Judgment: 2005-07-06 · Court archive

Supreme Court rejects pharmacies’ challenge to community pharmacy contract

The court upheld the High Court’s refusal of relief, finding the contract was a permissible arrangement under the Health Act and rejecting claims that its challenged terms were unreasonable or irrational.

Supreme Court ·

Who, what, where, when and why

Who
  • Collooney Pharmacy Ltd (Applicant)
  • Hollyhill Pharmacy Ltd (Applicant)
What

The court upheld the High Court’s refusal of relief, finding the contract was a permissible arrangement under the Health Act and rejecting claims that its challenged terms were unreasonable or irrational.

Where

No place detail is included in this summary.

When

Judgment:

Why

Reasons reported in the judgment

The Supreme Court rejected an appeal by Collooney Pharmacy Ltd and Hollyhill Pharmacy Ltd against the High Court’s refusal to grant relief over the terms of a new community pharmacy contract. In a judgment delivered by Mr Justice Kearns on 6 July 2005, the court confirmed the High Court order.

The Supreme Court rejected an appeal by Collooney Pharmacy Ltd and Hollyhill Pharmacy Ltd against the High Court’s refusal to grant relief over the terms of a new community pharmacy contract. In a judgment delivered by Mr Justice Kearns on 6 July 2005, the court confirmed the High Court order.

The pharmacies argued that the contract, negotiated between the Department of Health and the Irish Pharmaceutical Union (IPU), operated like a regulation and could not lawfully be imposed through arrangements under section 59 of the Health Act 1970. They also challenged particular provisions as unreasonable or irrational, including requirements for a supervising pharmacist with at least three years’ community pharmacy experience and clauses dealing with contract termination.

The court rejected the argument that the contract was an impermissible form of delegated legislation. It said the agreement followed lengthy negotiations with the IPU, a registered trade union authorised to negotiate on behalf of its members. The pharmacies had signed the agreement and could instead have remained under the previous contract, the court said. It also found that health boards were not required to negotiate separately with each pharmacy and that uniform terms helped ensure consistent provision of services.

The judgment held that section 59 gave health boards both the power and duty to make arrangements to supply medicines to eligible people. They could include terms reasonably needed to secure a high-quality and reliable service, provided those terms stayed within the section’s scope. The court said the contract did not depend on regulations being in force and did not improperly interfere with pharmacists’ rights under the Pharmacy Act 1962.

On the specific clauses, the court considered the three-year experience requirement reasonable in light of the services and medicines involved. It found that the contract did not give health boards an exclusively unilateral power to change its terms. The judgment acknowledged difficulty in reconciling the wording of some termination provisions, but said the court should not rewrite the parties’ agreement without evidence of significant problems in its operation.

Counsel for the pharmacies accepted that the feared consequences of the challenged terms had not occurred. The court described the alleged difficulties as hypothetical, rejected all grounds of appeal and confirmed the High Court’s order. It did not grant the pharmacies relief.

Read the original court judgment

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