In this month's public matters the team look at: - discretionary power and policies - employment law update - the devolution story so far - break point or game, set and match for landlords? An important Supreme Court decision on break clauses - how and why can ITC contracts be terminated? - confidentiality - changing GMC guidance - our new intercept claims validation product for health sector clients.

1. Birmingham Exeter London Manchester Nottingham
www.brownejacobson.com
0

2. Birmingham Exeter London Manchester Nottingham
www.brownejacobson.com
1
Index
Page
Discretionary power and policies
Will Thomas
2 – 3
Employment update
Sarah Hooton
4 – 7
The devolution story so far
Angela Konteas
8 – 9
Break point or game, set and match for landlords? An important Supreme
Court decision on break clauses
Neil Walker
10 – 13
How and why can ITC contracts be terminated?
Melanie Chisnall and Nichola Evans
14 – 18
Confidentiality – changing GMC guidance
Ben Troke and Ros Foster
19 – 20
Our new Intercept claims validation product for health sector clients
Paul Wainwright
21 - 22
The articles in this newsletter are for general information only. They do not represent legal advice. You
should always take legal advice before pursuing any course of action discussed in this newsletter. If you
would like to discuss any of this issues raised in this newsletter please call us +44 (0)115 976 6000.

3. 2
We are often required to advise on policies. In particular, the following questions are asked: How should a
public authority exercise its decision making powers in light of a particular policy? Is a particular policy
lawful?
With these questions in mind, it is helpful to remind ourselves of the law on discretionary power and policies.
Discretionary power
All legal power, as opposed to duty, is inevitably discretionary to a greater to lesser extent. However, it is
the nature of that discretion which is important. Common law dictates that all decision making powers must
be exercised in a proper and lawful way in line with the intended purposes with which that power was given.
Decision making should also be rational, evidence based, impartial and reasonable. In particular, an authority
who is required to exercise a discretion affecting an individual must do so having taken account of the
individual’s particular circumstances. Failure to exercise a decision in accordance with these broad principles
will be an abuse of discretion and a potential ground for judicial review.
A public authority can also be said to have failed to exercise its discretion when it makes or follows general
policies which fetter its discretion.
Policies
Admittedly, the exigencies of administration often mean that public authorities should be able to take
decisions on individual cases within a framework of general policies or principles. It is desirable that decisions
should be clear, consistent and efficient. Therefore, there is a clear role for policies in the effective
discharge of public administration.
However, this must be balanced against the requirement that decisions on how a discretionary power is to be
exercised should be taken in light of individual consideration of the merits of each case. It is the balance
between these two points that the courts have considered over the years.
The main authority remains the case of British Oxygen Co Ltd v Board of Trade [1971] AC 610. This case
concerned the administration by a government department (the Board) of a complex scheme for making
discretionary investment grants to industry. The company (British Oxygen) manufactured and sold medical
gases, which had to be kept in special containers. The company bought a large number of a particular kind of
container over a number of years. The total expenditure exceeded £4 million. The containers cost on average
£20 each.

4. 3
The Board of Trade had discretion to award investment grants under the Industrial Development Act (the Act)
in respect of new plant. The Board had a policy not to approve for grant, expenditure on items which cost
individually less than £25, however great the number of items purchased. British Oxygen sought a ruling from
the court that the Board was not entitled to follow such a rigid policy and that every genuine and reasonable
application should be considered on its own merits.
The Court of Appeal considered the nature of the discretion provided in the Act. It was a wide discretion and
involved the expenditure of public money. The Board were entitled in the circumstances to have some sort of
guide so that it did not have to pay every individual who was eligible for a grant.
The Court of Appeal also drew an important contrast between two situations:
 where an authority adopts a rationally determined policy and communicates it to the individual,
together with an intimation that he will be heard and that, unless there is something exceptional in
his case, the policy will be applied; and
 where an authority decides not to hear any application of a particular character by whomsoever
made.
In this case, it was held that the former applied and that this was a lawful basis on which to apply a policy in
these circumstances. The case of British Oxygen affirmed that public authorities may have and apply a policy
in the exercise of its decision making powers. However, an authority must not shut its ears to an application
and must always be prepared to exercise its discretion in exceptional circumstances.
British Oxygen continues to be applied by the courts and the principles contained therein must be borne in
mind by all public authorities when considering how to apply policies to their decision making.
Public authorities should also ensure that when formulating policies that those policies are ‘rationally
determined’, e.g. they do not require the decision maker to take into account irrelevant considerations and
are not ‘Wednesbury’ unreasonable. Decision makers should also be aware of the concept of discretion, and
the importance of not blindly following self-created rules and policies.
Will Thomas | +44 (0)115 934 2007 | will.thomas@brownejacobson.com

