Primary Health Investment Properties Ltd & Ors v Secretary of State for Health & Ors

Introduction

This is a claim for judicial review brought by six Claimants. The first claimant is Primary Health Investment Properties Limited (“PHIP”). The second claimant is Primary Health Properties PLC (“PHP”). The fourth to sixth Claimants, grouped together in the title to the proceedings as a third claimant, are four general medical practitioners (Dr. N.B. Turnbull, Dr. V.L. Beveridge, Dr. R.A. Elder and Dr. I.M. Wheatley) (“the Doctors”), practising together in partnership at the Hereward Medical Centre, Exeter Street, Bourne, Lincolnshire (“the Premises”). The Defendants are the Secretary of State for Health (“SSH”) and the National Health Service Litigation Authority Family Health Services Appeal Unit (“the Appeal Unit”). Lincolnshire South West NHS Teaching Primary Care Trust (“the PCT”) is joined as an Interested Party.

The Claimants challenge the dispute resolution procedure adopted under the NHS (Personal Medical Services Agreements) Regulations 2004 (and applied in this case by agreement between the Doctors and the PCT) for determining the “current market rent” of the Premises. In particular, challenge is made to the procedure for resolving the rent dispute between the parties as set out in letters dated 30 July and 14 September 2007 from the Appeal Unit to the Doctors’ surveyor.

The Claimants contend that the dispute resolution procedure fails to comply with Article 6 of the European Convention on Human Rights, because the determination of the rent is to be carried out by the Appeals Unit as the SSH’s delegate: Ground 1, Detailed Grounds, paragraph 58. Further, the Claimants say that the decision of the Appeal Unit to appoint the Chief Executive Office of the Valuation Office Agency (“CEO VOA”) to advise it on the dispute was irrational and unfair, since that also involves a breach of Article 6: ground 2, Detailed Grounds, paragraph 66. It is further argued that the involvement of the CEO VOA is “tainted” with apparent bias, on domestic principles of English law, because of the prior involvement of the DV in acting on behalf of the PCT in the initial negotiations. Although this ground of claim is subsumed in ground 2 as being founded a breach of Article 6, the Claimants have argued the point as a freestanding ground under domestic law, independent of the Convention, without objection from the Defendants.

In summary, in many cases general medical practitioners (like the Doctors in this case) enter into agreements with Primary Care Trusts to provide professional medical services to the public. As part of those agreements, in certain circumstances, the doctors can claim reimbursement of rent paid by them for surgery premises from the relevant Trust. The Trust is then required, by nationally or locally negotiated agreements (“GMS” or “PMS agreements), to pay to the doctors a sum representing the lower of the actual rent payable under the doctors’ lease of their premises from the landlords and the “current market rent” for those premises. If a dispute arises about the proper figure for current market rent the Trust frequently (as in this case) instructs the District Valuer (“the DV”) to advise it. (There is a dispute here as to the precise capacity in which the DV acted in this matter. Is he an agent of the PCT in the dispute or merely a public officer performing a public function?) If the figure determined by the PCT, on the advice of the DV, is unacceptable to the doctors, they can invoke a standard “disputes resolution procedure” which involves a reference of the matter to the Secretary of State. He has formally delegated his statutory functions in this respect to the NHSLA of which the Appeals Unit is a part.

The procedure provides for the Secretary of State (or now the Appeals Unit) either to decide the matter himself or to appoint another person to make the decision. In either case the “adjudicator” may consult, if he wishes, with other persons whose expertise he considers will assist him in his consideration of the matter. In many cases, including the present, the Appeals Unit consults the CEO VOA to advise as to the disputed rental figure. Both the DVs and CEO VOA are emanations of the “Valuation Office Agency” (which is in turn an Executive Agency of HM Revenue and Customs). It is said by the Claimants that the Appeals Unit is simply a creation of the Department of Health which is directly interested in health service budgets and, therefore, (indirectly) in the amounts which PCTs are required to reimburse to doctors. Thus, the Claimants say, the procedure fails to provide the determination of their civil rights and obligations by a fair and independent tribunal established by law, within the meaning of Article 6 of the Convention.

In the present case, PHIP is the freeholder of the Premises. The Doctors are the tenants. Under the Doctors’ lease it is open to PHIP, as a matter of private right, to trigger a rent review with a view to bringing the rent for the Premises in line with the “Open Market Rent”. They have done that in this case. If the PCT does not agree to pay the whole of the reviewed rent then the Doctors are obliged under the terms of the lease to instruct PHIP, acting as their agents, to negotiate with the PCT to obtain full reimbursement of the rent as arrived at under the contractual rent review, including submitting evidence and making representations to the DV and/or the SSH and any other relevant authority.

In the end after the exhaustion of the procedures, if the rent recoverable from the PCT turns out to be less than the rent set under the rent review, then the lesser sum becomes the rent payable under the lease. Accordingly, the Doctors do not generally run the risk of a shortfall between the reviewed rent under the lease and the sum that it can recover from the PCT (although there is a limited exception to this upon which the Claimants rely in part of the argument). It is generally (subject to the exception) PHIP that has the primary financial interest in the outcome of the negotiations with the PCT and of the dispute resolution procedure. Clause 60.2 of the lease provides as follows:

“If following the agreement or determination of the New Rent on any relevant Review Date or calculation of the Substituted Rent pursuant to clause 21 hereof the New Rent first receivable (having made the Retention) is less than the Rent receivable (having made the Retention) prior to the relevant Review Date then the retention determined in accordance with Clause 60.1 hereof shall be decreased by such amount to ensure that the New Rent (less the Retention) following any Relevant Review Date is not less than the Rent (less the Retention) prior to such Review Date,”

The exception mentioned in paragraph 7 is that the lease permits the Doctors to retain a proportion of the rent (“the Retention” provided for in clause 60.2), varying from 2.5% in the first three years up to 7.5% in the final years of the term. I was told that the retention provision was intended to provide a contribution towards the Doctors repair liability under Part 7 of the lease, clause 31 and following. Thus, the lower the sum reimbursed by the PCT the lower is the retention available to the Doctors for repairs. This, say the Doctors, gives them a direct financial interest (amounting to a “civil right” for Article 6 purposes) in the quantification of the reimbursement from the PCT.

PHP is the holding company of PHIP and has a financial interest in relation to the Premises as such and in relation to similar medical premises elsewhere.

There is a challenge by the Defendants as to the “locus standi” of both PHIP and PHP as Claimants, although following encouragement from the bench, in view of the accepted locus standi of the Doctors, neither Defendant has advanced oral submissions on the point. Oral argument has been on the “merits” of the claim as a whole.

The Agreements and the Statutory Background

In a masterpiece of understatement the statutory framework in issue in this case is described by the deponent for the SSH as being “somewhat complex”. That is a kind description; I shall not venture another. I shall endeavour as a consequence of this complexity, however, to keep citation from the myriad of statutory and quasi-statutory material to an absolute minimum. In doing so, I acknowledge with gratitude the very full written and oral arguments of Counsel that have pointed the way, through the statutory darkness, into the relative sunlight of the relevant materials. Fortunately, for the practical purposes of this case it is not necessary to go much beyond the summary of the legal relationships set out above, save in those areas where the agreements and/or the statutory material go to the crux of the Claimants’ Article 6 challenges.

With effect from 1 April 2004 the Doctors entered into an agreement with the PCT, the agreement being styled as an “NHS Contract (Personal Medical Services) Agreement” (“the PMS Agreement”) for the provision of medical services. This was made under what was then s.28Q of the National Health Service Act (“NHSA”) 1977 (now s.92 of the NHSA 2006). Since the Doctors so elected, the PMS Agreement is designated as an “NHS Contract”. The importance of this for present purposes is that, as a result, its terms are in part determined by the National Health Service (Personal Medical Services) Regulations 2004 (SI 627/2004) (“the PMS Agreement Regs.”)

Under clauses 432-436 of the PMS Agreement the PCT is obliged to pay the Doctors a specified contract sum by monthly instalments. Clause 440 of the PMS Agreement (as revised) provides as follows:

“Where premises costs are payable to the Contractor [i.e. the Doctors] these are included from [sic] the annual contract price and paid separately in accordance with the equivalent provisions of the SFE part 5 (existing premises development) and the National Health Services (General Medical Services – Premises Costs)(England) Directions 2004 ”

The 2004 Directions there mentioned are referred to hereafter as “the Premises Costs Directions”. (The “SFE” are the Statement of Financial Entitlement Regulations 2005, which are not relevant to this case.)

Part 5 of the Premises Costs Directions deals with recurring premises costs, such as rents. Paragraphs 31 to 33, which dictate the extent to which premises costs are reimbursed, are central to the argument, provide as follows:

“Leasehold premises’ rental costs

31.

Subject to the following provisions of this Part, where

(a)

a contractor which rents its practice premises makes an application to its PCT for financial assistance towards its rental costs; and

(b)

in the case of rental costs arising under a lease agreed or varied on or after 1^st April 2004, the PCT is satisfied (before the lease is agreed or varied), where appropriate in consultation with the District Valuer, that the terms on which the new or varied lease is to take effect represent value for money the PCT must consider that application and, in appropriate cases (having regard, amongst other matters, to the budgetary targets it has set for itself), grant that application.

Amount of leasehold premises’ rental costs payable

32.

If a PCT does grant the application, subject to the following provisions of this Part, the amount that it must pay in respect of a contractor’s rental costs for its practice premises is

(a)

the current market rent for the premises; or

(b)

the actual lease rent for the premises, plus any Value Added Tax payable by the contractor if this is properly charged to the contractor by the landlord, whichever is the lower amount.

Current market rents

33.

The amount of the current market of leasehold premises, is to be determined in accordance with Parts, 1 and 2 of Schedule 2. However, having regard to the fact that current market rent levels in some areas of deprivation may be too low to provide

(a)

sufficient returns to support new capital investment in practice premises; or

(b)

sufficient support for existing premises that meet the minimum standards set out in Schedule 1, PCTs may in such circumstances increase the amount they would otherwise pay as the current market rent of practice premises by applying an appropriate uplift factor (as provided by the Valuation Office Agency).”

Schedule 2 to the Premises Costs Directions provides the definition of “current market rent”. The essential aim is to assess “what might reasonably be expected to be paid by a tenant for the premises at the valuation date”: see paragraph 2, in order to arrive at a rent which can be agreed between the contractor (or his or her representative) and a third party in willing negotiation, subject to other provisions there set out.

Part 24 of the PMS Agreement deals with dispute resolution. Under clause 486 the NHS dispute resolution procedure is made to apply to any dispute under the PMS Agreement, thereby incorporating paragraphs 93, 95 and 96 of Part 7 of Schedule 5 to the PMS Agreements Regs. These provide as follows:

“93.

Local resolution of agreement disputes

(1)

… in the case of any dispute arising out of or in connection with the agreement, the contractor and the relevant body must make every reasonable effort to communicate and cooperate with each other with a view to resolving the dispute, before referring the dispute for determination in accordance with the NHS dispute resolution procedure (or, where applicable, before commencing court proceedings).

(2)

…

94.

Dispute resolution: non-NHS contracts

…

95.

NHS dispute resolution procedure

(1)

Subject to sub-paragraph (2), the procedure specified in the following sub-paragraphs and paragraph 96 applies in the case of any dispute arising out of or in connection with the agreement which is referred to the Secretary of State –

(a)

in accordance with section 4(3) of the 1990 Act (where the agreement is an NHS contract); or

(b)

in accordance with paragraph 94(1)) where the agreement is not an NHS contract).

(2)

…

(3)

Any party wishing to refer a dispute as mentioned in sub-paragraph (1) shall send to the Secretary of State a written request for dispute resolution which shall include or be accompanied by –

(a)

the names and addresses of the parties of the dispute;

(b)

a copy of the agreement; and

(c)

a brief statement describing the nature and circumstances of the dispute.

(4)

Any party wishing to refer a dispute as mentioned in sub-paragraph (1) must send the request under sub-paragraph (3) within the period of three years beginning with the date on which the matter giving rise to the dispute happened or should reasonable have come to the attention of the party wishing to refer the dispute.

(5)

Where the dispute relates to an agreement which is not an NHS contract, the Secretary of State may determine the matter himself or, if he considers it appropriate, appoint a person or persons to consider and determine it.

(6)

Before reaching a decision as to who should determine the dispute, either under sub-paragraph (5) or under section 4(5) of the 1990 Act, the Secretary of State shall, within the period of 7 days beginning with the date on which a matter was referred to him, send a written request to the parties to make in writing, within a specified period, any representations which they may wish to make about the matter.

(7)

The Secretary of State shall give, with the notice given under sub-paragraph (6) to the party other than the one which referred the matter to dispute resolution a copy of any document by which the matter was referred to dispute resolution.

(8)

The Secretary of State shall give a copy of any representation received from a party to the other party, and shall in each case request (in writing) a party to whom a copy of the representations is given to make within a specified period any written observations which it wishes to make on those representations.

