Case - Palmer v. East and North Hertfordshire NHS Trust

[2006] Lloyds Med Rep 472 (HC), Queen's Bench Division - Lord Hendy QC, Mark Sutton QC

An NHS trust had acted in breach of contract by withdrawing from a process whereby a surgeon was being assessed by the National Clinical Advisory Service.

The applicant consultant surgeon (P) applied for an injunction restraining the respondent NHS trust from, firstly, breaking what he considered to be its contractual obligation to adhere to an assessment conducted by the body now known as the National Clinical Advisory Service (NCAS) and, secondly, purporting to commence or continue any disciplinary process in respect of the issues that had given rise to the assessment. The trust had raised with P concerns that, among other things, he had been operating outside his area of experience and had failed to obtain patients' informed consent. The parties agreed that P should undergo an assessment by the NCAS. The aims of the assessment were to clarify any areas of concern, identify factors that might be contributing to those areas of concern and make recommendations for addressing any difficulties identified. The NCAS terms of reference were signed by both parties in the early part of 2005. It had earlier been agreed at a meeting between the parties in March 2004 that, with the assistance of the NCAS, P would be found a suitable clinical attachment for a period of six months, and that the trust would forego disciplinary action relating to any matters that had occurred before the date of the meeting. In July 2005, the trust decided, without informing P, to withdraw from the assessment process on the basis that a clinical placement had not been found for him. In the middle of August, P wrote to the trust stating that a suitable placement had, "subject to final confirmation and agreed arrangements", been found for him. However, at a meeting on August 19, the trust informed P that it was withdrawing from the assessment and that a formal investigation under the trust's disciplinary procedure would be commenced. P argued that the agreement reached in March 2004 was contractually binding, that the trust had breached the agreement, and that, in any event, the trust's conduct in unilaterally terminating the agreement was capricious and unfair such as to amount to a breach of the obligation of mutual trust and confidence that was implied into every contract of employment. The trust argued that the terms of the agreement were too uncertain for there to have been a binding contract, that there had been no consideration, and that, if a contract had been entered into, it had been discharged by frustration.

HELD: The parties had intended that the agreement, comprising the matters agreed in principle in March 2004 and the agreed terms of reference, should be contractually binding. The fact that the identity of a hospital willing to accept P's placement for an assessment had not been established by the date of the agreed terms of reference did not create any uncertainty as to the material terms of the contract itself; it was a contingency that had to be satisfied in the due performance of the contract. It was true that there was no express provision in the agreement that specified the party who had the main responsibility for securing a clinical placement for P. However, that was not an uncertainty as to the terms of the contract; rather, it was an indication that each of the parties had a responsibility for securing such a placement. Further, P's agreement to submit to a temporary change in workplace, undergo a period of assessed practice in a different hospital and take part in an assessment for which consent was obligatory constituted sufficient consideration. The contract was legally binding and still subsisting when the parties met in August 2005. P had done everything within his powers to fulfil his part of the agreement, and there had been no justification for the trust's decision to withdraw from the assessment process. Moreover, the contract had not been frustrated; that argument was an attempt at an ex post facto justification for a precipitate decision taken by the trust without regard to its contractual obligations. And whether or not the agreement for an NCAS assessment was contractually binding, the trust's conduct in unilaterally terminating the agreement without good reason was both capricious and unfair such as to amount to a breach of the obligation of mutual trust and confidence that was an implied term of P's contract of employment.

Application granted.
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