5. 4
Employment law is notorious for its speed of change. As we enter into 2016, we take a look at some of the
developments and decisions that we are expecting this year so that you can keep a watch for them:
Tribunal fees
As you may recall, the Court of Appeal dismissed Unison’s most recent challenge to the tribunal fee system (R
(on the application of Unison) v Lord Chancellor (No. 3)). There was a lack of evidence as to the impact of
fees on any individual claimants. The figures on their own, whilst showing a dramatic decline in the volume
of claims, were insufficient to establish that claimants were unable to have effective access to justice. The
Court of Appeal concluded that the two-tier fees system was objectively justifiable, given the greater
demand placed on tribunal resources by discrimination claims.
Unison has sought permission to appeal to the Supreme Court and so this case will continue into 2016.
Running parallel to this are the government review of employment tribunal fees and the Justice Committee
inquiry; outcomes from both of these are awaited in 2016.
The Scottish Government has indicated that it will abolish employment tribunal fees once it is clear on how
the transfer of powers and responsibilities under the Smith Commission agreement will work.
Whilst abolishment of the fee regime in England and Wales seems highly unlikely, a reduction in the fee
levels may well be on the cards, leading again to a potential rise in the number of tribunal claims pursued.
Whistleblowing
In 2013, whistleblowing legislation was amended to require that disclosures must be (in the reasonable belief
of the worker making the disclosure) ‘in the public interest’ to be capable of protection. However, the
threshold set for what amounted to ‘the public interest’ in the case of Chesterton Global Limited (t/a
Chestertons) and another v Nurmohamed was very low. The Employment Appeals Tribunal (EAT) held that the
new wording was introduced simply to avoid a worker from relying on a breach of his own contract of
employment where the breach was personal in nature. In this case, although the disclosure related to the pay
awarded to the claimant, it also affected the pay of around 100 other senior managers and this was a
sufficient group of the public to satisfy the test.
Chestertons was applied in Underwood v Wincanton Plc (EAT). In this case, the disclosure related to the
allocation of overtime to the claimant and three other colleagues. The claim was initially struck out by the
Tribunal (before the outcome of Chestertons was known) as having no reasonable prospects of success,

6. 5
principally because it would not satisfy the public interest test. This was overturned on appeal, with the EAT
finding that the interpretation of ‘public interest’ by the Tribunal was too narrow.
Chestertons has appealed to the Court of Appeal and the outcome is expected later this year (it is scheduled
to be heard in October 2016). It remains to be seen whether the Court of Appeal will impose any higher
threshold on the public interest test. In the meantime, employers should err on the side of caution when
considering whether disclosures made by workers are sufficient to qualify as a protected disclosure.
Holiday pay
The EAT heard the appeal in Lock v British Gas Trading Limited in December 2015 and judgment is currently
awaited. The appeal concerned whether Bear Scotland Limited v Fulton and another (EAT) should have any
bearing on this case given that Bear Scotland concerned non-guaranteed overtime and Lock relates to
commission. British Gas is also arguing that Bear Scotland was incorrectly decided when it concluded that
domestic legislation could be interpreted purposively to give effect to EU Law.
Some holiday pay cases remain stayed pending the outcome of Lock but others, particularly within the public
sector where tribunals are not required to purposively interpret domestic legislation and instead can rely
directly on European Union (EU) law, are proceeding.
The introduction of the Deduction from Wages (Limitation) Regulations 2014 last year, imposing a two year
backstop on the majority of unlawful deductions from wages claims (including holiday claims) from 1 July
2015 did not create the influx of holiday claims that some predicted. Many employers are still sitting tight
awaiting hopeful clarification on this uncertain area of law from the EAT in Lock. Others are taking steps now
to address holiday pay going forwards to assist with morale/employee engagement and to break any series of
deductions.
Redundancy
In 2013, a controversial decision of the EAT which deleted the words ‘at one establishment’, dramatically
extended the scope of the collective consultation regime (Usdaw and another v WW Realisation 1 Limited (in
liquidation) and others). The decision effectively required collective consultation whenever an employer
proposed 20 or more redundancies across the whole organisation within a period of 90 days, even if the
numbers of proposed redundancies at any given site were considerably lower.
The European Court of Justice (ECJ) held that this was incorrect and reinstated the previous threshold of 20
or more proposed redundancies at an ‘establishment’. The case will now return to the Court of Appeal; it is
expected to conclude that each store was an establishment in its own right.