(9)

Following receipt of any representations from the parties or, if earlier, at the end of the period for making such representations specified in the request sent under sub-paragraph (6) or (8), the Secretary of State shall, if he decides to appoint a person or persons to hear the dispute –

(a)

inform the parties in writing of the name of the person or persons whom he has appointed; and

(b)

pass to the person or persons so appointed any documents received from the parties under or pursuant to sub-paragraph (3), (6) or (8).

(10)

For the purpose of assisting him in his consideration of the matter, the adjudicator may –

(a)

invite representatives of the parties to appear before him to make oral representations either together or, with the agreement of the parties, separately, and may in advance provide the parties with a list of matters or questions to which he wishes to give special consideration; or

(b)

consult other persons whose expertise he considers will assist him in his consideration of the matter.

(11)

Where the adjudicator consults another person under sub-paragraph (10)(b), he shall notify the parties accordingly in writing and, where he considers that the interests of any party might be substantially affected as a result of the consultation, he shall give to the parties such opportunity as he considers reasonable in the circumstances to make observations on those results.

(12)

In considering the matter, the adjudicator shall consider –

(a)

any written representations made in response to a request under sub-paragraph (6), but only if they are made within the specified period;

(b)

any written observations made in response to a request under sub-paragraph (8), but only if they are made within a specified period;

(c)

any oral representations made in response to an invitation under sub-paragraph (10)(a);

(d)

the results of any consultation under sub-paragraph (10)(b); and

(e)

any observations made in accordance with an opportunity given under sub-paragraph (11).

(13)

In this paragraph, “specified period” means such period as the secretary of State shall specify in the request, being no less than two, nor more than four, weeks beginning with the date on which the notice referred to is given, but the Secretary of State may, if he considers that there is good reason for doing so, extend any such period (even after it has expired) and, where he does so, a reference in this paragraph to the specified period it the period as so extended.

(14)

Subject to the other provisions of this paragraph and paragraph 96 and to any agreement by the parties, the adjudicator shall have wide discretion in determining the procedure of the dispute resolution to ensure the just, expeditious economical and final determination of the dispute.

96.

Determination of dispute

(1)

The adjudicator shall record his determination and the reasons for it in writing and shall give notice of the determination (including the record of the reasons) to the parties.

(2)

Where the adjudicator makes a direction as to payments under section 4(7) of the 1990 Act (as it has effect as a result of regulation 9 or paragraph 94(1), that direction is to be enforceable in a county court (if the court so orders) as if it were a judgment or order of that court.”

The SSH’s functions in relation to dispute resolution under the PMS Agreements Regs. have been delegated to the National Health Service Litigation Authority (“NHSLA”), as from 1 April 2005, by the Directions as to the Functions of the National Health Service Litigation Authority (PMS Agreement Disputes) 2005: see paragraph 3(b) of those Directions.

The NHSLA was itself established by the National Health Service Litigation Authority (Establishment and Constitution) Order 1995 which was made under powers then conferred by the NHSA 1977.

The NHSLA is a body corporate. The Appeal Unit is an administrative section of the NHSLA and has no separate legal identity. In the present case the Appeal Unit came into the picture in 2005 (under the Directions mentioned in paragraph 18 above) for the purposes of discharging the SSH’s functions in relation to the resolution of the dispute that had arisen between the PCT and the Doctors.

As already mentioned the VOA is an executive agency of HM Revenue and Customs. The CEO VOA is the head office of the agency to which is attached the senior management of the VOA; that office is in London. Since 2001 the work undertaken by the VOA has been divided administratively into two internal “business streams”, one is “District Valuer Services” (“DVS”) and the other is “Local Taxation Services”. At the relevant times DVS was first divided into nine District Valuer Units, based in different areas of the country, covering each of the so-called “regions” of the United Kingdom. Later DVS was divided into “sector teams”; for example, there is now a single national “District Valuer Health”. The CEO VOA, in contrast, provides central policy direction and support services to DVs. DVs themselves operate locally on particular cases and in particular areas of VOA responsibility. DVs are part of the DVS business stream.

Background facts of the present dispute

On the completion of the development of the Premises in 1998, the DV for Lincolnshire was instructed by the Lincolnshire Health Authority to determine for reimbursement purposes the current market rent. This was fixed at that time as £139,000 + VAT per annum: see the memorandum of 8 January 1999, appendix 1 to the PCT’s Conclusion Report of June 2007. The rent in the lease to the Doctors was set to reflect that figure which was to be the amount reimbursed by the authority. The first triennial rent review under the lease took place on 7 December 2001. The DV for Lincolnshire was again instructed by the PCT and the Doctors were represented by the same firm of surveyors as have acted for them in the present dispute. The current market rent at that stage was agreed between the DV and the surveyors to be £159,000 + VAT per annum.

On 30 September 2004, PHIP served a notice on the Doctors, pursuant to the lease, triggering a further rent review. The sum sought by PHIP on this review was £177,500 + VAT. It then had to be determined whether the figure reimbursable to the Doctors should also be revised. The PCT consulted the DV who recommended that the reimbursable rent should remain unchanged. The DV and the surveyors were unable to reach agreement and the latter wrote to the PCT on 25 May 2006 informing it of the disagreement and requesting the initiation of the appeal process.

Local resolution, the first step required under regulation 93 of the PMS Agreement Regs., failed to achieve a settlement and on 1 June 2007 the surveyors wrote to the Appeal Unit appealing against the earlier local decisions. This letter was acknowledged by the Appeal Unit by letter of 11 June 2007, which asked for confirmation of the Doctors’ desire to appeal and requested representations by 1 July 2007. Confirmation was sent on 21 June 2007 and representations were sent on 25 June 2007. On 1 July 2007 the Appeal Unit had also written to the PCT requiring its representations by 1 July 2007. On 28 June the PCT sent its representations to the Appeal Unit. There followed responses by the PCT and the Doctors to the representations of the other.

On 26 July 2007 the Chief Officer of the Appeal Unit, Mr Paul Burns, compiled a summary of the representations to date and gave an overview of his understanding of the stage that the dispute resolution procedure had reached. This was sent to the Doctors on 30 July 2007. The document included the following:

“1.1

…As Chief Officer of the FHS Appeal Unit and authorised officer of the NHS Litigation Authority, I may determine the matter myself or, if I consider it appropriate, appoint a person or persons to consider and determine it.

1.2

The dispute resolution procedure also allows for advice to be sought.

…

6 Consideration

6.1

The PMS Agreements Regulations 2004 apply in this case …

6.2

…

6.3

Given the limited information provided and in order to be able to determine the dispute properly, I have decided to consult and seek advice from the Chief Executive’s Office of the Valuation Office Agency. The VAO uses its expert knowledge on these matters to weigh the merits of the arguments presented but, importantly, has no pecuniary or budgetary interest in the outcome. It is open to the VOA to ensure that this has available to it as full an understanding as possible of the parties view on the appropriate valuation. ”

The covering letter stated as follows:

“The Appeal Unit has decided to seek advice from the Chief Executive’s Office of the Valuation Office Agency. As you will see, both the Doctors and the PCT will be given an opportunity to provide further comments before the final decision on the application for dispute resolution is made.”

The Claimants challenge the procedure outlined in these documents.

On 5 September 2007 the surveyors for the Doctors wrote to the Appeal Unit in these terms:

“I had understood that Schedule 5 Part 7 paragraph 95 of the Statutory Instrument 627 (2004) required the Secretary of State (or the delegated Authority) to appoint an “independent adjudicator” to hear such matters. I did not take your letter of 30 July as an indication that you had asked the Chief executive’s Office of the Valuation Office Agency to appoint an individual from the VOA to act in this role.

The SI appears to give the Secretary of State the authority to appoint an adjudicator of his choice but as in all such matters the Secretary of state is required to act in a reasonable manner and have due regard to the rules of natural justice.

As you are aware I have serious reservations as to whether the VOA can be regarded as sufficiently independent to perform this role. In the circumstances I should be obliged if you would confirm that a VOA individual has been appointed as “independent adjudicator” and if not what is the nature of the advice being sought from the VOA. Similarly if an adjudicator has been appointed what is the exact nature of the quasi-judicial role that he or she has to perform. In particular is the adjudicator an independent expert or an arbitrator and if not what regulations govern the conduct of the independent adjudicator?

My clients would prefer the matter to be dealt with in accordance with the normal arbitration procedures as laid down in the Arbitration Act (1996). As such your adjudicator would be restricted to consideration of the evidence submitted and nothing else. If your “adjudicator” wishes to act as an independent expert then I would point out that such an individual has a legal duty to both parties and is liable to both parties. In addition I would expect to be notified of any material or files to which he or she has access in the course of the investigation and which have not been previously disclosed. There must be no “secret evidence” available to one party only.

My clients have no wish to be unduly difficult and would probably not object to the appointment of a suitably qualified individual from the VOA as the independent adjudicator but would require that the individual in question;

•

Be a member of the Royal Institution of Chartered Surveyors

•

Possess experience of arbitration

•

That he or she acts in strict accordance with the Arbitration Act 1996

•

Has due regard to the rules of the Royal Institution of Chartered Surveyors as it affects members carrying out such a role.

In this context the Royal Institution of Chartered Surveyors does provide a panel of arbitrators experienced in the medical field.

I look forward to your reply at your earliest convenience. ”

On 14 September 2007 the Appeal Unit replied as follows:

“As a representative of the contractor to the instant PMS Agreement, you have referred the matter of rent reimbursement for dispute resolution under the provision of Paragraph 95, Schedule 5 of the NHS (Personal Medical Services Agreement) Regulations 2004. While paragraph 95 refers to the Secretary of State, the NHS Litigation Authority has been directed to exercise those functions of dispute resolution on his behalf and does so through its administrative arm the ‘Family Health Services Appeal Unit.’

As Chief Officer of the FHS Appeal Unit and authorised officer of the NHS Litigation Authority, I either act as the adjudicator or decide to appoint a person(s) under sub-paragraph (9) once the preceding sub-paragraphs have been complied with, which is the case here. As is usual in current market rent disputes, I have not exercised my discretion to appoint person(s) under sub-paragraph (9) and therefore I currently remain the Adjudicator for this dispute. It follows that Mr Baxendale, or any person acting for the VOA, is not undertaking the role of Adjudicator.

Following consideration of matters currently before me, under sub-paragraph (10)(b), I have exercised my discretion to consult other persons [through Chief Executives office of the VOA] whose expertise I consider will assist me in my consideration of the dispute before me. The VOA have a number of such experts upon whom I rely and Mr Baxendale is one such person and acts in that capacity. I trust you will accord him appropriate professionalism and access to premises and other matters he considers it appropriate in order that he can advise me on this important matter.

I note you make reference to arbitration however that does not form part of this statutory process, which is adjudication following matters not being resolved at first instance between the contractor and local PCT.

Although I note your reference to Mr Baxendale being involved in another case where you are involved, there is no suggestion that the same PMS contractor is involved or that Mr Baxendale has any pecuniary or budgetary interest that would debar him from providing the expertise I require.

It may assist if I summarise my current position with the instant dispute before me:

[There is then repeated paragraph 6.3 of the letter of 26 July quoted above.]

Once the report is received, the parties to the PMS Agreement will be provided with an opportunity to make observations upon it although this is not an opportunity to change or remake the case. I will then consider the dispute before me.”

The Arguments

The Claimants contend that the procedures outlined in the letters of 30 July and 14 September 2007, quoted above, are flawed as contravening Article 6 of the Convention.

The Claimants submit that there can be no doubt that the determination of the Doctors’ right to reimbursement of rent is a determination of their civil rights within the meaning of Article 6, as being in effect a rent review process. They rely upon the statement of Lord Diplock in United Scientific Holdings Ltd. v Burnley BC [1978] AC 904, 922-3 where he said that a common feature of nearly all rent review processes “is that… they specify a procedure for the determination of the revised rent by agreement between the parties or, failing that, by an independent valuer or arbitrator…”. They rely also on two Swedish cases before the European Court of Human Rights in which proceedings before a Rent Review Board were taken to fall within the ambit of Article 6: Langborger v Sweden (Appl. 11179/84) and Apslund v Sweden (Appl. 37588/97)

The Defendants contend that Article 6 is not engaged in the present case. They say that the process is not determinative of the Claimants’ “civil rights” within the meaning of the Article. It is a case where a policy decision is made by the PCT as to whether rent should be reimbursed, based upon paragraph 31 of the Premises Directions, that being dependent upon (a) an application for reimbursement being made by the Doctors, (b) the terms of the lease variation representing value for money and (c) the PCT considering it appropriate to grant the application having regard, amongst other things, to the budgetary targets which it has set itself.

In summary, the PCT, it is argued, has an administrative discretion which it may exercise to reimburse the Doctors; the exercise of the discretion or otherwise is not the determination of a “civil right” of the Doctors. The fixing of the current market rent under the disputes resolution procedure is not the determination of the Doctors’ right; it is merely the calculation of the level of reimbursement, if the discretion is exercised in their favour. Alternatively, the Defendants say that if, the setting of the current market rent is a “determination of a civil right” it is, as I suggested tentatively when granting permission for this application, more akin to a determination by an expert under a private rent review which “may” not engage Article 6.

