Dr MN v NHS Foundation Trust L

Lord Justice Singh: Introduction

1. The main issues in this appeal are (1) whether a consultant doctor’s contract of employment incorporated a term contained in an external policy document known as ‘E27’, and, if so, (2) whether that term (para 1.6 of Appendix A to E27), on its correct interpretation, requires that the role of Case Manager in an investigation must be carried out by the employer NHS Trust’s Medical Director personally and therefore cannot be delegated to another person.

2. In the High Court, Sheldon J (“the Judge”) decided those issues in favour of the Respondent, Dr MN, whose employer, the NHS Foundation Trust L, now appeals with the permission of this Court, which was granted by me on 15 September 2025. There is also an appeal against the costs order made by the Judge, who awarded the Respondent his costs in full.

3. Anonymity was ordered in the High Court and has been continued in this Court because of the sensitive background to this case. Dr MN gave evidence in the first criminal trial of Lucy Letby, a nurse who has been convicted of the murder of seven children in hospital and the attempted murder of seven others in the period 2015-2016. Dr MN was granted lifetime anonymity by the judge at the first criminal trial. My order of 14 October 2025 confirmed that orders made in the current proceedings in respect of anonymity, access to the court file and reporting restrictions, are to be continued and apply mutatis mutandis to this appeal; and that the Appellant is to be referred to as NHS Foundation Trust L and the Respondent as Dr MN.

4. I am satisfied that those restrictions remain necessary and do not inhibit the ability of the public to understand the issues in this appeal, which are issues of principle and do not depend on the precise identity of certain individuals or of the relevant NHS Trust which is the Appellant. Factual background

5. The Judge set out the factual background in detail at paras 4-36 of his judgment, and so I can be relatively brief in summarising the facts for the purpose of this appeal.

6. Dr MN is a Consultant in Diabetes and General Paediatrics employed by NHS Foundation Trust L (“the Trust” or “the Appellant”).

7. Dr MN had worked with Lucy Letby at the Countess of Chester Hospital (“COCH”). Dr MN then left COCH and started working at Hospital X. On 1 July 2018, he was employed by the Trust as a substantive Consultant.

8. In these proceedings Dr MN has brought a claim for breach of contract against the Trust, seeking declaratory and injunctive relief to prevent the Trust from breaching his contract of employment with respect to an investigation that they are carrying out, and as to the next steps that may be contemplated by the Trust following the conclusion of that investigation.

9. In brief, Dr MN is under investigation because (1) he arranged an observership for Lucy Letby at Hospital X (I do not understand there to be an allegation that Lucy Letby harmed patients during this observership); (2) Baby N, one of the babies that Lucy Letby was convicted of attempting to murder, was transferred to Hospital X, and Dr MN allegedly broke patient confidentiality by sharing information with Lucy Letby about Baby N’s condition after the transfer.

10. After the first trial of Lucy Letby, Dr MN contacted the Trust’s Deputy Chief Medical Officer to inform him of his involvement in the trial and of Lucy Letby’s observership at Hospital X.

11. On 29 August 2023, the Trust received a complaint from the mother of Baby N regarding Dr MN’s alleged breach of confidentiality.

12. On 23 January 2024, Dr MN was informed that the Trust intended to undertake a formal investigation. Dr MN was provided with a letter from Ms Y, the Trust’s Director of Corporate Affairs, who had been appointed as the “Case Manager” for the investigation. She was appointed by Mr Z, the Trust’s Chief Medical Officer (or Medical Director – it is common ground in this appeal that nothing turns on that difference in nomenclature). The letter stated that the investigation would not be carried out under the policy ‘Maintaining High Professional Standards in the Modern NHS’ (“MHPS”).

13. The Respondent’s legal representatives queried why the investigation was not being carried out under MHPS. The Trust’s position was that the MHPS did not apply as the matter was not one of conduct or performance. After correspondence with Dr MN, the Trust maintained that stance but agreed to apply MHPS as part of a general obligation to treat Dr MN fairly.

14. Dr MN gave evidence to the Thirlwall Inquiry and Ms Y communicated with the Solicitor to the Thirlwall Inquiry regarding the proper procedures for carrying out the investigation given the ongoing Inquiry.

15. On 12 April 2024, Ms Y informed Dr MN in writing that, with regard to the application of MHPS to the investigation, “to regularise matters ... the Medical Director will assume the nominal role of Case Manager but will however delegate responsibility for this to myself”.

16. Matters were not resolved in correspondence between the parties and so proceedings were issued in the High Court on 21 March 2025.

17. The trial took place before the Judge between 7 and 9 July 2025. He had the benefit of oral evidence, although, ultimately, the main issues before him turned on documentary evidence rather than oral evidence. The Judge summarised the witness evidence that was given at the trial at paras 37-45 of his judgment. It is unnecessary for me to rehearse it for the purposes of this appeal.

