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Service charge claims reduced in legal settlement

by Anna Colivicchi
12 June 2023

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Service charge claims by NHS Property Services (NHSPS) have been substantially reduced for five GP practices after legal action led by the BMA.

The reductions range from £25,000 to more than £400,000.

The BMA launched a legal claim in January 2020 over the ‘astronomical’ rises in charges faced by GPs and claimed a victory the following September, when NHSPS ‘conceded’ that the policy could not vary GP practice contracts.

But in February 2021, NHSPS launched a counter-claim worth £1.3m against the BMA’s ‘test case’ regarding NHSPS’ 2017/18 ‘national charging policy’.

Following a trial in March last year, High Court judge Mr Justice Edwin Johnson’s written judgement ruled in favour of NHSPS in its disputes with all five practices.

But his 170-page ruling added that he ‘will hear the parties on the precise terms of the orders to be made in the five actions consequential upon this judgment’, to the extent that they ‘cannot be agreed between the parties’ – ie how much the practices will actually be required to pay.

The BMA assisted the five practices in settling with NHSPS the fees and service charges sums outside of court, for the period between 2013/14 and 2019/20, securing reductions on the amounts claimed by NHSPS for the five practices ranging from £25,000 to more than £400,00 – a total reduction of more than £750,000. 

Dr Gaurav Gupta, BMA England GP Committee premises lead, said: ‘I am delighted that, with support from the BMA, these five practices have been able to achieve long-awaited reductions to their NHSPS service charge claims. 

‘This is a ground-breaking lawsuit, and these settlements vindicate the practices’ assertion that, for years, NHSPS has been claiming unduly high levels of service charges without sufficient reason or justification.  

‘We’ve heard of practices facing serious financial burdens due to NHSPS charges and even worrying that they might not be able to keep their doors open, so this outcome should give hope of a fair resolution to the other NHSPS tenants struggling with rising service charges and resulting disputes. 

‘At a time of unprecedented pressure on the health service, the NHS simply cannot afford to lose any more GPs to what is clearly an avoidable situation. The BMA will continue to work with GPs, NHSPS, and other stakeholders to find a fair resolution for NHSPS tenants.’

 A spokesperson for one of the practices said: ‘It’s been such a relief to know that years of stress and frustration are now finally over.

‘If we had paid what we were being asked to by NHSPS, then our practice would not have survived, which would have impacted thousands of patients. We couldn’t have done this without the BMA’s support and the lawyers who assisted us on their behalf.’

The BMA has created guidance for practices in similar positions to help advise them on what to do if they are also facing disproportionate service charges.

A version of this story first appeared on our sister publication Pulse.