In response the Claimants say that the determination of the rent involves no decision of policy and, even if it does, that does not prevent Article 6 being engaged. The assessment of the rent is determinative of a “civil right”, as it sets the maximum reimbursement “in the event that an application for financial assistance is granted”. (The Defendants seek to turn the quoted passage against the Claimants as indicating, it is said, the flaw in their argument, and demonstrating that all is dependent upon an exercise of the PCT’s discretion.) Further, the Claimants say that the assessment of the current market rent fixes the contractual liability of the Doctors under the lease of the Premises.

The Claimants say that, on the facts of this case, the PCT appears to have decided, in exercise of its discretion, that it is going to make a reimbursement because otherwise it would not have permitted the question of the calculation of the current market rent alone to be referred to the Appeal Unit. The only dispute extant between the parties, say the Claimants, is as to the level of the current market rent; there has never been a suggestion that, if PHIP’s suggested rent properly represents the current market rent, it should not be reimbursed to the Doctors because of some outstanding issue that remains in the discretion of the PCT.

Accordingly, the Claimants submit, the determination of the dispute as to the level of current market rent will resolve the level of the Doctors’ entitlement to reimbursement which is not otherwise in issue. That, they say, is the determination of a civil right. Alternatively, it is argued that even if the determination of the current market rent involves the determination of a right that is contingent upon the determination of some other entitlement it remains the determination of a civil right for the purposes of Article 6: Silva Pontes v Portugal (1994) EHRR 156 and Robins v UK (1997) 26 EHRR 527.

The Claimants further refute my tentative suggestion, when granting permission for this claim, that this case may be akin to an expert determination of a private rent review and not amenable to Article 6 considerations. They say that the parties to the lease have agreed to cap the rent liability by reference to the current market rent determined by the statutory procedure. The Doctors, they say, are bound by the lease to follow this procedure which results in the decision of the level of their “entitlement” to reimbursement from the PCT. Far from being a determination by an independent expert the Appeal Unit has reserved to itself the determination of the current market rent rather than having appointed a truly independent expert to decide the matter.

On the assumption that Article 6 is engaged the Claimants contend that the decision for determining the Doctors’ “entitlement” to reimbursement is to be undertaken by the SSH’s own delegate in circumstances where the level of rent has an effect on the NHS budget for which the SSH is responsible. It is argued that the tribunal must be independent of the executive and of the parties to the dispute. Particular reliance is placed upon Tsfayo v UK [2007] HLR 19.

It is further submitted that the role of the SSH’s delegate means that it has an interest in the outcome of the present dispute. The NHSLA is funded out of the NHS budget and it has a direct input into budgeting and resource decisions for other matters within its remit; it is expected to be “sensitive to the views” of NHS bodies and its principal function is to conduct litigation on their behalf.

Finally, it is argued that the involvement of the CEO VOA in the reference to the Appeals Unit taints the procedure with apparent bias because the CEO VOA is reviewing the work of a more junior employee of the same agency who at the first stage of the process was acting on behalf of the PCT, as a party to the dispute, in negotiation with the Doctors’ surveyor to fix the current market rent, and continues to act on the PCT’s behalf in submitting representations to the Appeals Unit under the disputes resolution procedure.

The issues

As noted above, the PCT has throughout the term of this lease to date reimbursed to the Doctors the current market rent for the Premises. There has never been any dispute that such reimbursements at the proper level should be made. Nowhere in the documents filed on this claim does any issue appear as to whether the sums sought by way of reimbursement did or did not represent value for money or that the PCT’s budgetary targets might require the PCT to withhold such payments within the meaning of paragraph 31 of the Premises Costs Directions. There are no documents showing the making of a formal application by the Doctors for financial assistance towards rental costs or any formal grant of any such application. No evidence has been given by any party as to the processes whereby applications for assistance have been made, considered and granted previously or as to such processes in the course of the present rent review. Indeed, the PCT (joined as an Interested Party) has played no part in the proceedings at all, as might have been expected if any issue arose as to the exercise of its discretions.

There has been before the court a witness statement of Mr Alan Fenwick, the surveyor who has acted for the Claimant in this matter, who was formally himself a DV. In that witness statement Mr Fenwick says this:

“2.3

…[I]n my experience, there has never been a decision by a PCT not to reimburse the GP tenant once the CMR is agreed. If the system is to continue effectively, once a PCT has approved a scheme and GP tenants have entered a long lease on the understanding that it would be reimbursed, I cannot see a PCT ever deciding not to reimburse a GP tenant on budgetary considerations alone. This would send shockwaves through the whole system because it would be so unusual. As soon as one PCT exercises its discretion not to reimburse GP tenants on budgetary considerations this would have the potential to destroy the confidence in the system for both GP tenants and private investors alike. I therefore cannot think of any realistic circumstances in which reimbursement would be denied on budgetary grounds after the CMR has been determined and confirm that, as far as I am aware, the PCT in the Hereward matter has never suggested it would do anything else but reimburse the GP tenants at the CMR as determined.”

On the other hand, the Defendants say that, whatever the position in practice, in law the discretionary features of the reimbursement scheme remain and it is, therefore, necessary to examine the rent reimbursement scheme as a whole in order to decide whether the case involves the determination of a civil right within the meaning of Article 6. They submit that simply because the PCT has not declined to grant an application for assistance to date does not alter the nature of the Doctors’ rights under the agreement which is still dependent upon the exercise of the PCT’s discretion.

Before turning to the decided cases on what amount to civil rights and obligations for this purpose, I should record that s.9(5) of the NHSA 2006 (which, it is agreed, applies to this agreement between the doctors and the PCT) provides that,

“Whether or not an arrangement which constitutes an NHS contract would apart from this subsection be a contract in law, it must not be regarded for any purpose as giving rise to contractual rights or liabilities”.

It is accepted, however, that the rights of the Doctors under this agreement may still be “civil rights” under Article 6 even if they are not “contractual rights”. Mr Karas QC (with whom Mr Maurici appeared) for the Claimants also stressed that, whatever the legal nature of the rights arising under the agreement between the Doctors and the PCT, they were rights flowing from an agreement between them; in so far as terms were included by reference to the PMS Agreements Regs and the Premises Costs Directions, those terms applied by virtue of the agreement itself.

On this issue I was referred to three main cases, which in their turn commented upon many other examples of the developed jurisprudence in this area. The cases were Ringeisen v Austria (1971) 1 EHRR 455, Runa Begum v TowerHamlets LBC [2003] AC 430 and A v LB Croydon [2008] EWCA Civ 1445.

Ringeisen’s case was concerned with an Austrian statute which required transfers of agricultural land to be sanctioned by a district commission, with a right of appeal to a regional commission. If sanction was not obtained the transfer transaction was void. The statutory purpose was to keep agricultural land in the ownership of farmers with small or medium sized holdings. The district commission was charged with refusing consent in cases which appeared to violate the policy. On traditional views, this was a classic case of a regulatory power entrusted to an administrative body. However, the court held that Article 6 applied, on the ground that the commission’s decision was “decisive” on the question of enforceability of a private law contract for the sale of land. Accordingly, the decision by the administrative body engaged article 6 by virtue of its effect on private rights. In the end, it was held that Article 6 was complied with because of the independence and impartiality of the regional commission: see per Lord Hoffmann in R (Alconbury Ltd) v SSE [2003] AC 295, 328, paragraph 80.

Ringeisen’s case marked the beginning of the developed concept of “civil rights” arising out of administrative decisions of public bodies and it became the foundation of the Strasbourg court’s expansion of the concept of a “civil right” to many claims to welfare and social security schemes. Examples are to be found in the decisions in Feldbrugge v The Netherlands (1986) 8 EHRR 425 and Deumeland v Germany Loc cit. 488.

Feldbrugge concerned state sickness benefits and Deumeland related to the right to a state widow’s pension where the claimant’s husband had died in an industrial accident. In both cases the right was created by public legislation but, as was said by the court in Feldbrugge, “the right in question was a personal economic and individual right, a factor which brought it close to the civil sphere”.

In Runa Begum the right sought to be asserted was to a social benefit in kind, namely living accommodation. The House of Lords did not find it necessary to decide whether the right claimed was a “civil right” within the meaning of Article 6 but was content to proceed on the assumption that it was. Their lordships made a number of observations helpful to those confronted directly with the question whether specific rights do or do not fall within the ambit of Article 6.

Lord Hoffmann thought that:

“…the fact that it [the claim] was to a benefit in kind necessarily means that the Council has a discretion about the nature of the accommodation it will provide, but in principle there is a right to accommodation and not merely a claim to the exercise of a discretion…” [2003] 2 AC at p.455F.

He continued by citing the judgment of Hale LJ (as she then was) in Adan v Newham BC [2002] 1WLR 2120, 2137, paragraph 55 as follows:

“Once the local authority are satisfied that the statutory criteria for providing accommodation exist, they have no discretion. They have to provide it, irrespective of local conditions of demand and supply. Hence this is more akin to a claim for social security benefits than it is a claim for social or other services, where the authorities have a greater degree of discretion and resources considerations may also be relevant.”

However, Lord Hoffmann, while expressing approval of Hale LJ’s approach in Adan, drew back from deciding whether the principles derived from Feldbrugge, Deumeland and Salesi v Italy 26 EHRR 187 applied to the provision of benefits in kind by public authorities. These involved an amount of discretion on the part of the authority which took them further than the European jurisprudence had gone so far. So, even though there might be a right to accommodation if the statutory criteria were satisfied it was not necessarily a “civil right” within Article 6.

In the Runa Begum case, Lord Millett noted that the factors that weighed with the court in Feldbrugge and Deumeland were “… the personal and economic nature of the right asserted, the close connection with the contract of employment, and the affinities with insurance under the normal law…”. In Salesi his Lordship noted the principle had been extended to non-contributory benefits schemes; the claim in issue fell within Article 6 because the claimant “suffered an interference with her means of subsistence and was claiming an individual economic right flowing from specific rules laid down in a statute giving effect to the Constitution”. However, as Lord Millett said the case before the House went “further still”. He continued:

“… It has four features which take it beyond the existing case law: (i) it is concerned with a benefit in kind; (ii) it therefore involves priority between competing Claimants. There is only a finite amount of housing stock, whether it belongs to the local housing authority or is bought in; and if one applicant is allowed to remain on the unintentionally homeless register it will be to the detriment of other homeless persons; (iii) the housing authority has a discretion as to the manner in which it will discharge its duties; and (iv) ultimately the question for determination calls for an exercise of judgment: whether the applicant has behaved reasonably in refusing an offer of accommodation, having regard to all the circumstances, and in particular housing conditions in the area.”

In the Croydon case the Court of Appeal, in a sense, picked up where the House of Lords had left off in Runa Begum. Ward LJ recognised that a “right” to accommodation under Section 20 of the Children Act 1989 may exist as a “right” of sorts, but that it might not be a “civil right” within the meaning of Article 6.

In that case the Court of Appeal held that the “right” to accommodation under s.20 of the 1989 Act, read with s.23 of that Act, took it outside the description of a civil right under Article 6, in view of the range of types of accommodation that it was open to the authority to provide in discharging its duty under the section. In reaching his conclusion in the Croydon case, Ward LJ (with whom Maurice Kay LJ and Sir John Chadwick substantially agreed) said that he “found instructive” the judgment of Stanley Burnton J (as he then was) in R (Hussain) v Asylum Support Adjudicator [2001] EWHC Admin 852. In that case Stanley Burnton J said,

“26.

…Article 6 does not apply to the exercise by public authorities of their discretion, as distinguished from their compliance with their obligations owed to citizens. Obligations give rise to rights; discretionary payment and discretionary support do not…

27 …A right by definition is something to which the citizen is entitled, to which he has an enforceable claim. A discretionary benefit, one that a government may give or refuse as it wishes, cannot be the subject of a right…”.

The distinction is made in paragraphs 49, 50 and 53 of the judgments in the Croydon case as follows:

“I am satisfied that the child has more than a mere right to apply for accommodation. As is common ground, he certainly has right to accommodation when the conditions for granting it are met and so it seems to me that, at the time he makes his application and seeks the determination of his claim, it can then fairly be said that he has the right, at least on arguable grounds, to be provided with accommodation. Assuming for a moment that it is a civil right, it is in the determination of that civil right that he is entitled to the guarantees of fairness afforded by Art. 6. He has the right to a fair hearing whether the determination is favourable or unfavourable to him. Indeed, it is difficult to see what use article 6 would be if it could only be invoked when the determination found that the conditions for accrual or crystallisation of the right had been established. Article 6 is there to protect the victim of a determination made by a tribunal lacking independence and impartiality which has unfairly decided the relevant facts and matters against him and so refused to admit that he has the right he was seeking to assert.

Do the appellants have a civil right to accommodation?

