In granting an application for judicial review, the High Court has held that the common law duty of fairness did not require that the General Dental Council ('GDC') consult its registrants on a steep increases to their annual retention fee but that public announcements affirming the GDC's commitment to transparency created a legitimate expectation among registrants that the consultation it carried out would be sufficiently detailed.
In September 2010 the GDC agreed an 'Annual Retention Fees Policy'. The fee was set irrespective of age, working hours, type of practise or location. In 2012 the GDC announced it would review the policy.
It ultimately began the consultation on 16 April 2014 and closed it on 4 June 2014. It noted that in 2013 it raised £31 million through the ARF but spent £33.9 million, highlighted that 88% of fitness to practise expenditure related to dentists, and that fitness to practise costs had risen by 28% since 2010. On 18 June 2014 the GDC approved the new policy. It noted that 34% of respondents wanted greater detail about the cost of fitness to practise cases and why they were so high. The GDC issued a statement saying, amongst other things, that in the forthcoming consultation for the ARF level for 2015 it would provide more detail on the different aspects of the fitness to practise process.
The ARF consultation began on 30 June 2014 and ended on 4 September 2014. The paper began with a proposal to increase the fee level for dentists from £576 to £945 and for dental care professionals from £120 to £128. The consultation included a table setting out the number of complaints projected to be received as well as the number of anticipated fitness to practise hearings (which cost, on average, £78,000 each). The consultation explained that 'the significant increase in hearings predicted in 2014 and 2015 was due to a drive to process cases on a more timely basis, the need to clear a backlog of cases and the time lag from the date of a complaint being received by us and the point at which it is heard by a Fitness to Practise committee.' The consultation observed that the current level of reserves was not large enough to reduce the projected funding gap and, unless the GDC increased the annual retention fee, reserve levels were likely to sink 'below prudent levels'.
The BDA sent a pre-action letter asserting that there was insufficient information available for those consulted to understand the necessity behind the suggested fee increase. The letter suggested that 'An exponential increase in hearings in relation to a relatively modest increase in complaints required a full and proper explanation'. The letter was supported by a subsequent analysis by FTI Consulting around the figures within and methodology behind the consultation. FTI Consulting concluded that further information was required to assess whether the proposed increase was reasonable in the circumstances. In response, the GDC commissioned KPMG to conduct its own analysis. KPMG concluded that the GDC's assumptions were within a reasonable range. The GDC declined to reopen the consultation.
The BDA sought judicial review of the GDC's decision. Cranston J made clear that the common law duty of fairness did not impose a general duty on the GDC to consult in the present case. He agreed with submissions that the situation was not analogous to cases such as R (LCCSA) v Lord Chancellor  EWHC 3020 (where the decision was likely to have the effect that solicitors' firms would have to close, individual solicitors would lose their jobs and access to justice would be impeded) but was more akin to the situation in R (BMA) v GMC  EWHC 2602 where the court held that a decision by the GMC with no prior consultation to discontinue a policy exempting over 65s from the ARF was not unlawful since the 'the impact of the change in monetary terms was not, in truth, profound.'
Notwithstanding that, his lordship concluded that the effect of the GDC's public pronouncements around transparency required that it provide far more detail than it had done in the present case. He referred to the 'gaping hole' in the GDC's consultation and the 'lack of any explanation as to the assumption that an increase in complaints would translate into such a substantially increased number of fitness to practise hearings requiring an extra £18million funding… this substantially increased projection of the number of fitness to practise hearings clearly required a transparent explanation and adequate information as to how it was calculated. It is common ground that fitness to practise hearings are the main driver of costs. I accept the claimant’s submission that it was difficult to see how consultees could express an intelligent view on the proposed increases in the annual retention fee unless they had some idea of what information the very substantial projected increase in fitness to practise hearings was based on.' Accordingly, the judge declared that the consultation was unlawful. He did not direct that the consultation should be run again but invited further submissions on relief.
Registration and retention fees are the principal source of funding for most regulators. In the post-Francis world, healthcare regulators have had to deal with a significant increase in the number of complaints against registrants and a number of regulators have sought to increase retention and registration fees as a result. While other regulators may take encouragement from the decision that there is no common law duty to consult on similar fee increases, they will surely take note of the extent to which public pronouncements around transparency may create a legitimate expectation that could lead to successful legal challenge. Had the GDC been less forthright in its commitment to transparency in this case, it may be that the challenge would not have succeeded.