7. 6
Subject to the Court of Appeal’s decision, in the vast majority of cases, ‘establishment’ is likely to be a
single store or site. However, there may still be some occasions (as there were before the 2013 EAT decision)
where separate geographical sites could be aggregated to form a single establishment – for example, building
operations carried out at multiple sites but with a common headquarters and administrative base may
constitute one single establishment.
Employers should carefully consider what their proposals are, and the potential implications of those
proposals, to determine whether the collective consultation obligations are triggered.
TUPE and assignment
In BT Managed Services Ltd v Edwards, an employee who had been off work for over five years, with no
indication of him ever returning, was not deemed to be assigned to an organised grouping of employees and
so he did not transfer under Transfer of Undertakings (TUPE). The EAT distinguished permanent inability with
long term sickness or maternity leave, where the absence might be regarded as temporary.
Edwards has been appealed to the Court of Appeal and is due to be heard in June 2016.
Employers acquiring employees under TUPE should carefully conduct their due diligence to consider which
employees are actually assigned to the organised grouping of employees immediately before the transfer.
This, of course, is subject to information being available from the transferors but, in the absence of such
information, robust protection should be sought under any contract.
Equal pay
Gender pay reporting requirements for employers with 250 or more employees are expected in 2016. The
deadline for their introduction is 26 March 2015 but commencement regulations are still required. The
government has indicated its intention to include bonus information within the reporting requirements and to
extend the obligation to publish gender pay data to public sector employers.
In the meantime, equal pay claims against Asda and Sainsbury’s are expected in 2016. Whatever the outcome
in these particular cases, the publicity generated to date has already been significant and is likely to
continue, raising greater awareness of employee rights and a greater appetite from trade unions and
claimant firms to pursue equal pay claims within the private sector. Whether this will release any pressure
within the public sector in respect of equal pay threats, or simply extend it across all sectors, remains to be
seen.
Employers would be advised to consider their pay structures and any apparent pay inequalities, particularly if
they are likely to be caught by the gender pay reporting requirements, when introduced.

8. 7
Other developments
11 January 2016 – zero hours workers have protection against unfair dismissal and detriment for failing to
comply with an exclusivity clause.
25 January 2016 – consultation closes in respect of draft regulations to allow for the recovery of exit
payments when a public sector high earner returns to the public sector shortly after exit.
1 April 2016 – National Living Wage to be introduced – proposed to be £7.20 per hour for those 25 and over.
The draft Public Sector Exit Payment Regulations 2016 impose a cap of £95,000 on the pre-tax value of exit
payments made to most public sector workers.
The Trade Union Bill 2015/16, which proposes various wide-reaching reforms of various aspects of industrial
relations law, continues to be progressed.
Sarah Hooton | +44 (0)115 976 6033 | Sarah.Hooton@brownejacobson.com

9. 8
As far back as 2002 Robin Cook claimed that Britain was the most centralised state in Europe and that the
government should push ahead with devolution to the English Regions. However, up until now very little if
any real progress has been made, but things are changing.
The Cities and Local Government Devolution Bill (the Bill) was introduced in May 2015 in the House of Lords
to support the Conservative Party’s election manifesto to “devolve powers and budgets to boost local growth
in England”. It was the subject of a Communities and Local Government Select Committee Inquiry between
October and December 2015 which heard evidence from the Department of Health, the Department for Work
and Pensions, and Greg Clark MP and James Wharton MP, both of the Department for Communities and Local
Government, plus representatives from local government and the Local Government Association, among
others.
The Bill completed its passage through the Houses of Parliament on 7 December 2015 and is likely to receive
Royal Asset in January 2016.
General implications of the Bill
The Bill provides a statutory framework rather than detail about how the process of devolution will work.
However it does introduce additional powers for the Secretary of State, such as the power to provide for an
elected mayor for a combined authority even if one or more of the constituent councils does not consent.
The Bill also seeks to remove existing restrictions on which authorities can come together to form a combined
authority, such as removing the requirement for constituent authorities to have contiguous boundaries.
A late amendment to the Bill by the Government took this further, proposing to allow for the reorganisation
of local government boundaries as long as at least one of the constituent councils consents to the change. By
way of example, this would allow a district council to join another combined authority rather than stay in its
existing structure. There was much debate on the amendment as MPs were concerned about boundary
changes being forced on local authorities. The Government responded by saying it would not force changes
and that the intention was to encourage dialogue and negotiation between local authorities.
The proposal, if agreed, will be particularly relevant for combined authorities such as the Derbyshire/
Nottinghamshire collaboration, D2N2. It was reported that some districts in the area such as Bassetlaw and
South Derbyshire were already considering joining neighbouring combined authorities. Concerns were raised
that this could impact the devolution deal between Nottinghamshire and Derbyshire which is already in
progress. Nevertheless, the draft deal for D2N2, to be renamed the North Midlands Combined Authority, was
published on 5 January 2016.

