The Supreme Court has overturned a High Court finding that the Minister for Health breached the terms of five pharmacists contracts with health boards in 2002 by ending the system of advance payments to pharmacists for services under the General Medical Services (GMS) scheme.
In a 2007 decision, the High Court ruled the five community pharmacists were entitled to the benefit of advance payments under the GMS scheme for “as long as their contracts remain in force”. However, those contracts could be terminated or renegotiated, Mr Justice Frank Clarke added.
The five judge Supreme Court today found the High Court judge misdirected himself in law in finding the terms of a 1971 Memorandum providing for advance payments (negotiated between the Irish Pharmaceutical Union and the Minister) were
incorporated into the 1996 Community Pharmacy Contract Agreement between pharmacists and the health boards (now the HSE).
The issue was whether terms in a collective bargaining agreement, such as the 1971 Memorandum, were incorporated into individual contracts between the pharmacists and the health boards, Ms Justice Fidelma Macken said.
There was no express support in any of the relevant documents or the evidence for the High Court finding those terms were imported into the 1996 contract, she ruled.
That finding of importation had led to the High Court wrongly concluding the Minister for Health’s decision of December 2002 to stop the payments constituted an “unlawful variation” of agreed terms of standard form contracts between the five individual pharmacists and the HSE, she also found.
The High Court erred in finding the Minister had breached the terms of the pharmacists contracts with the health boards, she concluded. She agreed with the High Court those contracts could be renegotiated or terminated.
Ms Justice Macken’s conclusions were agreed with by the four other members of the court - the Chief Justice, Mr Justice John Murray, Ms Justice Susan Denham, Mr Justice Adrian Hardiman and Mr Justice Hugh Geoghegan.
The Supreme Court was allowing the appeal by the Minister and the State against the High Court decision on proceedings in which the IPU and the five pharmacists challenged the decision of the Minister of December 2002 to stop such advance payments.
In his High Court findings, Mr Justice Clarke dismissed the IPU claim that it itself had a contractual right, under agreements of 1971 and 1996 to have advance payments made to pharmacists under the GMS. The IPU did not appeal that finding.
However, the judge found the Minister’s decision to stop the payments constituted an “unlawful variation” of agreed terms of standard form contracts between the five individual pharmacists and the HSE.
He ruled, under a clause of the Community Pharmacy Contractors Agreement, the five pharmacists were entitled to the benefits of advance payments, on the basis of agreements between the Minister and IPU, for “as long as their contracts remain in force”. Those contracts, the judge found, may be terminated or renegotiated.
After the High Court proceedings, lawyers for the Minister and the HSE said the court had made clear they had the option of terminating or renegotiating the contracts.
In the action, the IPU claimed an agreement was entered into in 1971 to secure the participation of retail pharmacists in the reorganised GMS scheme. This involved the Minister making advance payments to retail pharmacists to fund their costs of providing medicines and medical equipment to service the GMS and payments were made in accordance with that agreement up to 1996, it said.
In June 1996, the IPU and the Minister entered an agreement for the provision of community pharmacy services which introduced the standard community pharmacy contractor’s agreement. The IPU said it was relying on representations to the effect the 1996 agreement did not affect or alter the advance payments.
