Dental Tribune United Kingdom Edition

Actions for breach of contract must be brought within six years ‘The general rule is that damages for breach of contract are such losses as may have been reasonably foreseeable when the breach took place’ Are there any other causes of action? There may be two possibilities. 1Firstly there may be an action for “breach of statu- tory duty”. The framework for- calculating the level of activity and contract value is a statutory framework. If the PCT failed to carry out such calculations properly they have failed in their statutory duty, enabling a claim to be brought. 2Secondly there may be a claim for breach of warranty under clause 23 of the GDS Contract. By those warran- ties the PCT promised that “all information in writing which is provided to the contractor specifically to assist the con- tractor to become a party to this Contract was, when given, true and accurate in all material re- spects”. Under clause 23 are further warranties, for example, that no relevant information has been omitted. Under the provisions of the 2005 Transitional Provi- sions Order (which sets out the framework for the transi- tion from the “old” section 35 arrangements to the “new” arrangements), the responsibil- ity for analysing the baseline year data, was specifically given to PCTs. “It might be arguable that if incorrect calculations had been made to the contractor’s baseline UDAs and contract val- ue, the relevant PCT had been in breach of warranty.” This could lead to a claim for damages for breach of contract. Actions for breach of contract must usually be brought within six years from the date of the breach in ques- tion, so care needs to be taken with limitation periods. A contractor contemplating action should also ensure that they had not elected, in their Contract to be regarded as a health service body (clause 14) restricting action only to the NHSLA (with the three year limitation period problem). It might be sensible to seek an ear- ly “opt out” of clause 14, which is possible under Regulation 9 of the National Health Service (General Dental Services Con- tract) Regulations (Regulation 9(4)). A contractor may, “at any time” request a variation of the Contract to remove the election from health service body status. Any such opt out should be in place before any proceedings were commenced. What might a claim be worth Firstly how much might a claim be worth? The general rule is that damages for breach of contract are such losses as may have been reasonably foreseeable when the breach took place. The claimant is responsible to take all reason- able steps to keep their losses to a minimum. An aggrieved contractor might argue that had their GDS Contract been at the appro- priate higher level of activity and the higher contract rate, the contractor would have had to pay, say, 50 per cent of each “UDA value” to that relevant employee. The remaining 50 per cent balance would have been part of their gross annual profits. They might go on to argue that such increased profits would have been the “top slice”, that the practice overheads would already have been provided for by the “lower slice”, and that their net loss was there- fore 50 per cent of the value of each UDA lost as a result of the PCT’s breach of contract/breach of statutory duty, on an annual and charging basis. Such loss might amount to a substantial sum. DT April 25-May 1, 2011United Kingdom Edition page 10DTß About the author Young & Lee’s litigation team, headed by Chris Leek, acted for the claimants before the High Court, and before that in the NHSLA but were not the solicitors, who originally acted for the claimants. Tim Lee Young & Lee Solicitors 6 The Wharf Bridge Street Birmingham B1 2JS Tel: 0121 633 3233