10. 9
Summary of the North Midlands Devolution Agreement
The 19 councils of Nottinghamshire and Derbyshire will come together to establish a Mayoral combined
authority, with mayoral elections to be held in 2017. The Mayor’s powers will include control over a new
housing investment fund, franchising of bus services and the responsibilities of the existing Police and Crime
Commissioner. The combined authority will be able to reject the Mayor’s proposed strategies and amend
spending plans if two-thirds of the members agree to do so.
The devolution deal will include initiatives such as local commissioning of the 19+ Adult Skills budget, with
fully devolved budgets proposed by 2018/19; the ability for the combined authority to decide future further
education provision; and joint working with DWP to co-design future employment support, such as flexibility
to set specific local outcomes. The deal also makes specific reference to a fiscally neutral reform of public
services in areas such as health and social care integration, collaboration of emergency services.
What next for devolution?
Devolution is only part of a bigger picture and the Government’s view, as given to the CLG Select Committee,
is that it complements what is already happening, particularly with integration of NHS and local authority
services.
It seems likely that the Bill will come into force in early 2016, assuming there are no significant disruptions
by the Lords, and this is likely to trigger a further wave of devolution deals. Existing deals, struck by the likes
of Greater Manchester, Cornwall and Birmingham, will begin to be implemented this year, the devil being in
the detail. And if the Bill passes onto the statute book in its current form, it could bring about the potential
for reorganisation of local government on a scale not seen for decades.
Browne Jacobson is holding a second round table of leading figures in February and we will report some of
the results of that in future issues.
Angela Konteas | +44 (0)115 976 6097 | angela.konteas@brownejacobson.com

11. 10
An important Supreme Court decision on break clauses
The long awaited decision of the Supreme Court, in the saga involving Marks and Spencer (M&S) and their
landlords PNP Paribas, clearly establishes that a tenant will not be entitled to any reimbursement of rent
paid in advance if it exercises a break right in a lease, unless there is express provision in the lease to that
effect.
For some time well advised tenants have strongly resisted or negotiated pre-conditions in tenant break
clauses which in the past would have been relatively commonplace.
It would be unusual-and inadvisable for a landlord-to draft or agree any pre-conditions to the exercise of a
landlord break clause, although there is the potential for mishap here when drafting ‘either way’ break
clauses.
The Avocet case in 2011 (Avocet Industrial Estates LLP v Merol Ltd and another [2011] EWHC 3422 (Ch))
showed how vulnerable a tenant was to a condition requiring the payment of all monies due under a lease-in
that case the High Court held that a tenant did owe default interest on late payments under a lease, even
though the landlord had not issued any demand for that default interest. As the tenant had not made all
payments due under the lease, as required by the break clause, the tenant's right to break the lease had not
been validly exercised. Although the tenant started proceedings to appeal the decision, it’s widely
understood that the matter was settled out of court.
It has become more common for tenants to seek - and landlords to accept - that this type of precondition
should be restricted to payment of the basic rent (and so not insurance rent, service charge, interest or other
sums) and then only where the monies have been demanded in writing a number of days before the break
date.
Other preconditions that can cause problems for tenants are: those requiring compliance with other lease
covenants (especially repair and decoration covenants); and yielding up the premises with vacant possession
(which means more than simply giving up occupation); and of course there is a plethora of case law in
relation to the validity of the break notice itself (in terms of the required form, the required date and mode
of service, and the substantive contents of the notice).
The Marks and Spencer case considers a different issue though - where the tenant pays rent in advance –
whether quarterly, monthly or otherwise, and the break date falls between rent payment dates, surely the
tenant is entitled to reimbursement of the portion of rent it has paid for the period after the break date?

