Settlement in BMA / NHSPS Service Charges Dispute

The British Medical Association (BMA) has confirmed that the five GP practices it has supported with service charge disputes have reached an out of court settlement with NHS Property Services Ltd (NHSPS) for a total reduction of more than £750,000. The BMA revealed that one of the practices has seen its original bill reduced by over 80%, equivalent to more than £400,000.

This follows the High Court judgment released last year for “Trial 1” in the dispute. At this stage NHSPS successfully argued that it was entitled to claim service charges notwithstanding the absence, in some cases, of written agreements with the practices.

The out of court settlement comes at a time when many NHSPS tenants were awaiting the outcome of “Trial 2”, during which the precise amounts recoverable from the five practices were due to be examined and decided. The settlement means that this forensic exercise will not play out in court although the reductions are likely to embolden other NHSPS tenants involved in similar negotiations.

It remains to be seen to what extent other disputes may be impacted and influenced by the settlement. The BMA has been careful to stress that these are not test cases and that “Practices should take care when interpreting the results of these settlements and directly applying them to their own circumstances”.

If you are affected by any of these issues or have any questions, please feel free to contact our real estate team.