Defendant secretary of state appointing Trust Special Administrator to NHS Trust – TSA making recommendations concerning hospital in neighbouring Trust area

R (on the application of London Borough of Lewisham and another) v Secretary of State for Health and another: Queen’s Bench Division, Administrative Court (London): 31 July 2013

Pursuant to the Ch 5A regime of the National Health Act 2006 (the 2006 act), the defendant secretary of state was entitled to appoint a Trust Special Administrator (TSA) to a failing NHS organisation to prepare a report for the secretary of state stating recommended action.

The TSA was obliged to consult on his report before a final version was prepared. The secretary of state then had to take a decision on what action to take in respect of the relevant organisation. The secretary of state appointed a TSA to the South London Healthcare Trust (the SLHT). The TSA produced his draft report for consultation. The final report was presented to the secretary of state who, in turn, commissioned the NHS medical director (K) to review the TSA’s recommendations. The secretary of state subsequently accepted the TSA’s recommendations with the modifications suggested by K (the decision).

Many of the recommendations concerned hospitals within the SLHT, which was to be dissolved, with those hospitals being moved to the control of adjoining trusts. However, the TSA’s recommendations and the decision also concerned University Hospital Lewisham (the hospital) which did not fall under the control of SLHT. The healthcare trust with responsibility for the hospital (LHT) was not failing and no TSA had been appointed over it. Part of the recommendations and the decision sought to reduce the services offered by the hospital, namely, emergency care for critically ill patients and its obstetrician-led maternity unit. The claimants (a local authority and a campaign group) sought judicial review of the decision and the TSA’s final report insofar as they concerned the hospital.

Both claimants contended, inter alia, that the decision was ultra vires because the powers of the TSA and the secretary of state pursuant to Ch 5A of the 2006 act were confined to the particular NHS trust in relation to which the TSA had been appointed. The authority submitted that, for the same reasons, the TSA’s final report was ultra vires Ch 5A of the act. The claimants submitted that there was nothing in the words of sections 65F(1), 65I(1) and 65K(1) of the act which showed that a TSA was entitled to recommend or that the secretary of state in response to a report from the TSA was empowered by statute to make recommendations or decisions which affected hospitals which at all material times were not part of the NHS trust over which the TSA had been appointed. That construction required a narrow interpretation of the words ‘in relation to the Trust’ contained within the specified sections of the 2006 act. The application would be allowed.

Individually and cumulatively, the words ‘in relation to’ did not extend the meaning of the words ‘in relation to the Trust’ so as to include not only the Trust over which a TSA had been appointed, but other Trusts. The words ‘the Trust’ in the critical provisions of the act could only mean one single Trust. The words ‘in relation to’ did not extend that meaning to include other Trusts (see [76], [77] of the judgment).

First, a construction of ‘in relation to’ so as to include other Trusts would give those words an unreasonably and an incorrectly wide meaning. It was a clear rule of statutory construction that the words in a statutory provision had to be presumed to have some meaning and the meaning of the words ‘in relation to the Trust’ had to be regarded as limiting words so as only to relate to the Trust over which a TSA had been appointed.

Secondly, the relevant words could not have a wider meaning than ‘concerning’ or ‘relating to’. They clearly meant ‘concerning’ when used elsewhere in the 2006 act and so the ordinary rules of construction would lead to them having the same meaning in the provisions in Ch 5. Thirdly, there was a clear difference in the wording of the act which showed that the TSA had no obligation or power to consider the wider interests outside the Trust with which he was concerned, but significantly, no obligation to consider the interests of the health service.

Fourthly, there were clear statutory obligations on the TSA to consult only some entities which were connected to the Trust over whose affairs he was appointed. Fifthly, the obligations imposed on the TSA to consult after publishing his draft report during the consultation period were defined; there was no suggestion that such an obligation extended to the staff of any other hospital which might be outside the area of the Trust to which the TSA had been appointed but who might, on a wide interpretation of the statute, be affected by the TSA’s proposals. Sixthly, the statutory guidance issued by the secretary of state supported the narrow interpretation. Seventh, the power that the secretary of state had to transfer or arrange for the transfer of the property and liabilities of a dissolved NHS Trust did not include any consequential power to make an order relating to hospitals in other NHS Trusts which might have been affected by recommendations of the TSA and the secretary of state’s decision (see [78]-[80], [82], [83], [85], [87], [88] of the judgment).

The narrow interpretation advocated by the claimants was correct. In the instant case, that Trust had to be SLHT as there was no other Trust over which a TSA had been appointed or any other Trust referred to in the provisions. The hospital had not been in SLHT, but in a totally separate Trust over which the TSA had not been appointed. Therefore, the extent of its services and any reduction of them had been matters ‘in relation to’ LHT, but they had not been matters ‘in relation to’ SLHT. If the recommendations from the TSA were ultra vires, then the decision of the secretary of state had also to be ultra vires insofar as he sought to rely on the Ch 5A regime because the same statutory words ‘in relation to the Trust’ related to the powers of the TSA to recommend and then of the secretary of state to make a decision. Consequently, neither the recommendations in the final report nor the decision had fallen within the respective powers of the TSA and secretary of state (see [46], [76], [78], [94] of the judgment).

The decision of the secretary of state would be quashed insofar as it related to the hospital as would the recommendations of the TSA as they related to the hospital (see [211] of the judgment).

Elisabeth Laing QC (instructed by Lewisham Council) for the authority; David Lock QC and Jeremy Hyam (instructed by Leigh Day) for the campaign group; Rory Phillips QC and Ivan Hare (instructed by the Treasury Solicitor) for the defendants.