12. 11
Otherwise a landlord can profit from a break by receiving rent from the outgoing tenant, and if it has
managed to re-let the premises swiftly, also from the incoming new tenant.
Not so, ruled the Supreme Court… unless the lease expressly provides for this (and many now do as many
tenants’ solicitors had already been aware of the potential mischief here), tenants have no implied right to
reimbursement of any money.
Marks and Spencer Plc v BNP Paribas Securities Services Trust Company (Jersey) Ltd and
another [2015] UKSC 72
Facts
Marks and Spencer (M&S) had four leases on four separate floors of an office building, each with identical
break rights on 24 January 2012. Operation of the break clauses was conditional on there being no arrears of
basic rent (or VAT on that rent) on the break date and on M&S paying a penalty equivalent to a year’s rent
(plus VAT).
M&S exercised the break rights successfully, but then claimed from the landlord a refund of the rent,
insurance and car park licence fees already paid in advance for the period from the break date to the next
quarter day (or, in the case of insurance, to the next renewal date). There was no express provision in the
leases requiring the reimbursement of this money.
Issue
Should a term be implied into the leases entitling M&S to a refund of advance payments covering the period
after the break date?
In the High Court, Mr Justice Morgan ruled that a term to this effect would be implied in order to give
‘business efficacy’ to the lease, although the decision was overturned on appeal.
Decision
The Supreme Court held that no such term should be implied. The leases were negotiated against the
background of a clear, general and correct understanding that rent payable in advance cannot be
apportioned (under common law or by statute) on a time basis. It would therefore be wrong (except in a very
clear case) to attribute to a landlord and a tenant (particularly where they have entered into a full and
professionally drafted lease) an intention that the tenant should receive back an apportioned part of rent
(and other sums) payable (and paid) in advance.
As a result of this decision, M&S are over £1m out of pocket (not to mention the costs of going to (and losing
in) the Supreme Court).

13. 12
Key points
 Case law has established that where a conditional break clause requires a tenant to pay all rent due
up to the break date, the tenant must pay the full quarter’s rent on the quarter day before the break
date (it is not enough to pay an apportioned sum from the quarter day to the break date). The
Supreme Court has confirmed that, as a general rule, once the break right has been successfully
exercised; the tenant will not be entitled to a refund of the excess rent from its landlord if the lease
is silent on this point. The law is the same as where a lease is forfeited between rent payment dates
(it long being accepted that the landlord makes a windfall in those circumstances).
 When acting for a tenant, it is imperative to state expressly that, following the exercise of a break
right, the landlord will reimburse the tenant for any excess sums paid in advance covering any period
after the break date. Of course, this is less of an issue if the break date is just before a rent payment
date, although even then the clause should cover the reimbursement of insurance premiums paid in
advance.
 One of M&S’s arguments was that as the leases provided that the rent should be paid yearly “and
proportionately for any part of a year” then, if the break penalties had already been paid before the
last quarter day (which was not the case here), the tenant could have paid on that last quarter day
an apportioned part of the rent payable up to the break date (on the basis that the break rights
would then be unconditional, so you could be certain that the leases would end on the break date - it
was no different to the situation where the contractual term comes to an end between rent payment
days). It was therefore illogical that the tenant’s position should be different depending on when the
break penalties were paid. Although this argument was rejected by Lord Neuberger (it was, after all,
M&S’s decision when to pay the penalties), he did not disagree with M&S’s legal analysis. It is
therefore at least arguable that, where a break right is otherwise unconditional, a tenant can pay an
apportioned sum on the last quarter day (and, if it pays the full amount, will be entitled to a refund
from the landlord).
 This case is also significant for the interpretation of commercial agreements generally. The Supreme
Court has clarified that a term should only be implied if it satisfied the test of business efficacy or
was so obvious that it went without saying. A term should not be implied merely because it appeared
fair or because the parties would have agreed to it had it been suggested to them.
Lessons learned
The case is yet another salient reminder of the need for tenants and landlords to carefully consider the terms
of the lease at the outset in relation to break clauses -and also to take legal advice on the terms of the lease
when serving, or considering whether to accept service of or dispute the validity of a break notice. For

14. 13
tenants, in practice this may require consideration (and legal advice) 12-18 months before the desired break
date.
The following areas warrant particular attention by tenants when serving break notices (and landlords when
receiving them):
 Will the notice be served-or has it been served-in the form, containing accurate details and when
(and by the means of service) required by the lease? Is the form of the break notice prescribed by the
lease? Does it have to be served on or before a specified date? Is personal service or special delivery
post required?
 Can the tenant comply with-or has it complied-with all necessary break conditions? Pay particular
attention to those requiring payment of rent and other monies, compliance with lease covenants and
vacant possession. Are the premises in the state and condition required by the lease? Will any
alterations need to be reinstated? Are there any subleases or other occupational rights to be
terminated? Will all staff, furniture and other items be removed from the premises before the break
date?
 Has the tenant paid all rents and other monies required to be paid as at service of the break notice
and at the break date? Is payment of service charge, insurance rent and interest (even if none has
been demanded) required in addition to basic rent?
 Does the lease expressly provide for the reimbursement of any sums paid in respect of the period
after the break date?
For tenants, the sooner that professional advice is taken on what is required to break the lease, the better.
Neil Walker | +44 (0)115 908 4127 | Neil.Walker@brownejacobson.com

