect of the associate’s earnings, on the grounds that they did not have the funds to pay for the additional work. Mr Tomkins appealed to the local arbitration panel, which found against him. Mr Tomkins then appealed to the Family Health Services Appeal Authority (the Appeal Unit), which upheld his case in relation to the reference period for the associate’s earnings, during the ‘baseline period’.
The Appeal Unit determined that the PCT must recalculate those
earnings in relation to the extended period, and the PCT did so, with the effect of increasing the contract value by some £127K. However, the PCT then set off against that sum the £100K which it had agreed to grant Dr Tomkins in respect of the dental practice whose work he had taken on.
Despite his legal costs being in excess of £100K, David Tomkins decided to fight on.
Hickinbottom J summarised Mr Tomkins’ claim as follows: ‘On 28 March 2006, the Trust and Mr Tomkins entered into a contract. Whilst there remained an outstanding issue between them - namely the contract value that should properly be attributable to the associate given that (i) some data concerning that work was missing, and 20 (ii) he commenced work mid-way through the baseline period - the parties had agreed a mechanism for determining that issue if it could not be resolved by agreement, ultimately by a reference to the Appeal Panel under Regulation 8. Consequently, that issue being outstanding did not render the contract ineffective for uncertainty or otherwise. Until the issue was resolved, the parties agreed that Mr Tomkins would be paid in accordance with the figures set out in the GDS Contract they had signed: but, after the issue had been determined, the figures for the contract value and UDAs would be re-valued retrospectively to 1 April 2006, if the determination so required. The contractual mechanism has been duly operated and has determined the outstanding issues: and, in accordance with the agreement of the parties, the contract value and the UDA value have been recalculated by the Trust accordingly. That recalculation is not in issue. The contract has operated properly: and the Trust cannot unilaterally vary the contract by depriving Mr Tomkins of £100K for the period from 1 April 2006 to date, in the manner that they it purported to do in its chief executive’s letter of 22 March 2007. By that deprivation, the Trust is in breach of contract.’
The PCT defended the claim on numerous grounds, including:
- the parties lacked the necessary intention to enter into a contract,
- essential terms had not been agreed,
- the entire agreement clause excluded the admissibility of any evidence to contradict the contract value,
- the Appeal Unit had no jurisdiction to deal with the dispute,
- the PCT would be in breach of duty (Section 230(1) of the National Health Service Act 2006) if it were to pay the sums claimed by Dr Tomkins.
Handing down the judgement, Hickinbottom J held: ‘… on 28 March 2006, the Trust and Mr Tomkins came to a legally binding and effective agreement, agreeing all terms except those that were dependent upon the issue of the associate’s atypical earnings for the baseline period used in the calculation of the annual contract value under the transitional provisions I have described. They agreed a mechanism for determining that issue, ultimately by reference to the Appeal Unit. That reference was duly made, and the issue determined. That determination was binding upon the Trust.’
Mr Tomkins said: ‘The campaign for justice has followed a long and sometimes tortuous path with many stops along the way. It has had a negative affect on my health and there have been several dark moments, but my resolve was never diminished. I never doubted that I would eventually prevail.’
He also said: ‘I hope that other dentists who have had arbitrally unfair treatment under the 2006 contract will be empowered by this verdict to seek legal advice and receive the justice they deserve.’
His solicitor, Nicola Marchant, of Pannone LLP, said: ‘This judgement demonstrates that dental contracts can be enforced in the civil courts, if the PCT has acted unreasonably and failed to comply with the spirit of the contract. The claim raised complex issues of law and as acknowledged by the judge, the defences raised by the PCT throughout the claim have been many and various.
‘It is important in the current economic climate for dentists to safeguard the contract value and reasonably pursue claims for breach of contract. Ultimately, the dentist has put in a great deal of time and resources to deliver NHS services in accordance with the contract. It is therefore important that dentists recover payments for work, whether in accordance with the contract, or as agreed between the parties.’
Dentists should not underestimate the importance of the judgement. The landmark ruling will hopefully give reassurance to dentists when pursuing claims for breach of contract. The judgement also highlights the need for practitioners to obtain expert legal advice in this complex area of law.
Eddie Crouch, who successfully challenged his own PCT over terminating contracts for no reason without notice, added: ‘I am so pleased that Mr Tomkins had the courage of his convictions to fight against unjust decisions by his PCT. If many more followed his lead, the profession would counter the unreasonable behaviour of many PCTs in trying to ride roughshod over legal obligations.’