A group of PMS practices from London challenged their PCT's right to unilaterally axe their PMS contacts, after a dispute over variations inserted into their contracts.
They also argued that before they entered the 2004 PMS agreement, they were ‘led to believe they were permanent’.
The High Court ruled in favour of the PCTS, retaining their right to axe contract with six months notice.
The ruling will have significant consequences for 40% of practices on PMS contracts.
The High Court ruling said: ‘In 2010 the PCTs unilaterally changed the (PMS) contracts so as to include provision which would permit the contracts to be terminated on six months notice.
‘The PCTs did so in response to regulations which were made by the secretary of state for health on 3rd march 2010 and came into force on 1st April 2010.’
Lawyers acting on behalf of the GPs from Greenwich and Havering argued that the legislation which the secretary of state used to create the termination clause in the PMS contact (the National Health Service Act 2006) did not permit him to make regulations of this type.
‘Furthermore, the claimants argue that, before they enter into the PMS agreement 2004, as a result of things said by the secretary of state, they were led to believe they were permanent,’ the judgement said.
The judge presiding over the case, the right honourable justice Nicol, ruled in favour of the PCTs. He said ‘the arguments which the Claimants raised had not succeeded.'
‘In my judgement the claimants have not shown a reasonably arguable case,’ the judge said.
Dr Jane Lothian is secretary of Northumberland LMC and the practices she represents almost all have PMS contracts. She said that the termination clause had been used by PCTs to insert variations in the past and would continue to be used in the future.
‘It has in the past been used to sway outcomes of negotiations,’ she said. ‘I cannot see that it won’t be used again.’
Dr Lothian warned that the definition of what is 'reasonable grounds' to terminate a PMS contract is ‘open to interpretation’.
‘It can be anything from saying someone is struck off to saying someone has not fulfilled their QOF requirement,’ Dr Lothian said.
There is quite a lot of variation in what could be interpreted as a ‘serious misdemeanour’ in primary care, Dr Lothian said.
The PCTs right to axe PMS contracts is not a new clause, Dr Lothian said but at least the High Court ruling has put something in writing, restricting PCTs to having "reasonable grounds".
‘Before there wasn’t even that,’ she said.