The analysis so far has been concerned to answer the narrow question: does section 20 confer a right to accommodation? Now I have to ask another question, the more important question: does that right amount to a civil right as the autonomous term must be understood? This requires us to look at the scheme of the Act to discover exactly what accommodation the child becomes entitled to under section 20. Section 23 provides the answer. Section 23(2) requires that the local authority provide accommodation and maintenance for any child whom they are looking after by doing any one of many things. A huge spread of accommodation is envisaged. It ranges from placing him with a family, a relative of his or a foster parent. The local authority can maintain him in an appropriate children’s home or even, and this is important,

“(f)

Making such other arrangements as –

(i)

seem appropriate to them.”

Ward LJ reached his conclusion on this point in paragraph 53 as follows:

Whilst, therefore, it can be said that the child may have a right to some accommodation under section 20, he has no right, or enforceable claim to any particular type of accommodation. A wide discretion is vested in the local authority to decide exactly what accommodation is appropriate in the circumstances of the case. Consequently, looking at the process as a whole, beginning with the assessment under section 20 but ending with the allocation under section 23, the decision-making process has the character of exercising a discretionary power which destroys the notion that a right is involved.”

After a review of the Salesi case and a recognition that in some cases the provision of accommodation can be characterised as an entitlement affecting a person’s rights in private law, Ward LJ concluded that the right to accommodation conferred by Section 20 of the 1989 Act, read with Section 23, conferred “too much discretion…[on] the local authority” to be classified as a civil right in view of the range of accommodation that it was open to it to provide in discharge of the relevant duty and in satisfaction of the right: see paragraph 59.

In my judgment, it is clear from the passages of the judgment of Ward LJ quoted above that it is necessary at look at the “process as a whole”, as the Defendants argue in this case, to discover whether a civil right is in play: see paragraph 53. A similar conclusion had been reached by Bennett J at first instance in that case where he said,

“(4)

The determination about age is not a determination of civil right because the civil right must encompass all the matters in section 20. The age determination was but a staging post. It would be absurd if one part of section 20(1) was subject to Article 6(1) and the other parts not. …” (Footnote: ¹)

Embarking on that examination of “the whole process” in the Croydon case, the Court of Appeal decided that a “civil right” was not in play notwithstanding that the only factual issue to be resolved was the age of the applicants, “Man or boy?”, as Ward LJ graphically put it in the first sentence of his judgment.

In a similar way, Mr Coppel for the Appeal Unit submitted that to look at the totality of the scheme in this case is fatal to the Claimants on this point. It is not sufficient to focus simply on the dispute as to current market rent as the Claimants submit is the correct approach. As Mr Coppel says, the PCT can decline the application of the Doctors for financial assistance by reference to its own budgetary targets; its discretion could not be wider. While the exercise of the discretion is amenable to judicial review the “rights” of the Doctors are not “civil rights” for these purposes.

In reply, Mr Karas attacked the Defendants’ reliance on the element of discretion conferred by paragraph 31 of the Premises Costs Directions in a number of ways, but in particular by reference to the decision of the Strasbourg court in Jacobsson v Sweden (1989) 12 EHRR 56. This was a case where the applicant alleged that protracted building prohibitions covering his property violated Articles 17 and 18 of the Convention and Article 1 of the First Protocol. The applicant further complained about the absence of any judicial remedy for challenging the maintenance of the prohibitions. It was held that his rights under Article 6 had been infringed. In paragraphs 69, 70 and 73 of the judgment the court said this:

“69.

In view of the wide discretion left by the Swedish Parliament to the administrative authorities in these matters, the Government further maintained that the applicant could not claim any ‘right’ to build before a permit had been granted.

The Court considers however that, subject to meeting the requirements laid down in the 1947 Act and the 1959 Ordinance, he could arguably have claimed to have a ‘right’ to such a permit. True, the issue of a permit under these circumstances would have involved the exercise of a certain discretion by the authorities, but their discretion would not have been unfettered: they would have been bound by generally recognised legal and administrative principles.

70.

Pointing out that the prohibitions at issue affected the rights of a great number of other property owners, the Government alleged that the dispute in the applicant’s case thus came to have connections with his ‘right’ to build that were so remote and tenuous as to make Article 6 inapplicable.

There can, however, be no doubt that the prohibitions severely restricted the said “right” and that the outcome of the proceedings whereby he challenged their lawfulness was directly decisive for his exercise thereof…

2.

“Civil character of the right at issue…

73.

In the circumstances of the present case, the applicant’s disputed “right” to build on his land is of a “civil nature” for the purposes of Article 6(1). This is not affected by the general character of the building prohibitions, not by the facts that the planning procedure, as was submitted by the Government, is part of public law and that a building prohibition is a necessary element in urban planning”

Mr Herberg, for the SSH, submitted, however, that the existence of an administrative discretion on the part of a public authority, coupled with public law duties as to its exercise enforceable in the courts, did not necessarily confer a “civil right” within Article 6; that would be contrary to the European and domestic jurisprudence. He submitted, in my judgment correctly, that the crucial point underlying the decision in Jacobsson’s case was that it related to restrictions on property rights of the applicant which were undoubtedly “civil rights”. In this case, by contrast there is no underlying right at all that exists independently of the exercise of the PCT’s discretion. In the present case, there is a discretion to deny financial assistance which prevents a civil right arising at all. Unlike the situation in Jacobsson there is no pre-existing right which is being inhibited by the discretionary decisions in question.

Mr Karas for the Claimants submitted that none of the English cases deal with a situation where the claim arises from agreement between the citizen and a public authority; they deal rather with plain public objectives in welfare, planning and care contexts. Here, there is an agreement giving rise to the Claimants’ right to a “contract sum”, including the reimbursement of premises costs. The discretion should, therefore, be regarded as arising in a contractual setting, giving rise to the type of discretion that might be conferred on a landlord under a lease to withhold consent to an assignment, so long as consent is not unreasonably withheld. Mr Karas said that the economic right of the Claimants in this case flowed not from statutory rules as in most of the decided cases but from a commercial bargain struck between the parties.

However, while not decisive of the matter, we know that by opting for an “NHS Contract” in this case the Doctors opted into the provisions of s.9(5) of the NHSA 2006 (cited above) precluding the agreement giving rise to contractual rights. To an extent, therefore, the analogy is negated. There was a conscious decision to bring in the informal, quasi-statutory disputes resolution procedure into that agreement, protected by public law rights, but without recourse to the ordinary civil courts by way of contractual claim. Further, the Claimants opted into a procedure under which the SSH (now the NHSLA), rather than the courts, would be the final decision maker on the parties’ rights under their agreement. There is no contractual right on the Doctors’ part to have the PCT’s discretion exercised in their favour.

Mr Karas submitted that the present case was akin to that of Nicodemo v Italy (39/1996/658/844) 2 September 1997. In that case the Calabria Regional Council took the applicant into its permanent employment; he had previously been engaged on a fixed-term contract. To enforce his right to remuneration, frustrated by the Council’s inertia, the applicant instituted proceedings before the Regional Administrative Court, seeking an implementation of the decision to employ him and payment of the difference in remuneration due to him as a consequence, together with damages for delay. The Government argued that Article 6 was not engaged. The argument and the decision of the court appear from the following passage:

“16.

The Government submitted that while the existence of civil rights in the context of employment in the civil service could not be excluded a priori, in principle disputes relating to such employment fell outside the scope of Article 6 of the Convention. The provision was applicable when the private-law features of any given case predominated.

In the present case, since the dispute concerned a decision of the regional Council to take the applicant into its permanent employ, it came within the sphere governed by public law. Accordingly, the application was inadmissible ratione materiae.

17.

The Commission took the view that the - explicit or implicit - pecuniary aspect of what was at stake in the proceedings was decisive for the purpose of determining whether Article 6 was applicable when, as in the present case, the domestic proceedings had a bearing on the applicant’s economic rights.

18.

The court does not accept the Government’s argument. Before the RAC the applicant sought, in addition to implementation of the Regional Council’s decision to recruit him, payment of the difference in salary and damages for the delay in implementing the decision. The right asserted by Mr Nicodemo was essentially economic and the administrative authorities’ discretionary powers were not in issue. Consequently, the private-law features predominated over the public-law features.”

Mr Karas argued that the situation in Nicodemo was similar to that to be found here. Mr Nicodemo had been engaged by the Council and was entitled to remuneration, the fact that the decision to employ him in the first place was under an administrative discretion of the Council did not prevent his rights arising thereafter from being “civil rights”. Similarly, it is said the PCT has in fact decided to pay the current market rent for the premises and the only matter in issue is to resolve what that rent is.

In my judgment, however, the decision to employ Mr Nicodemo is more akin to the PCT’s undoubted discretion to enter into the PMS Agreement with the Doctors in the first place; it is not the equivalent of a decision under the agreement to grant a particular application for financial assistance. Under the agreement in this case further discretions arise as to the handling of the Doctors’ applications for reimbursement of rent. The fact that part of the process of resolving the entitlement involves the “factual” determination of the current market rent does not undermine the intrinsic nature of the right in question which is dependent upon the PCT’s discretion to make a grant.

In summary, like Ward LJ in the Croydon case I reach the conclusion that “too much discretion is given” to the PCT in this case to decide whether or not to grant financial assistance. This precludes the engagement of Article 6. When, like Ward LJ one “look[s] at the process as a whole… the decision making process has the character of exercising a discretionary power which destroys the notion that a right is involved”.

I recognise the force of Mr Karas’s contention that this right or claim to reimbursement arises out of a freely negotiated bargain between the Doctors and the PCT and that substantial sums of money are potentially at stake throughout the lease. The fact remains that this agreement, by statute, does not give rise to contractual rights and it goes on to confer discretionary powers on the PCT at each stage of rent variation during a 24 year term to grant or refuse an application for assistance on grounds of “value for money” and having regard (amongst other things) to budgetary targets that it has set for itself. One can only carry Mr. Karas’s analogy with the requirement of reasonable conduct on the part of a landlord in withholding consent to a transaction under a lease so far. The nature of the discretions conferred on the PCT by this agreement is far wider than that.

I have considered also whether this case like that of Ringeisen (as explained by Lord Hoffmann in Alconbury (supra) – see paragraph 44 above) attracts article 6 “by virtue of its effect on private law rights”, i.e. the Doctors’ rights and liabilities under their lease of the Premises. In my view, this is not the case because Ringeisen (like Jacobsson) dealt with the fundamental civil right of an individual to deal with his land as he pleases. No such right is impeded in the present case. It is true that the consequence of the decision on current market rent may determine the rent payable (which is limited in any event to the amount reimbursed by the PCT) and the amount of the permitted retention under clause 60.2 of the lease, but it does not affect in any way the nature or enforceability of the private transactions into which the Doctors may enter. Further, for reasons that I have endeavoured to explain the Doctors have no “civil right” independent of the discretions of the PCT. In Ringeisen, subject to the ruling of the commission, the applicant had the civil right to enforce his binding contract for the transfer of land.

If I am correct on this aspect of the case, it is not necessary to determine the other questions arising on the assumption that Article 6 is engaged. However, the points have been fully and cogently argued by all parties and I should, I think, express shortly my views upon them. Some of the points also provide pointers to the resolution of the freestanding point on “bias” under English law which I still have to decide.

I propose to take this point very shortly indeed. The Defendants submit that Convention rights may be waived where such waiver is unequivocal and does not run counter to the public interest. No issue is taken by the Claimants with that proposition. They do, however, deny the waiver alleged.

The Defendant’s argument is that the Doctors voluntarily adopted the procedures arising under the PMS agreement by a conscious choice. It is said that they cannot now complain when one of the options available under those procedures might infringe the principles of Article 6. It is said further that PHIP and PHP plc must have been well-aware of the customary roles of the NHSLA and of the CEO VOA in these matters and cannot be heard to object to their roles in this case. The parties opted for a simplified disputes procedure under which the decision maker was likely to be a public body and there would be the usual public law remedies in respect of any unfairness or irrationality.

I accept the Claimants’ submissions on this point. The parties chose a procedure giving the Doctors rights under public law. No attention would have been given to the specific manner in which the procedures would be operated in the event of the dispute. The NHSLA has a discretion as to how the procedure is to work in any individual case. The Doctors were entitled to expect that if the procedure was capable of operation in a manner that complies with the Convention it would be so. It might be that no objection would be taken on every occasion to the NHSLA deciding the case itself or to it consulting the CEO VOA but it cannot be taken to have waived unequivocally its right to rely upon Article 6 whatever the circumstances. In my judgment, for waiver to operate it would have to be far clearer than by the features relied upon by the Defendants here.

Mr. Karas submits that neither the SSH nor the Appeals Unit is independent and impartial. It is argued that each is too closely connected with the other, and with the PCT, to enable it to be independent of one of the parties to the dispute, namely the PCT. The Secretary of State is responsible for the budget of the NHS, out of which PCTs are funded. The Doctors’ claim to reimbursement is a drain on that budget and accordingly the SSH is “interested” in the outcome of the determination of the current market rent in this case.