15. 14
Towards the end of last year my team worked with the legal team at Cornwall County Council (the Council) in
resisting a claim brought by BT Cornwall (BTC) in the Commercial Court1
. The claim concerned the provision
of information and communications technology (ICT) services to the Council and whether the Council could
lawfully terminate the contract. The trial was heard by Mr Justice Knowles with the Council successful in the
claim. Please view the full judgment here.
Background
Following a procurement exercise the Council together with Cornwall Partnership NHS Foundation Trust and
Peninsula Community Health CIC entered into a contract with BTC in March 2013.
The contract was of long duration and of high value (estimated at £160M). It had extensive reach and covered
many different services including health, transport, communications and public safety.
The Council was unhappy about the delivery of services under the Service Delivery Agreement (the
Agreement) and on 24 June 2015 wrote to BTC indicating that by reason of various breaches of the contract
the Council was entitled to terminate the contract forthwith.
When the parties could not reach agreement on the issues, BTC issued proceedings in the Commercial Court
and applied for an injunction to prevent the Council from terminating the Agreement.
The matter came before Mr Justice Teare in August 2015. He gave directions for there to be an expedited
trial and that the following issue ought to be determined:
"… whether, assessed as at 20th July 2015, [BTC] was in breach of [the Agreement] such that the Defendants
were entitled in all the circumstances to terminate the Agreement forthwith, and whether [BTC] should be
granted an injunction to restrain such termination."
The Council defended the case strongly and robustly.
The trial commenced with a reading day on 30 November 2015 and the hearing commencing on 1 December
2015. Judgment was handed down on 21 December 2015.
The arguments
The main issue that was explored at trial related to the Key Performance Indicators (KPIs) which were dealt
with in Schedule 13 to the Agreement was entitled ‘Price Performance Mechanism’. In particular there was a
1
BT Cornwall Limited v Cornwall Council and Others [2015] All ER (D) 228 (Dec), [2015] EWHC 3755 (Comm)

16. 15
focus on KPI 1. BTC's monthly review reports show that between November 2014 and April 2015 service in
relation to KPI 1 was below target service level six times, and below the breach trigger five times.
This level of failure would amount to a material breach under Clause 48.2.1.1 of the Agreement, allowing
termination without a remedy period.
It was accepted by the parties that there was a large backlog of incidents in early 2015. It was the Council’s
position that these were incidents which clearly needed to be taken into account and should form part of the
calculation of whether or not BTC was in breach of the target service levels.
BTC argued that the figures for February, March and April 2015 in the monthly service reports “could not be
used because KPI 1 was intended to be a measure of failure within a month by reference to a benchmark of
what was achievable within that month. For these three months the figures were the subject of an express
caveat to the effect that their level was due to a large backlog of failed incidents being cleared, so that (it
was argued) they could not be said to represent the level of failure within a month.”.
Mr Justice Knowles did not accept BTC’s arguments in this regard. He noted that the Agreement recorded
that a matter would be logged for breach purposes.
BTC also attempted to argue that the KPIs were not operative and needed to be agreed. Again Mr Justice
Knowles held in the Council’s favour and found that even if the KPIs were not ‘fit for purpose’ they were still
operative until changed using the appropriate change mechanism. He said:
“In my view, confirmed by my hearing what the witnesses had to say at trial, the items show (a) that
baselining work remained to be done for some of the KPI performance measures that were in the Agreement
(b) that after that work had been done there would a joint review of the contract KPI/PI performance
measures and (c) that amendments to the Agreement would be proposed in light of the joint review.
“In the events that happened the parties did not get to stages (b) or (c) before the Council wrote to BTC on
24 June 2015 asserting that the Defendants had a right to terminate the Agreement forthwith.”
BTC put forward a further argument in relation to this. BTC had served evidence of a re-assessment exercise
they had carried out. A witness, Mr Mark Pate gave evidence of the exercise carried out by a team of
employees whereby incidents notified to the service desk were re-assessed and where it was felt appropriate
re-classified.

