NHS Trusts found to be subject to competition rules

Anyone providing services to or in competition with the NHS will be interested in a ruling handed down yesterday by the Competition Commission Appeal Tribunal (CCAT) in the case of BetterCare Group Limited v The Director General of Fair Trading (DGFT).

Overturning the OFT's decision, the CCAT yesterday found that the competition rules will apply to Health & Social Services trusts when purchasing residential and nursing care. This is especially interesting as in many cases the NHS could be in a strong position and in these cases it would need to ensure that its behaviour does not infringe the Chapter II prohibition of an abuse of a dominant position.

BetterCare Group (which runs private care homes) had complained to the OFT that North & West Belfast Health and Social Services Trust (N&W) was abusing a dominant position by offering unfairly low prices and unfair terms in its purchases from BetterCare of residential and nursing care. N&W was Bettercare's main customer in the north and west Belfast area. The OFT rejected BetterCare's complaint on the grounds that N&W when purchasing residential and nursing care for the disadvantaged using public monies was not acting as an 'undertaking'. The Competition Act 1998 only applies to undertakings.

BetterCare appealed to the CCAT on two points. The CCAT has upheld both of these points in finding that (i) the OFT had made a decision that was appealable; and (ii) N&W was engaged in economic activities (and is therefore an undertaking) in running its statutory residential homes and in contracting-out the supply of nursing and residential care to independent providers.

The OFT is considering whether to appeal the decision to the Court of Appeal in Northern Ireland.

If you have any questions on these matters, please do not hesitate to contact David Marks or Sue Hankey on +44 20 7367 3000 or by emailing them at [email protected].