Further, it is submitted that, from a budgetary point of view, the NHSLA is also directly funded from the same NHS budget and receives contributions for the various “schemes”, for which it is responsible, from various bodies including PCTs as “members”. They are described as being among the group of “clients” in the NHSLA’s “Framework Document” (Dec 2002).

It is pointed out by the Claimants that in the Framework Document, dealing with the primary schemes for which the NHSLA is responsible, “The specific objectives of the Schemes…” include “…i. to minimise the overall costs of…property expenses to the NHS and thus maximise the resources available for patient care…”. While it is accepted that the running of the schemes is separate from the NHSLA’s functions in a dispute such as this, the administration of the schemes is one of its primary functions. There are other similar features of the relationship between the SSH, the NHSLA and PCT as to budgets, targets and so forth, relied upon by the Claimants in their written submissions, which are not necessary to set out at length.

In contrast, in evidence for the SSH, Mr. James Latta of the Department says this:

“The independence of the NHSLA and PCT budgets impugned in this judicial review can best be illustrated as follows:

a.

The NHSLA receives a budget from the Secretary of State for Health for administration which includes the running of cases such as this. If, for example, it receives 5 cases fewer than anticipated, it can spend those funds on something else. On the other hand, if it receives 5 cases more than anticipated, the NHSLA might have to borrow funds from other parts of its budget to meet those costs, as long as they are repaid, as described in paragraph 40 above.

b.

At the relevant time in this case, the PCT received a budget in which an amount was nominally awarded by DH in respect of rent reimbursements but the PCT was free to spend its budget as a whole as it wanted. So if the PCT spends less on rent reimbursement than it anticipated because the CMR for some premises was lower than expected, it could afford (to give a very basic example) to pay the salary of another nurse. The money that it has not spent is not ‘repaid’ to DH to be allocated to other DH-funded departments, agencies or bodies (such as the NHSLA).

c.

In summary, if the PCT has money left in its budget which it has not had to use for rent reimbursements, that money is not and cannot be added to NHSLA’s budget. Similarly, there is never any under spend by the NHSLA that could be transferred back to DH and on to any other body/agency (such as a PCT) because it juggles its budgets as necessary to meet its spending targets on individual areas. Therefore, there is no financial interdependence between the PCT and NHSLA and the outcome of any rent review such as in this case conducted by the NHSLA under the NHS Dispute Resolution Procedure cannot result in funds being diverted from the PCT to the NHSLA. The NHSLA has no financial interest, therefore, in determining a case in the PCT’s favour.

42.

The system under which PCTs are allocated central funding for the costs of primary medical services in their area and the system under which the NHSLA is funded for its various purposes are, as can be seen, entirely separate.”

Mr Karas relies upon the statement of the European Court of Human Rights in Bryan (supra) paragraphs 37-38, dealing with the “independence” of a UK planning inspector appointed by the Secretary of State, to this effect:

“In order to establish whether a body can be considered “independent”, regard must be had, inter alia, to the manner of appointment of its members and to their term of office, to the existence of guarantees against outside pressures and to the question whether the body presents an appearance of independence.

It is true that the inspector was required to decide the applicant’s planning appeal in a quasi-judicial, independent and impartial, as well as fair, manner. However, as pointed out by the Commission in its report, The Secretary of State can at any time, even during the course of proceedings which are in progress, issue a direction to revoke the power of an inspector to decide an appeal. In the context of planning appeals the very existence of this power available to the Executive, whose own policies may be in issue, is enough to deprive the inspector of the requisite appearance of independence, notwithstanding the limited exercise of the power in practice as described by the Government and irrespective of whether its exercise was or could have been at issue in the present case.

For this reason alone, the review by the inspector does not of itself satisfy the requirements of Article 6 of the Convention, despite the existence of various safeguards customarily associated with an “independent and impartial tribunal”. ”

Mr Karas also referred me again on this point to the Ringeisen case (supra) where the Court commented on the status of the tribunal in that case as follows:

“…the Court observes that the Regional Commission is a “tribunal” within the meaning of Article 6(1) as it is independent of the executive and also of the parties, it members are appointed for a term of five years and the proceedings before it afford the necessary guarantees…” (emphasis added)

So far as the NHSLA is concerned, it is pointed out by Mr Karas that the senior officers have terms of finite duration but are appointed by and may be removed by the SSH at any time: see the NHSLA Regulations 1995, reg. 5(1)-(3). It was this type of feature, he submitted, that led to the finding that temporary Sheriffs in Scotland, appointed under s.11 of the Sheriffs Courts (Scotland) Act 1971 were not “independent” of the Lord Advocate as prosecutor: Starrs v Ruxton (2000) SC 208. In contrast, the position of temporary judges of the High Court of Justiciary, appointed under s.35(3) of the Law Reform (Miscellaneous Provisions) (Scotland) Act 1990 was held to be different in Kearney v Lord Advocate [2006] HRLR 15. Of the scheme under the 1990 Act, Lord Bingham said:

“It is instructive to compare the position of temporary judges appointed under s.35(3) of the 1990 Act with that of temporary sheriffs appointed under s.11 of the Sheriff Courts (Scotland) Act 1971. When their position was examined in Starrs v Ruxton; Ruxton v Starrs 2000 S.C. 208, it was held that temporary sheriffs were not an independent and impartial tribunal within the meaning of Art.6(1) of the Convention. In the course of his opinion Lord Justice-Clerk Cullen identified the following points as leading to that conclusion at 226-230: (1) the fact that the Secretary of State’s power to recall their appointment in s.11(4) was without any qualification as to the circumstances in which it might be exercised; (2) the terms of the temporary sheriff’s appointment, which contained a temporal limit to the appointment of one year for which no authority was to be found in the statute, reinforcing the impression that the tenure of office by the individual temporary sheriff was at the discretion of the Lord Advocate; and (3) the restrictions which the Lord Advocate had applied in determining those who qualified for re-appointment, setting out the minimum periods of work which they were expected to perform and an age limit of sixty five for which too there was no sanction in the statute and could therefore change as one Lord Advocate succeeded another.

These factors were all absent in the case of temporary judges appointed under s.35(3) of the 1990 Act by July 2003 when Mr Macdonald was presiding over the trial in which the appellant was convicted. The Scottish Ministers had no power to recall his appointment during the period determined in accordance with para.5 of Sch.4 which was expressly stated in his commission of appointment. And the Lord Advocate had for all practical purposes withdrawn completely from any involvement in the reappointment of temporary judges after the period of their current appointment had come to an end. For all practical purposes, subject to consultation with the Justice Minister, these matters were now exclusively under the control of the Lord President as the head of the judiciary.”

At the beginning of the argument it had been assumed that Mr Paul Burns, the chief officer of the Appeal Unit (the effective decision maker in our case) was the “chief officer” referred to in the 1995 Regulations and so could be removed from that post directly by the SSH. However, it emerged that this was not so. While he is chief officer of the Unit, another person (called in practice the “Chief Executive”) is the “chief officer” of the NHSLA for the purposes of the Regulations. So, while this other person can be removed by the SSH, Mr Burns, like any other civil servant is dismissible only “for cause” within normal civil service employment procedures.

On this issue the Defendants stress the structural independence of the Appeal Unit and of Mr Burns, the decision maker, in particular as showing that any impression of lack of independence is illusory. They argue a number of features:

In my judgment, it is quite clear that the NHSLA, the decision maker in this case, is not independent of the executive. It is also not entirely independent of the parties for the reasons identified by the Claimants. There are clearly features in place which are designed to ensure that, notwithstanding a formal lack of independence, the procedures are conducted in an impartial and fair manner. It seems to me, however, that those features go to the question of composite compliance of the whole procedure with the requirements of Article 6 rather than to the isolated question of independence. I agree with Mr Karas that this is the real issue on this part of the case, on the hypothesis that Article 6 is engaged.

I now turn to that question.

As Ringeisen itself demonstrated on its decision on the facts, it is the composite procedure leading to the determination of the question in issue that is determinative of compliance with Article 6. The result of this case and of Koenig v Germany (1978) 2 EHRR 170 has led to the development of rules whereby it has become a requirement that all administrative decisions should be subject to some sort of judicial review: see per Lord Hoffmann in Alconbury paragraph 83.

In Albert and Le Compte v Belgium it was held that where the administrative organ did not have the necessary characteristics of independence, there must be a possibility of review by a court having the relevant attributes. The court stated:

“Nonetheless, in such circumstances the Convention calls at least for one of the two following systems: either the judrisdictional organs themselves comply with the requirements of article 6(1), or they do not so comply but are subject to subsequent control by a judicial body that has full jurisdiction and does provide the guarantees of article 6(1).”

In Alconbury Lord Hoffmann distilled this principle into the following:

“The reference to “full jurisdiction” has been frequently cited in subsequent cases and sometimes relied upon in argument as if it were authority for saying that a policy decision affecting civil rights by an administrator who does not comply with article 6(1) has to be reviewable on its merits by an independent and impartial tribunal. It was certainly so relied upon by counsel fore the respondents in these appeals. But subsequent European authority shows that “full jurisdiction” does not mean full decision making power. It means full jurisdiction to deal with the case as the nature of decision making requires.”

All parties agree that the sufficiency of the composite procedure of the administrative decision and the right of appeal to a court is determinative of the Article 6 question. Does the composite procedure here, the decision of the NHSLA (after compliance with its procedures) and the availability of judicial review, satisfy the requirements of the Article? Again all are agreed that, assuming a shortcoming in the independence of the original decision maker for Article 6 purposes, it is necessary to ask whether there is an adequate mechanism to cure that shortcoming.

The Claimants relied particularly in this respect on the case of Tsfayo v UK [2007] HLR 284. The applicant claimed housing benefit from the local authority. She was initially successful but failed to meet the authority’s requirement that such claims be renewed annually. In April 1998 her benefits (which had been paid directly in satisfaction of her rent liability) ceased. By September the landlord notified her of substantial arrears and in the October she made a fresh claim, seeking backdating of the payments to meet the arrears. Her claim was accepted from October 1998, but the claim for backdating was refused because she had failed to show cause for not making the claim earlier. She sought a review by the authority’s Housing Benefit Review Board, which comprised three councillors of the local authority. The Board upheld the authority’s finding. The applicant applied for judicial review. Permission to apply for judicial review was refused. On an application to the European Court it was accepted by the UK government that the Board was not an independent and impartial tribunal but it argued that, given the right to apply for judicial review, she had access to a court of “full jurisdiction” that could provide proper judicial control. The Court rejected that argument. It referred to the decisions in Bryan and Runa Begum and said,

“… In Bryan, Runa Begum and the other cases cited in para.[43] above, the issues to be determined require a measure of professional knowledge or experience and the exercise of administrative discretion pursuant to wider policy aims. In contrast, in the instant case, the HBRB was deciding a simple question of fact, namely whether there was “good cause” for the applicant’s delay in making a claim. On this question, the applicant had given evidence to the HBRB that the first that she knew that anything was amiss with her claim for housing benefit was the receipt of a notice from her landlord-the housing association-seeking to repossess her flat because her rent was in arrears. The HBRB found her explanation to be unconvincing and rejected her claim for back-payment of benefit essentially on the basis of their assessment of her credibility. No specialist expertise was required to determine the issue, which is under the new system, determined by a non-specialist tribunal (see para.[21] above). Nor, unlike the case referred to, can the factual findings in the present case be said to be merely incidental to the reaching of broader judgments of policy or expediency which it was for the democratically accountable authority to take.”

In this case, Mr Karas urges, the determination of current market rent by the NHSLA is a simple question of fact, or at least of evaluation, which is divorced from questions of discretion, and that judicial review is not adequate as a scrutiny of that decision.

In his written argument Mr Herberg said,

“In this case, the PCT’s determination, although embracing the Calculation, is not a ‘simple question of fact’ as in Tsfayo, but involves a question of policy, specifically of the budgetary targets of the PCT and the value for money of the rent sought to be reimbursed. Further, the Calculation itself, whilst a question of fact and not policy, does require the application of specialist expertise, which is why the District Valuer is consulted. The composite approach, therefore, still applies.”

This clearly harked back to the decision in Runa Begum in which the House of Lords held that the composite procedure was compliant with Article 6 in a case where the findings of fact were “only staging posts on the way to much broader judgments” concerning local conditions and the availability of alternative accommodation which the housing officer had the necessary knowledge and experience to make: see Lord Bingham in Runa Begum paragraph 9(2). Mr Herberg made similar submissions in the course of his helpful address to me; at that stage he referred me also to Lord Hoffmann’s speech in the same case at paragraph 56.

However, with respect to Mr Herberg, it seems to me that the question on this part of the case is as to the Article 6 compliance of the proceedings/decision of the NHSLA, not that of the PCT, just as in Runa Begum the issue was as to the decision of the reviewing officer not that of the authority whose decision was under review.

