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We pursued our PCT for debt and won

Dr Jeremy Phipps says the way his practice managed to get its money back may encourage GPs to chase debtors.

We initiated legal action against our PCT and won just under £5,000. This is on top of more than £18,000 we were previously awarded, although it did take about six years.

Warning your PCT that you are considering court action against it is a grave step, but in our case we felt justified.

We used the Late Payments of Commercial Debts (Interest) Act 1998 (LPCDA) to increase the initial award.

If you were a GP before the 2004 GMS contract, you may remember extra funding was on offer to support access for appointments. In 2003/4, our PCT issued an access target with reward funding to be paid on achievement.

NHS arbitration panel
We employed extra staff and were successful, only to then learn that the PCT felt it could no longer afford to pay. With excellent Lincolnshire LMC support, we challenged this at an NHS arbitration panel and were awarded the £18,017 owed.

However, we only received this three years after the initial claim, so we then pursued a claim of more than £5,000 for the interest lost in the intervening period.

The LPCDA applies UK-wide and allows businesses to claim interest on a commercial debt.

It was introduced to support small businesses taking action against public bodies and large businesses slow to pay accounts. Its scope was extended in 2002 to include action against any business.

Interest on an unpaid bill is chargeable at a stiff 8 per cent above the Bank of England base rate and usually starts to run 30 days after the goods or service was provided.

The LPCDA can be enforced through a county court judgment. Usually even the suggestion of such an action will encourage debtors to pay as the record of a judgment against them can significantly penalise their credit rating.

In our case, we instructed lawyers, hoping that solicitors' letters would convince our PCT that we could use the LPCDA to claim interest.

Useful advice
Unfortunately we experienced considerable intransigence. So we instructed a barrister who gave us further support and encouragement when the PCT claimed the LPCDA did not apply to it.

Perhaps our barrister's best advice was although we could consider a case in the county court, it would be easier to pursue the matter with the NHS arbitration service. Although costs in a county court are low, the NHS route is free.

Having applied for a formal dispute procedure with the PCT, its representative made us an offer of half the interest claimed. With further negotiation, we increased this to include all our legal costs.

Action against a PCT for an unpaid debt is unusual. However, practices may feel encouraged by our success to use the LPCDA to ensure other debtors pay promptly. Certainly it may be useful if, for example, medical reports fees go unpaid.

Lessons learnt
What lessons did we learn? Advice from our LMC is invaluable and free. It has access to other avenues to compare similar cases and claims as well as a defined role in dispute procedures.

A solicitor's advice may help but involving barristers is not normally required. Getting legal expenses is unusual in relatively minor disputes.

Using Freedom of Information Act (FOIA) requests can be helpful to gather further evidence if a NHS or other public body is reluctant to part with information. The FOIA does not extend to accessing legal advice the body receives.

With hindsight, we should have applied for formal dispute proceedings earlier. There is a natural disinclination to confront people you continue to work with, but it may become apparent that lengthy exchanges of letters and emails are getting nowhere.

Finally, if you believe you are in the right, don't give up.


May 2000: PCT offered funded access target.

April 2004: Target achieved, PCT decline to pay.

June 2006: Agreement to pursue NHS arbitration.

May 2007: Arbitration panel finds in favour of our practice and we submit a claim for interest.

July 2007: We receive £18,017.

December 2009: NHS arbitration starts for interest owed.

February 2010: Substantial offer received from the PCT and accepted.

May 2010: Practice receives a further £5,000.

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