17. 16
In terms of the exercise itself the judge said:
“if BTC was the one to instigate a correction it would first need to show (and in my judgment it did not do
so) why the existing figures and calculations, which were its own work, were not objective, fair and
reasonable or how it was that the assessment had not been conducted, and the report written, in good
faith.”
The judge went on to look at the exercise which had been carried out by Mr Pate and concluded:
“Mr Pate gave evidence for BTC of work he had done on the figures in recent weeks. I was left unclear about
Mr Pate's methodology and unconvinced by his approach to "sampling". As between his work and the figures
derived contemporaneously from the Monthly Service Reports I preferred the latter.”
BTC had further arguments which it advanced in relation to the KPIs. It suggested that there was a waiver.
Under the Agreement the Council had the right "at their sole discretion" to waive key performance indicator
scores achieved due to service failures "if they are satisfied (acting reasonably) that a remedial plan to
prevent the Service Failure being repeated is in place and being adhered to”.
Again the judge was not convinced by the arguments advanced saying:
“…but the paragraph does require the exercise of the right it confers (or a successful contention that there
was an obligation to exercise the right and that that obligation was not complied with). I heard no evidence
at the trial that would cause me to conclude that the right had been exercised or should have been
exercised.
“Mr Finlayson [the CEO of BTC] gave evidence that a waiver from Material Breach "was implied and everyone
understood". I do not accept that as an accurate statement of or conclusion on the facts. Nor is it enough in
law.”
Next BTC sought to convince the court that there was a KPI backlog agreement. They suggested that the
parties knew that if BTC cleared the backlog it would place BTC in a breach position. The argument was put
forward that it was understood that the breaches would not be taken into account by the Council in
determining if BTC was in material breach. The agreement, it was alleged, was not in writing.
The judge was not convinced saying:
“Nothing was written to record the suggested "KPI Backlog Agreement". In my view that is because there was
no agreement and not because, as BTC argues, there was a general atmosphere of co-operation, and the
parties were working fast to resolve problems…. Having heard them give evidence, I do not accept Mr

18. 17
Kritikos' or Mr Finlayson's evidence where it suggests that agreement was reached in the form of the
asserted KPI Backlog Agreement”
The court then went on to consider whether the Council should have terminated the contract earlier and
whether there had been affirmation of the contract. The court noted the procedures which were adhered to
by the Council in reaching their decision and Mr Justice Knowles said:
“There was no material delay on the Council's part, and certainly neither its actions nor the passage of time
are to be taken as an election not to terminate for Material Breach. The word "forthwith" in Clause 48.1
addresses the point at which the Council may act, and not the period within which it must act if it is going
to.
“BTC argues that "the Executive Forum represented a major commitment for BTC, not only in terms of the
executive input at the highest level, but also in terms of the huge resources and costs involved", which it
put at £4.3 million. This is no more than a reflection of how serious it had allowed things to become; it does
not advance its argument that the Council was not entitled to enforce the Agreement in accordance with its
terms.”
Finally BTC suggested that the Council had not acted in good faith. Again the judge had little sympathy with
BTC’s position finding:
“BTC faced problems of its own making and did not provide to the Defendants the service it had promised to
the standard it had promised. The Council worked with BTC to try to resolve things but ultimately decided
the position was not good enough. There is no absence of good faith or presence of capriciousness in
expecting BTC to clear the backlog at once and also to take the contractual consequences if that meant KPIs
would be breached again. There was (as discussed above) no KPI Backlog Agreement, waiver, estoppel or
affirmation. And unless and until different KPIs were agreed there is no absence of good faith or presence of
capriciousness in expecting BTC to honour the existing agreed KPIs, "fit for purpose" or not.”
In conclusion Mr Justice Knowles refused to grant an injunction to BTC and found that “Assessed as at 20th
July 2015, BTC was in breach of the Agreement such that the Defendants were entitled in all the
circumstances to terminate the Agreement forthwith.” The Council’s evidence and witnesses were
preferred.
Conclusion
Mr Justice Knowles clearly felt that the contractual terms were sufficiently certain and there had been no
agreement by the parties to depart from the Agreement whether by finding that the parties had reached a
backlog agreement, that there had been a waiver or that there was a valid estoppel argument. Whilst he did

19. 18
not make a finding as to whether BTC could retrospectively conduct a re-assessment exercise he did take the
view that BTC ought to have set out why the figures in the monthly reports could not be relied upon.
The Judgment sets out very succinctly that if a party to an agreement seeks to argue that the agreement has
been departed from then there needs to be real, tangible evidence of that. In the absence of any such
evidence the court will apply the strict contractual terms.
Melanie Chisnall | +44 (0)161 300 8024 | melanie.chisnall@brownejacobson.com
Nichola Evans | +44 (0)161 300 8021 | nichola.evans@brownejacobson.com