In my judgment, therefore, it is necessary to examine the “shortfall” in independence found in this case against the safeguards afforded by the procedures made available within the disputes resolution procedure itself and with the benefit of recourse to judicial review. Lord Bingham conducted such an exercise in relation to the facts of the case in Runa Begum. At paragraph 9(3) of his speech he said this:

“… section 203 of the 1996 Act and the Allocation of Housing and Homelessness (Review Procedures) Regulations 1999 (SI 1999/71) do provide safeguards that the review will be fairly conducted. Thus the reviewer must be senior to the original decision-maker (section 203(2)(a), regulation 2), plainly to avoid the risk that a subordinate may feel under pressure to rubber-stamp the decision of a superior. The reviewer must not have been involved in making the original decision (section 203(2)(a), regulation 2), to try to ensure that the problem is addressed with a genuinely open mind. The applicant has a right to make representations, and must be told of that right (regulation 6(2)). Such representations must be considered (regulation 8(1)). The applicant is entitled to be represented (regulation 6(2)). If the reviewer finds a deficiency or irregularity in the original decision, or in the manner in which it was made, but is nonetheless inclined to make a decision adverse to the applicant, the applicant must be informed and given an opportunity to make representations (regulation 8(2)). The reviewer must give reasons for a decision adverse to the applicant (section 203(4)). The applicant must be told of his right to appeal to the county court on a point of law (section 203(5)).These rules do not establish the reviewer as an independent and impartial tribunal, but they preclude unreasoned decision-making by an unknown and unaccountable bureaucrat whom the applicant never has a chance to seek to influence, and any significant departure from these procedural rules prejudicial to the applicant would afford a ground of appeal.”

In the present case, paragraph 95 of the PMS Regs, imported into the agreement between the parties, provides for the following: (1) the making of written representations to the NHSLA, (2) the provision of each side’s representations to the other side, (3) the possibility of oral representations (if so invited by the NHSLA) or, (4) if it consults with other persons of expertise, the NHSLA must afford to any party whose interests it considers might be substantially affected by the consultation an opportunity to make observations on the results. The NHSLA then has to consider the representations submitted and exchanged and the observations on the results of any consultation. Finally, the NHSLA reaches its decision and is obliged to give notice of it (including the reasons for it) to the parties, i.e. a reasoned decision is required.

This aspect of the case is complicated because of the involvement of the DV and the CEO VOA in these procedures at two stages. The DV is consulted initially by the PCT, as already explained. The CEO VOA is then almost invariably consulted after the matter is referred to the NHSLA under the disputes resolution procedure. The Claimants’ second ground of claim relates entirely to this aspect of the case; it is also at the core of the point on “apparent bias” under English law. For the moment, however, I shall concentrate on the position of the NHSLA and the procedure prescribed by the regulations themselves.

It seems to me that when one examines the role of the NHSLA one finds that the “shortfall” in independence is relatively slight. True it is that it is an emanation of the health service with all the features of inter-relationship with the SSH and with the PCT that are emphasised by the Claimants. These features have led me to conclude that it is not truly independent of the parties or of the executive. However, the structural separations and budgetary independence of the NHSLA give me ground to think that, in practice, much is done to separate the decision maker here from interested parties. The NHSLA is far more remote from the “paying” authority than was the reviewing officer in Runa Begum’s case who was an employee paid by the authority that would have had to provide the benefit. Thereafter the procedures put in place here are designed to ensure a transparency of procedure and an independence of decision making. Mr Burns, the relevant officer, is probably as close to an independent decision maker as most other civil servants could be, unless one were to put in his place a civil servant from an entirely “neutral” department (say, the Department of Justice).

Accordingly, the shortfall to be made up by judicial review is relatively slight. (I bear in mind that in Runa Begum, where the “shortfall” in the independence of the decision maker was greater and the areas of potential dispute far wider than here, the appeal to the county court on matters of law, under s.204 of the Housing Act 1996, was held to be sufficient.) The question is whether here the recourse to judicial review affords to the court “full jurisdiction to deal with the case as the nature of the decision requires” in order to meet the “shortfall”.

Mr Karas submits that it is the nature of a valuation exercise that there may be a range of possible answers where judicial review would not be able to detect any unconscious bias in the decision making process. He submits that the issue involved is like the issue of credibility of the applicant that arose in Tsfayo’s case. It is not capable of adequate review by a court whose powers are confined to issues of legality. For example, says Mr Karas, the weighting of comparables, a regular feature of rent review disputes, is not generally susceptible to judicial review unless perverse.

In this case, however, I do not see that any case of apparent bias could be levelled against the NHSLA, if one puts aside (as I have done for the present) the role of the CEO VAO. The criticism of the procedure by reference to the NHSLA is made on the basis of a lack of independence of the NHSLA in the structural sense; it is not said that a decision of the NHSLA as such would be tainted by bias. Indeed, it has been one of the planks of the Claimants’ case that the problem here could be “cured” by the simple device of the NHSLA consulting (under regulation 95(10)(b)) with an independent chartered surveyor rather than with the CEO VAO. The NHSLA would then be left as the decision maker and, on the Claimants’ case, Article 6 would be satisfied.

In my judgment, looking at the role of the NHSLA and the disputes procedure alone, the availability of judicial review does make up any technical “shortfall” in the independence of the NHSLA in this procedure as a whole.

It seems to me that the decision maker with appropriate expertise, or with the assistance of a person with such expertise, is capable of making a fair determination in accordance with the prescribed procedure. The task is one of evaluation of largely open, written materials and the taking of a decision on them. In the absence of bias, such a task seems to me to be fairly resolved by a procedure such as the present when supplemented by the court’s powers on judicial review. This court can supply the legal input that may be deficient in a system that is, on this hypothesis, only marginally lacking in independence. In my judgment, the case would be akin to Bryan and Alconbury. There cannot really be said to be a lack of independence in the NHSLA’s decision making process as such and accordingly the limited jurisdiction on judicial review can be seen to be acceptable.

Bias, however, actual or apparent, is another matter. The decision of Moses J (as he then was) in R (Bewry) v Norwich City Council [2001] EWHC Admin 657 is informative here. In that case, the judge had to consider a claim that a Housing Benefit Review Board lacked the appearance of an independent and impartial tribunal, and thus contravened the right to a fair trial on common law principles and under Article 6. The problem was that the Chairman and two other members of the Board were councillors of the City, the paying authority in the case. The issue before the Board was whether the applicant did in fact pay rent either to the landlord or his agent so as to qualify for benefit: see paragraph 9 of the judgment. (The facts were, therefore, very close to those of the later case of Tsfayo (supra).)

In the Bewry case, Moses J concluded as follows:

“In my judgment, the connection of the councillors to the party resisting entitlement to housing benefit does constitute a real distinction between the position of an inspector and a Review Board. The lack of independence may infect the independence of judgment in relation to the finding of primary fact in a manner which cannot be adequately scrutinised or rectified by this court. One of the essential problems which flows from the connection between a tribunal determining facts and a party to the dispute, is that the extent to which a judgment of fact may be infected cannot easily be, if at all, discerned. The influence of the connection may not be apparent from the terms of the decision which sets out the primary fact and the inferences drawn from those facts. But the decision does not, and indeed should not, set out all the evidence.

The weight and impression given by that evidence will be a matter for the judgment of those before whom it is presented. The extent to which they have been influenced will not be manifest from the decision and it may indeed be something of which they themselves are unaware. That is, after all, the origin of the principle which determines the question of bias in terms of risk and not of actual bias. Real possibility and real danger are necessarily tests for the very reason that actual bias cannot readily be demonstrated.

Thus there is no answer to a charge of bias to look at the terms of a decision and to say that no actual bias is demonstrated or that the reasoning is clear, cogent and supported by the evidence. This court cannot cure the often imperceptible effects of the influence of the connection between the fact-finding body and a party to the dispute since it has no jurisdiction to reach its own conclusion on the primary facts; still less any power to weigh the evidence.

Accordingly, I conclude that there has been no determination of the claimant’s entitlement to housing benefit by an independent and impartial tribunal. The level of review which this court can exercise does not replenish the want of independence in the review Board, caused by its connection to a party to the dispute.”

Accordingly, there had been a breach of Article 6. It is particularly noticeable that the judge reached his conclusion with great reluctance since the decision was found to bear all the hallmarks of a cogent and independent judgment: see paragraph 66 of the judgment. So the appearance of bias could only flow from the connexion between the decision maker and one of the parties; no suspicion of the possibility of actual bias could have arisen otherwise.

In my judgment, if, on common law principles, there can be shown to be a taint of bias in the decision making process by the involvement of the CEO VOA, then equally the challenge under Article 6 would succeed if (contrary to my decision above) that Article was engaged.

I now turn to the question of “bias” at common law.

As Mr Karas put it in his “speaking note” for his oral submissions, the issue is whether the NHSLA was wrong to make a decision to continue with the appointment of the CEO VOA to assist it because it would appear to the fair minded observer that there is a real risk that the VOA would be biased; the question for resolution in the dispute is the current market rent and one of the VOA’s employees, namely the DV, has been advising one of the parties throughout.

In R (PD) v W Midlands and NW Mental Health Review Tribunal [2004] EWCA Civ 311 the Court of Appeal considered the evolution of the common law principles and endorsed the summary of the law as stated by Silber J at first instance in that case in the following terms:

“ “(a) in order to determine whether there was bias in a case where actual bias is not alleged “ the question is whether the fair-minded and informed observer, having considered the facts would conclude that there was a real possibility that the Tribunal was biased” (per Lord Hope of Craighead in Porter v Magill [2002] 2 AC 357 at 494 [103]). It follows that this exercise entails consideration of all the relevant facts as “the court must first ascertain all the circumstances which have a bearing on the suggestion that the judge was biased” (ibid [104]).

(b)

Public perception of a possibility of unconscious bias is the key. It is necessary to delve into the characteristics to be attributed to the fair-minded and informed observer. What can confidently be said is that one is entitled to conclude that such an observer will adopt a balanced approach. This idea was succinctly expressed in Johnson v Johnson [2000] 200 CLR 488, 509 at paragraph 53 by Kirby J when he stated that “a reasonable member of the public is neither complacent nor unduly sensitive or suspicious”” (per Lord Steyn in Lawal v Northern Spirit Limited [2003] ICR 856, 862 [14]).

(c)

in ascertaining whether there is a case of unconscious bias, the courts must look at the matter by examining other similar analogous situations. “One does not come to the issue with a clean slate; on the contrary, the issue of unconscious bias has cropped up in various contexts which may arguably throw light on the problem. (Lord Steyn in Lawal v Northern Spirit Limited (supra), 862 [15]).

(d)

the approach of the court is that “one starts by identifying the circumstances which are said to give rise to bias .. [a court] must concentrate on a systematic challenge and apply a principled approach to the facts on which it is called to rule” (per Lord Steyn in Lawal v Northern Spirit Limited (supra), 864-5 [20])

(e)

the need for a Tribunal to be impartial and independent means that “it must also be impartial from an objective viewpoint, that is it must offer sufficient guarantees to exclude any legitimate doubt in this respect” (Findlay v United Kingdom (1997) 24 EHRR 221 at 224-245 and quoted with approval by Lord Bingham of Cornhill in R v Spear [2003] 1 AC 734 [8]”

It is also apparent that a decision may be tainted with bias if the decision maker has consulted, or was permitted to consult, a person who himself was tainted with apparent bias. This appears from the case of R v Sussex Justices, ex p. McCarthy [1924] 1 KB 256 which led to the famous remark of Lord Hewart CJ about justice being “seen to be done”.

In that case, the applicant had been charged with and convicted of dangerous driving. The deputy justices’ clerk in the case was the brother and partner of the solicitor acting in civil proceedings for the other driver involved in the incident that resulted in the prosecution. The deputy clerk retired with the justices when they went out of court to make their decision. Although, as the court accepted, the clerk had not contributed to the decision and the justices did not know of his and/or his brother’s involvement in the related civil proceedings, the decision was tainted and the conviction was quashed.

The factual analysis of the case before me is further assisted by the subsequent decision of the House of Lords in Gillies v SS for Work and Pensions [2006] 1 WLR 781, to which I shall return.

It is necessary now to look a little more closely at the underlying facts which give rise to the claim of apparent bias and to the Defendants’ response thereto.

In this case, matters start with the reference of this matter by the PCT to the DV. Under cover of a short manuscript note of 16 November 2004, Mr Croft of the PCT sent to Mr Swainson, the DV for Lincolnshire, a clip of correspondence, which PHIP’s agent had sent to the PCT, concerning the rent review under the lease. Mr Croft’s note read: “Please undertake the necessary rent negotiations on behalf of [the PCT]”. (My emphasis)

The DV’s file in this matter has been disclosed in the course of these proceedings. To the uninitiated, the file appears to be precisely what one would expect from a file of any surveyor in private practice acting for a client on an ordinary commercial rent review. It contains the correspondence with the Doctors’ surveyor and notes of telephone and other conversations, negotiating the matter, some of which appear to have been “without prejudice”, communications with the “clients” (the PCT) and notes of billing and so forth.

