The High Court has rejected a challenge by Positive Action Limited to the Health Service Executive’s requirement that it sign a standard funding agreement as a condition of future grant aid.
In a judgment delivered on 1 May 2013, Mr Justice Birmingham found that the HSE had power under section 39 of the Health Act 2004 to decide whether to provide assistance and what terms and conditions to impose. He held that Positive Action’s claim based on legitimate expectation could not prevent the HSE from exercising that statutory discretion.
Positive Action supports women and family members infected with Hepatitis C through contaminated blood products. It had received State funding since 1995, with the HSE providing funds from 2005. After discussions in 2008 and 2009, the parties agreed a tailored funding document. Similar agreements were used for 2010 and 2011.
The HSE told Positive Action in November 2011 that funding for 2012 would require a standard agreement. The group objected, arguing that the generic terms were designed for service providers and could compromise its independence as an advocacy organisation. It said earlier discussions and tailored agreements had created a legitimate expectation that future funding would also be governed by a bespoke agreement. It also argued that it had relied on that understanding when it discontinued an office manager position.
The HSE argued that its statutory power to set conditions for assistance meant past funding arrangements could not bind it to the same terms in future. The court noted that each year’s funding was addressed separately and that the proposed change applied prospectively to 2012, rather than retrospectively.
The judge said the HSE was entitled to change its approach and that the court should exercise restraint in reviewing funding conditions set by the body given statutory responsibility. He also rejected the claims that the decision was irrational or unreasonable. The judgment referred to an internal HSE audit recommending that standard service-level agreements be in place for each funded organisation each year, and to the scale of HSE funding across more than 2,400 voluntary and non-statutory organisations.
The court dismissed the claim and held that no illegality attached to the HSE’s decision to impose conditions on future funding. It did not order the HSE to provide funding or determine that Positive Action had a right to future grant aid.