20. 19
General Medical Council (GMC) guidance on confidentiality was published in 2009, and they are now
consulting on a revised version.
The key proposed changes include:
 A new structure to distinguish between the context of ‘direct care’, ‘indirect care’ and ‘non-care’
uses and disclosure of confidential information.
 The existing duty to tell an appropriate authority when a patient who lacks capacity may be
experiencing, or at risk of, abuse or neglect, is extended to all forms of serious harm (previously this
referred to ‘neglect or physical, sexual or emotional abuse’).
 The new guidance suggests that there may be a public interest justification in exceptional cases for
disclosure of confidential information about a patient who has capacity without their consent, even
when nobody is at risk of serious harm.
 There is new guidance on using anonymised and de-identified information for indirect care e.g.
commissioning or audits.
 Expanded guidance on the factors to consider before disclosure ‘in the public interest’.
 More emphasis on doctors’ duties to understand information governance and their obligations,
including management of records.
There is also updated separate explanatory guidance covering seven particular situations which are often
problematic:
 Patients’ fitness to drive and reporting concerns to the Driver and Vehicle Licensing Agency (DVLA) or
Driver and Vehicle Agency (DVA) (this has not changed much, but makes clear that doctors should
consider whether a patient’s condition or treatment can affect their ability to drive safely, and
contains a more overt expression of doctors’ duties to protect the public).
 Disclosing information for employment, insurance and similar purposes.
 Disclosing records for financial and administrative purposes.

21. 20
 Disclosing information about serious communicable diseases (expanded to emphasise that disclosure
to another health professional at risk of infection is unlikely to be justified where that risk would
ordinarily be managed by standard precautions).
 Reporting gunshot and knife wounds (re-ordered but essentially unchanged, other than clarification
that disclosure to the police for shotgun and firearms licensing can be justified in the public interest
if failure to disclose may expose others to a risk of death or serious harm).
 Disclosing information for education, training and for learning from adverse incidents and near misses
(expanded to cover learning from adverse incidents and near misses, and to provide that information
about patients who lack capacity to consent to disclosure can be shared if justified by the public
interest, e.g. of trainees gaining experience of such patients, if it is not contrary to the best interests
of the individual patient, arguably departing from the conventional approach under the Mental
Capacity Act).
 Responding to criticism in the press (little changed, other than to link explicitly to guidance on social
media).
There is a link to the consultation documents here and it is open until 10 February 2016.
We would be pleased to hear from you if you would like to discuss this.
Ben Troke | +44 (0)115 976 6263 | Ben.Troke@brownejacobson.com
Ros Foster | +44 (0)20 7337 1015 | Ros.Foster@brownejacobson.com

22. 21
Claims management and investigations are becoming increasingly challenging. The time frames of the Claims
Portal and protocols for responses to all manner of claims are tight. This has the consequence, shared by all
our clients, of imposing a burden on organisations and claims teams to carry out immediate investigations,
often with scant detail from claimants, in order to answer often complex questions of breach of duty.
In response to this Browne Jacobson LLP has developed a range of products known as ‘Intercept’ which aims
to help clients investigate, respond and where appropriate challenge claims which are sometimes
questionable or brought dishonestly.
Originally developed out of the suite of tools used by Browne Jacobson’s intelligence team which supports
the Counter Fraud Group, Intercept is geared to delivering an intelligence based assessment of the litigation
risks, and where appropriate guidance on the validity of claims (or specific financial loss claims) and strategy
advice.
“We are delighted to be able to offer this validation tool to our health sector clients at this challenging
time” said Paul Wainwright, Partner and Head of Counter fraud. “We have recognised the increasing pressure
on time and where there are increased budget restrictions. We are keen to support our clients in reaching
early effective decisions during the litigation process.”
Its ease of use and format mean that investigations and reports are concluded within a five day period leaving
clients with the time to review and make informed decisions.
“We have found that clients who use of these products (which accesses Open Source Intelligence) to validate
claims, also request additional support during litigation. Validating suspicious heads of loss, or
unsubstantiated claims can save many thousands of pounds in damages and legal costs, and sometime avoid
litigation altogether” Paul added.
The product is used by the NHSLA as well as many local authority and commercial clients. As a fixed fee
product it offers predictability and allows clients to rule out the impossible and concentrate on the real
issues in this case.

23. 22
"The Intercept Reports have proved to be an ideal, incisive tool for exploring concerns raised during the
course of claims investigations. Clear reports with comprehensive searches have allowed us to check the
validity of the information of the potentially fraudulent claims queried, and the excellent advice provided
as to avenues to pursue further has assisted us deal with this types of cases."
Ben Maidment, Surrey County Council.
Paul Wainwright | +44 (0)121 237 4577 | paul.wainwright@brownejacobson.com