In evidence in the proceedings, however, Mr. Graham Stalker, the Head of the VOA Health Sector Policy and Liaison Valuer to the Department of Health and to the Appeals Unit, says this:

“It has however been a fundamental principle since the inception of the scheme that in assessing CMR the role of the District Valuer is to stand independent of both parties and impartially determine the appropriate figure. The Department of Health has always required the District Valuer’s assessment to be objective and unbiased.

The impartiality of the District Valuer and the inability of the PCT to influence the level of a District Valuer’s CMR have been deliberate features of the Scheme from the outset, restated over the years in various discussions between the Department of Health, British Medical Association, VOA and NHSLA (FHSAU), to ensure that CMR assessments are immune from being influenced by any financial pressures or budget restraints bearing on the PCT.

The function of the District Valuer in making a CMR assessment is to ensure that the GP receives the correct level of remuneration from the public purse – no more and no less- and the District Valuer has no vested interest in whether the level of the CMR figure arrived at is high or low.

Therefore although the request to undertake an assessment is received from the Primary Care Trust (PCT), the District Valuer does not act as an agent of the PCT when carrying out the task and this principle is clearly stated in the District Valuer’s guidance and training material on DRRS casework.”

The “guidance” referred to by Mr Stalker has also been disclosed. It appears that it was issued in September 2005 and was sent out to DVs over Mr. Stalker’s own printed signature. In that document the following passage appears:

“The District Valuer receives case instructions for the DRR Scheme from the PCT (Health Boards in Scotland and Wales). The PCT is the client in so far as it is to the PCT that the DV will issue the report and send the invoice. For the avoidance of doubt, GPs are independent contractors (rather than part of the NHS) and DVs will not act for them.

Since the Scheme’s inception, it has been a fundamental principle that the role of the District Valuer in assessing CMR figures for GMS practices is to act impartially in arriving at an appropriate figure, standing between the parties. The DV is independent of both parties in the sense that the DV’s purpose is not to act as an agent of the PCT or in an adversarial capacity, neither does the DV act on behalf of the GP.

The function of the District Valuer in supplying the CMR figure for GMS practices is to ensure that GPs receive the correct level of remuneration from the public purse-no more and no less. The District Valuer has no vested interest in putting the level of the CMR figure either high or low. Although instructed by the PCT, the DV is effectively “divorced” from that body so that the PCT is unable to influence the CMR level.

This is deliberate as a fundamental aspect of the Scheme, as agreed with the BMA, has always been a requirement to ensure that the impartial valuer’s decisions are immune from any financial pressures bearing on the PCT and are not influenced by any local cost limitations or budget restraints.”

It seems from its terms, however, that this part of the guidance applies to GMS practices only. PMS agreements are covered in Section Y of the document, which outlines the basic differences between PMS and GMS contracts. The section includes only the following short passage upon the role of the DV in rent matters affecting PMS practices:

“A PCT can properly seek advice from the DV as to the property element of PMS contract payments and can ask the DV to give CMR valuations and enter into negotiations with the PMS GP practices.”

It is not suggested there that the DV in providing his advice would be acting other than on behalf of the PCT in such a case. As has been seen, in this case the DV was asked expressly to act “on behalf of” the PCT

There seems to be little doubt that in this case the DV was instructed to act, and did act, on behalf of the PCT just like any other surveyor advising in a rent review context. It is proposed that he should continue to do so in the dispute resolution procedure. Taking Mr. Stalker’s evidence into account, it seems that the DV’s role may not be entirely clear within the VOA itself. There may well be present in the DV’s mind some concept of acting aloof and independently of the PCT. However, apart from that evidence and parts of the Guidance to which I have referred (which may not be applicable in PMS cases at all) the public perception of this case would clearly be that the DV was acting in all senses as the agent of the PCT and as its expert adviser in the negotiation of the present matter at its initial stages. It was also to represent the PCT in presenting its case to the NHSLA.

The Guidance issued by Mr. Stalker also goes on to give advice to DVs as to their role in cases where the matter is referred to the NHSLA for decision and upon how their representations to the NHSLA should be presented. It is clear from the Guidance that it is expected that in most such cases the NHSLA will consult the CEO VOA. The Guidance states the objectives in requesting a report from the CEO VOA as follows:

“The FHSAU’s requirements in requesting a report from the CEO valuer are:

•

To obtain a factual description of the GP’s premises and their location

•

To obtain a factual account of the GP’s views and supporting evidence on the valuation of the property as set out in the GP’s representations.

•

To obtain a factual account of the DV’s views and supporting evidence on the valuation of the property as set out in the DV’s representation and case file.

•

To obtain an opinion on the weight to be attached to all the evidence presented by the GP and the DV. The CEO Valuer’s report is not a valuation and therefore the CEO Valuer does not introduce fresh evidence.

•

To obtain the CEO valuer’s recommendation for consideration.

The arrangements are regarded as providing an effective and through professional review of the local DV decision by senior members of the Valuation Office centrally, who act in this matter quite independently of the Health Bodies and local District Valuers and who will make an informed recommendation to the FHSAU, with whom the final decision lies.”

A later note states:

“To avoid the potential danger of the CEO valuer responsible for FHSAU cases commenting on a DRRS case during its initial stages and that case later being subject to the representations procedure, the CEO valuer will not in any circumstances advise on, or discuss the details of, any specific DRRS case with a local District Valuer at any stage in its life from receipt of the initial valuation request from the PCT.

Local DVs exercise their own professional judgment and are not subject to direction on any particular DRRS case from the CEO valuer.

No discussion is permitted between the CEO valuer and the DV about any of the pertinent details of the case which is the subject of the representations procedure, apart from the contact to request the DV’s written submission and case file. ”

The provision of the DV’s case file to the CEO VOA, as required by this standard practice, appears strange and disconcerting to those used to the conduct of litigation or even non-litigious rent review matters, either by way of arbitration or expert determination. (Footnote: ²) It would be unheard of in such matters for the judge, arbitrator or independent expert (or anyone advising him) to see the case file of the expert who has acted on behalf of one of the parties. Inevitably such files contain materials, such as records of or references to “without prejudice” negotiations, which would be privileged to both parties and would never be disclosed to the decision maker. If any such material were to be disclosed to the decision maker it would have to be disclosed equally to the other party.

In evidence, Mr. Stalker explains the rationale behind this practice in these cases as follows:

“The rationale behind requesting the case file in its entirety is to safeguard the interests of the GPs from being disadvantaged in an appeal as, historically, a majority of the GPs who were involved in these disputes were not represented and would often put in submissions, or they would include weak submissions. GPs do not have to be professionally represented to appeal a CMR. If the entire case file is sent to the CEOV then it ensures that the GP’s position is protected. The purpose of calling for the DV’s files is to ensure that nothing of substance has been inadvertently missed from the parties’ contentions, whether helpful to the view expressed by the DVor the GP. It ensures that no relevant points raised earlier have been omitted by the GP, as sometimes occurs in preparing their representations particularly if not assisted by an agent.

Now that most GP’s are professionally represented in an appeal, the above mentioned rationale does not apply.

Therefore, from August 2008 the CEOV has not routinely called up the DV’s case file or core rating file as GPs are now seldom without professional representation to assist with their submissions.”

The revision to this procedure in August 2008 there mentioned reflects revised Guidance notes, of which a computer version dated 20 August 2008 was produced during the hearing. The revised passage now reads,

“ … The DV should not forward their case file to the CEO valuer unless a specific request is made.

A case file request will be rare and only likely to be made where the GP in the appeal is unrepresented, the purpose in these circumstances being to ensure that nothing of substance has been inadvertently missed from the parties’ contentions, whether it be helpful to the DV’s view or to that of the GP and to ensure that the CEO valuer’s recommendation to the FHSAU can be based on all the best information available.”

Clearly, the CEO VOA considered the old procedure to be unsatisfactory. In my view, even in its revised form, it still is.

Mr Karas argued that the objectionable internal relation between the DV and the reviewer was compounded in this way by the practice of the reviewer, without the knowledge to one of the parties, receiving the DV’s file, with all the features that I have described.

Mr Coppel argued that there is no disadvantage in this from the doctors’ point of view because the file remains with the CEO VOA; it is not sent to Mr Burns as decision maker; everything from the file that is relied upon by the CEO valuer would be drawn to the attention of both parties: see paragraph 23 of Mr Stalker’s second statement. I am not impressed by that submission: it seems to me that elementary fairness in any decision making process requires that the parties should have seen all the documents in the case that are presented to the decision-maker and/or any adviser that the decision-maker may consult. No decision-maker in a formal dispute such as this, or his adviser, in any other field known to English law, would obtain the file of one party’s expert and only disclose to the other party the fact that he had that file or any material derived from it if he saw fit.

In the NHSLA’s grounds of resistance (paragraphs 59-61) it was argued that the DV’s role in the performance of other statutory duties, e.g. under the Housing Acts, was akin to an “office holder”. It was said that the DV is independent and that his functions were “quasi-judicial” in nature. I do not think that this analogy with the DV’s other statutory functions was pressed by Mr Coppel in oral argument. He was content to emphasise the separation of the local DV in cases such as the present from the officer within the CEO VOA who advises the NHSLA in such matters. In any event, in the first instance, it is the PCT that makes the initial decisions (whether under paragraph 31(b) of the Premises Costs Directions or otherwise), with advice from the DV or such other surveyor as it may consult, and in the disputes procedure it is the Appeal Unit that decides, having taken its advice from the CEO VOA, or any other person it chooses to consult, whether under paragraph 95(10)(b) of Schedule 5 to the PMS Agreements Regs. or otherwise. In each case, the DV/CEO VOA is no more than the adviser to the decision maker.

The thrust of Mr Karas’s submission on this point was that the NHSLA, the decision maker, relies upon a review (rather than a revaluation – see the Guidance) made by someone within the same organisation as the person whose decision is reviewed. It might well be added that the Guidance states expressly that the process is simply a “review of the local DV decision”, whereas, of course, the true function is not that at all but rather to advise the NHSLA in the dispute in the light of upon all the materials submitted, including the evidence and opinions submitted by the doctors and their expert. The representations of the DV on behalf of a PCT are only one part of the picture and are no more important in the process than those of the doctors’ surveyor. The focus on the review of the “DV’s decision” alone in that passage is revealing, although Mr Stalker in his second witness statement says that the CEO valuer carries out the exercise afresh and does not simply supervise the work/methodology of the DV.

Mr Karas argues, by analogy, that a solicitor could not act as legal assessor to the arbitrator in a rent review arbitration where a junior solicitor from his firm (even from another office) had advised one of the parties as a client of the firm in that particular arbitration. He submits that the position of the CEO valuer here is the same.

In my judgment, Mr Karas’s analogy is a good one, subject only to whether the problem is cured by the public nature of the NHSLA’s role and the public nature of the CEO VOA, together with the exhortations to independence referred to by Mr. Stalker, which might be thought to stand the DV/CEO VOA apart from the more commercial background of the hypothetical solicitors’ involvement in Mr Karas’s example. In my judgment, the time has long since passed when a public body can necessarily be so regarded. Neither the DV nor the CEO VOA is performing a public statutory function here; the DV is acting for the PCT and the CEO VOA’s role is simply like that of any other adviser that the NHSLA might choose to consult. Moreover, it is clear that in many ways the VOA is positively encouraged to act in general like any other commercial organisation.

Mr Karas took me to various sections of the VOA’s published materials which he submitted were illustrative of this trend that strives for a commercial approach to the VOA’s work. For example, its internet site reveals the following passages in its publicity material:

“District Valuer Services is a dedicated valuation, surveying and property business within the Valuation Office Agency. Our public sector background means we have a unique understanding of the needs of our clients. We specialise in providing an independent and impartial service that fully meets financial audit requirements, and can offer all round value for money at competitive prices. …

Our commitment to quality customer service means we provide solutions tailored specifically to the needs of our clients, we develop close working relations with them, and we continually strive to improve the service we provide. …

Our clients

We serve a wide range of clients drawn from all parts of the public sector, with whom we work in partnership, matching our professional expertise to their particular requirements. …

Our clients include …

NHS trusts, Primary Care Trusts and Health Boards. ”

(emphasis added)

The Framework Document for the VAO includes the following passages. First, in the Foreword by the Paymaster General one finds this:

“In autumn 2000 I presented the Valuation Office Agency with a challenge to turn itself into a “right-first-time” organisation, able to meet the rising expectations of its customers in an increasingly efficient and customer focused way. …

This revised framework document captures and underpins that vision and strategy: setting out the aim, objectives and priorities of the Agency and the framework of responsibilities and authorities within which it operates. In addition, Ministers will continue to set stretching targets for the efficiency and quality of service to be provided by the Agency for all its clients and customers in annually agreed forward plans.”

In the document itself these passages appear:

“The Agency conducts its operations through a network of local offices and specialist teams. The Chief Executive’s Office, although based in London, includes a substantial number of post-holders located in various parts of the country. …

The Agency operates on a net control arrangement, recovering the full resource cost of its funding from the clients for whom it provides valuation services. …

Financial Objectives

The financial objective of the Agency is to recover the full economic costs of its operation, within each business segment, through charges for the services it provides.”

The VOA’s annual report for 2007-8 includes, for example, these passages:

“To meet all our customers’ objectives and maximise customer satisfaction by: …

•

Working effectively with partners

•

Delivering excellent value for money, while covering our costs…

District Valuers were responsible for regional level units. They supported HMRC with valuations for capital gains tax and inheritance tax purposes. They also work with a range of other public sector organisations, competing for the business on the open market, to deliver valuations and property advice.

Putting the Customer at the Heart of Agency Business

The customers or clients who pay for the services of the VOA are, generally speaking, other public sector bodies. However, to deliver our statutory duties for council tax and rating, the Agency works with a vast range of customers, from individual council taxpayers to multi-national companies, meeting the needs of these segments as well as the diversity of customers in between.”

The documents also show that the VOA is as anxious to preserve “client satisfaction” and its revenue stream as any other commercial organisation. “The Report of the 2000 Review of the Valuation Office Agency” includes the following passage at paragraph 8.6:

“The VOA’s performance in delivering its other land valuation services

In recent years, the Inland Revenue has failed to forecast accurately the level of work that they require from the VOA, largely owing to changes in workflow arising from the introduction of Self Assessment. The trend has been a decline in the demand - from £21 million in the year ended 31 March 1998. The unreliability of the Inland Revenue’s forecasts, and unplanned decline in demand, have caused difficulties for the VOA in managing its resources and finances. It will be important for the future that the Inland Revenue forecasts its demand more accurately and that the VOA manage its resources more flexibly in response to the variable demand.

The volume of other land valuation services carried out by the VOA has also declined, from £22m in the year ended 31 March 1995 to £14m in the year ended 31 March 2000. The current breakdown of land valuation services clients is:

•

NHS Estates (31 per cent) …

A client survey conducted in 1999, however, shows increased levels of satisfaction among clients compared with the year ended 31 March 1994, and income in the year ended 31 March 2000 was above that in the previous year.”

The “Right First Time” culture, appearing in the Paymaster General’s foreword to the Framework Document (quoted above) extends to rating functions and to work for “other land valuation services clients” alike; the same Report contains the following:

“The valuations that the VOA undertakes for the Inland Revenue and other land valuation service clients can also be right first time, although the measurement of “right” in this context will rest on meeting each client’s specific needs. This will mean the VOA understanding its clients’ objectives and ensuring that its valuations are suited to meeting those objectives. It will also mean ensuring that its valuations are completed on time and within the price agreed with the client.”

It seems to me, therefore, that the perception of the fair minded observer would be that the VOA in its two roles in these cases is no different from any other expert surveyor advising a client. The DV advises and represents the PCT (a party to the dispute) and the CEO VOA in turn advises the NHSLA (the decision maker). The independence of the DVs of which Mr Stalker speaks in his evidence is, in reality, no more than a qualified independence within the constraints of the commercial objectives of the VOA organisation as a whole.

The evidence of Mr Stalker testifying to the independence of the DV and the CEO VOA in these cases can, in my view, go no further in dispelling any apparent bias than did the justices’ affidavit in the Ex p. McCarthy case (supra), testifying the to the scrupulously fair manner in which the deputy clerk had in fact behaved in the case before them. In that case Lord Hewart said (at p. 259):

“Speaking for myself, I accept the statements contained in the justices’ affidavit, but they show very clearly that the deputy clerk was connected with the case in a capacity which made it right that he should scrupulously abstain from referring to the matter in any way, although he retired with the justices; in other words his one position was such that he could not, if he had been required to do so, discharge the duties which his other position involved. His twofold position was a manifest contradiction…I am satisfied that there has been no waiver of the irregularity, and, that being so…the conviction [must be] quashed.”

Finally, I must refer to two further cases. The Gillies case mentioned above and R v SS for the Environment, ex p. Norwich City Council [1982] 1 QB 808.

In the Gillies case the claimant was an applicant for a disability living allowance. His application was refused and a disability appeal tribunal refused his appeal. The medical member of the tribunal, which consisted of a legally qualified chairman and two others, including the medical member, was a doctor who for number of years had provided reports on behalf of the Benefits Agency (the paying body in the case) in disability living allowance and incapacity benefit cases as an examining medical practitioner. The claimant alleged that this feature tainted the tribunal with apparent bias. This contention was rejected by the Court of Session and by the House of Lords. It was held that the issue of law that arose was whether a fair minded person would conclude that there was a real possibility that the medical member would not evaluate reports by other examining medical practitioners objectively and impartially. The House of Lords held that there was no such possibility. It was said that the hypothetical fair-minded observer would understand the difference between the medical member looking at the issues before the tribunal with a predisposition to prefer the views of the examining medical practitioner and drawing on her own knowledge and experience when testing those views against other evidence.

Lord Hope of Craighead in his speech in the Gillies case assessed the facts before the House in this way:

“It is important to stress at the outset that the facts do not support the claimant’s primary argument that Dr Armstrong was to be seen as a Benefits Agency doctor or that she was in some other way aligned with the Benefits Agency. The tribunal commissioners and their Lordships of the First Division were in agreement on this point. Her relationship with the Benefits Agency was as an independent expert adviser. Her advice was sought and given because of the skills that she was able to bring to bear on medical issues in the exercise of her professional judgment. A fair-minded observer who had considered the facts properly would appreciate that professional detachment and the ability to exercise her own independent judgment on medical issues lay at the heart of her relationship with the benefits Agency. He would also appreciate that she was just as capable of exercising those qualities when sitting as the medical member of a disability appeal tribunal.”

He went on to say this:

“The question then is whether there were grounds for thinking that Dr Armstrong was likely to be unconsciously biased when she was examining medical evidence because of a predisposition to prefer the EMP report as against any contrary evidence due simply to her current involvement in providing reports as an EMP. Doctors holding current engagements to provide these reports can be assumed, no doubt, to have a special interest and experience in this kind of work. The group of doctors to which they belong can also be distinguished from NHS doctors generally, as was pointed out by the tribunal of commissioners. But why should these facts be said to lead to the conclusion that there was a real possibility that she was biased in favour of the views expressed by the EMP?

The weakness of the argument that this was a real possibility is exposed as soon as the task that Dr Armstrong was performing as an EMP is compared with the task which she was performing on the tribunal. In each of these two roles she was being called upon to exercise an independent professional judgment, drawing upon her medical knowledge and her experience. The fair-minded observer would understand that there is a crucial difference between approaching the issues which the tribunal had to decide with a predisposition in favour of the views of the EMP, and drawing upon her medical knowledge and experience when testing those views against the other evidence. He would appreciate, looking at the matter objectively, that her knowledge and experience could cut both ways as she would be just as well placed to spot weaknesses in these reports as to spot their strengths. He would have no reason to think, in the absence of any other facts indicating the contrary, that she would not apply her medical knowledge and experience in just the same impartial way when she was sitting as a tribunal member as she would when she was acting as an EMP.”

Mr Coppel submitted that the professionalism of the VOA valuer in these cases can be regarded as a similar benefit to the NHSLA as that of the medical examiner in the Gillies case and did not undermine his independence. In my judgment, however, the facts are very different. There was no question in the Gillies case of the tribunal being advised or influenced by a doctor who was from the very same organisation as the medical examiner acting for the Benefits Agency which was a party to the dispute. That was not a case where the examining doctor and the medical member were bound in a business sense by the same organisation’s policy objectives in conducting a business in which both were engaged. Nor would the medical member, unknown to the applicant, call for the file of the examining medical practitioner or thereby have the opportunity to see any confidential advice given by the EMP to the Benefits Agency in the case before the tribunal. Such factors in the Gillies case, in my judgment, would have rendered the result different.

Finally, there is the Norwich case (supra). The main interest of that case is that it too involved the role of the District Valuer in a very different context. The case concerned the “right to buy” legislation in respect of council owned dwellings. It seems that the council appeared to the Secretary of State to be a reluctant participant in the scheme introduced by that legislation. Tenants were complaining about the delays by the council in making initial valuations for the purpose of the scheme; they complained that the council, unlike some other authorities, was not using the services of the DV for that purpose. The Secretary of State invited the council to adopt a quicker procedure and to use the DV to fix the initial prices. The council responded by saying that it would be unlawful for them to use the DV’s department for that purpose in view of the appellate role of the DV or his deputy under the legislation. Thereupon, the Secretary of State gave notice of his intention to use statutory powers to intervene in the process. The council applied for an order of certiorari to quash the minister’s decision. The claim was rejected.

Lord Denning MR in his judgment in the Norwich case said this:

“Pointing to section 11, the Norwich City Council said that the district valuer was like an appeal body. He should not be employed to make the initial valuation where he would sit on appeal from it to make the final valuation. That point impressed me much for some time. It seemed contrary to the accepted principle that “justice should not only be done, but should be manifestly and undoubtedly be seen to be done”: see per Lord Hewart C.J. in Rex v. Sussex Justices, Ex parte McCarthy [1924] 1 K.B. 256, 259 and F.G.C. Metropolitan Properties Co. Ltd. V. Lannon [1969] 1 Q.B. 577, 599. But this principle-like that of natural justice-must not be carried too far. It is flexible and must be adapted as the case may require.

Mr. Simon Brown showed us good reasons why it did not apply here. The “district valuer” is the valuation officer or the deputy valuation officer for the district: see section 27 (2) of the Housing Act 1980. His ordinary work is to make valuations for the rating list. The practice there is, as I understand it, for one of those in his office to prepare the draft valuation list: and then, if any ratepayer objects and proposes a different figure, for someone else in the office-the valuation officer or his deputy-to revise the valuation. That system is in accord with the Rating Acts. It works perfectly well in rating cases. A similar system is applied in these valuations under the Housing Act 1980. The initial valuation under section 10 (1) (on which the local council fixes the price) is made by one of the clerks in the office. If the tenant takes objection and refers the matter to the district valuer under section 11, then the decision is made by the valuation officer himself or his deputy. This system works perfectly well. That is shown by the fact that in 50 per cent. of the cases the valuation is reduced: and also by the even more striking fact that no tenant has ever taken any objection to the system. The only person to take objection has been Norwich City Council.

So justice is in fact done by reason of the final valuation being done by a senior officer quite distinct from the one who made the initial valuation. It is seen to be done by reason of the fact that no tenant has ever complained of it.”

Mr Herberg for the SSH who helpfully took me to the material parts of this case said that he did not put it at the forefront of his submissions on the present point, but said that the case was a useful “cross check” of a result based on the primary tests already set out.

In the end, I agree with Mr Karas’s submissions on this case. All must depend on the factual circumstances surrounding the DV’s involvement in any particular contentious matter. In the Norwich case the appellate role of the DV was a clear and distinct statutory function where he was required to act in a quasi-judicial role. He would not have been acting as an advisor to the council as a decision-maker on any appeal; the decision was to be his independent decision alone. His role was prescribed by the Act itself; he was not, as here, merely one of a number of experts whom the decision-maker might choose to assist him. I can put the matter no better than Mr Karas did in his written “speaking note” for his reply in the following terms:

“The issue raised by the Council was whether or not the Secretary of State was entitled to take into account the existence of the DV to assist in s.10 valuations when deciding to intervene. … In Norwich the suggestion that there might be a perception of bias was in essence by the party in whose favour the bias (if there was any) would have been perceived to exist. The absence of objection by the tenants, therefore, was in fact material to the claim that the Secretary of State was entitled to take account of the possible assistance of the DV to the City Council. If the tenants did not object, the involvement of the DV could not be challenged and the DV would be available. There was no objection from anyone else affected and the system was very widely used indeed. … It is significant, however, that Kerr LJ considered that the Secretary of State could not have insisted on the local authority using the DV for the section 10 valuation whatever the circumstances (see p 835 A-C). The important point to note, however, was that whether or not there might be a perception of bias (and whether it might be waived) in any particular case raised by a particular tenant was not in issue: the issue was whether the availability of the DV to assist in s.10 valuations could be taken into account as a material consideration in the SoS’s intervention.”

I would add that in the Norwich case it was clear on the facts that the tenants had not taken any objection to the minister’s proposed procedure and indeed positively wanted the DV to fix the initial valuations. So the case was unlike the case of Ex p. McCarthy or the present case where the party against whom any perceived bias might operate did take the objection.

In my judgment, the adverse perceptions raised by the facts of this case, about the roles of the DV/CEO VOA, cannot be overcome by what I am sure is the fact that individual VOA valuers will strive to act professionally, and, as far as they can do so, independently of each other, in their respective roles in cases such as this. On the facts of this case, the connexions between the DV (acting for the PCT at all stages) and the CEO VOA (advising the NHSLA as decision-maker in the dispute) are too close for justice to be “seen to be done” and the Claimants objection on this ground must prevail. If the case had engaged Article 6 (which I have found it does not) then this factor would result in the procedure falling foul of that Article also.

Conclusion

For these reasons, this claim for judicial review succeeds on the “apparent bias” ground alone. I hope that Counsel will be able to agree a form of order, but, if necessary, I will obviously hear the parties on any question arising.