18. The Judge gave judgment on 31 July 2025. Dr MN’s claim for breach of contract succeeded. In compliance with the order of the Judge, the Trust’s Chief Medical Officer, Mr Z, has now assumed the role of Case Manager in Dr MN’s case. The key documents

19. Dr MN entered into a written contract of employment with the Trust on 1 July 2018.

20. The key documents are the following: (1) Dr MN’s contract of employment: a) Clause 17.1 of Dr MN’s contract of employment stated: “Wherever possible, any issues relating to conduct, competence and behaviour should be identified and resolved without recourse to formal procedures. However, should we consider that your conduct or behaviour may be in breach of our code of conduct, or that your professional competence has been called into question, the matter will be resolved through our disciplinary or capability procedures (which will be consistent with the ‘Maintaining High Professional Standards in the Modern NHS’ framework), subject to the appeal arrangements set out in those procedures.” b) Schedule 19 provided, at para 4, for the Grounds of Termination of employment, which included “where there is some other substantial reason to do so in a particular case”. (2) Maintaining High Professional Standards in the Modern NHS (“the MHPS”): a) MHPS is an NHS framework for handling concerns about doctors and dentists. b) When introduced, it was agreed with Monitor, formerly the statutory regulator of NHS foundation trusts, since dissolved and its function replaced by NHS England, that the framework should be issued to Foundation Trusts as advice. Other NHS bodies employing doctors were required, by government direction, to implement the framework into their local procedures. At para 4 of Part I (‘Action when a concern arises’), in a section headed ‘Framework for NHS procedures’, it is said: “… The Medical Director will act as the case manager in cases involving clinical directors and consultants and may delegate this role to a senior manager to oversee the case on his or her behalf in other cases. The Medical Director is responsible for appointing a case investigator. …” (3) E27 ‘Handling concerns about conduct, performance & health of medical & dental staff’: a) This is the Trust’s policy designed to be consistent with MHPS. b) Para 1.1 of E27 provides that it is an agreement between the Trust and the Local Negotiating Committee, outlining the employer’s procedure for handling concerns about doctors’ and dentists’ conduct, performance and health. c) Para 1.6 of Appendix A to E27, which is the key provision which lies at the heart of this appeal, states: “Any potentially serious concerns, i.e. those which have or may adversely affect patient care, must be registered with the Chief Executive and he or she must ensure that a Case Manager is appointed. The Chairman of the Board must designate a non-executive member ‘Designated Board Member’ to monitor the case during the investigation process and ensure that momentum is maintained. From this point he/she will receive reports, review any continued exclusion and/or restriction from work, consider any representations from the practitioner about his/her exclusion and/or restriction, and consider any representations about the investigation. All concerns should be investigated quickly and appropriately. A clear audit route must be established for initiating and tracking progress of the investigation, its costs and resulting action. However the issue is raised, the Medical Director will need to work with the Director of Human Resources and OD and NCAS to decide the appropriate course of action in each case. The Medical Director will act as the Case Manager in cases involving Clinical Leaders i.e. Clinical Directors and Service Group Leads and consultants and may delegate this role to a senior manager to oversee the case on his or her behalf in other cases. The Medical Director is responsible for appointing a Case Investigator.” (Bold in original) The words that call for interpretation in this case are, in particular, those in the penultimate sentence.

21. On behalf of the Respondent Mr Mark Sutton KC emphasised that the purposes of E27 included, at para 2.2, that it was “designed to inform all staff of the Trust’s policy and procedures, and their rights and responsibilities in relation to such matters” (emphasis added). Further, para 2.3 states that the Trust is committed to ensuring that all conduct, performance and health matters “are dealt with in a fair and consistent manner. This policy and procedure provides a framework to ensure this happens.” The judgment of the High Court

22. At para 3 of his judgment, the Judge set out the issues as identified by the parties as follows: “1. Whether policy E.27 is incorporated into the employment contract.

2. Whether the following provision in Policy E27 Appendix A at paragraph 1.6 is apt to be given contractual effect: The Medical Director will act as the Case Manager in cases involving Clinical Leaders ie Clinical Directors and Service Group Leads and consultants and may delegate this role to a senior manager to oversee the case on his or her behalf in other cases.

3. Whether by appointing and/or delegating Ms Y to undertake the role of Case Manager in C’s case, D has acted (and continues to act) in breach of Policy E27 Appendix A at paragraph 1.6.

4. If issues (1) - (3) are determined in favour of D: (a) whether, by appointing Ms Y as Case Manager and/or delegating the role of Case Manager to her, D has acted (and continues to act) in breach of the implied terms of the employment contract. (b) Whether, by authorising Ms Y to continue to undertake the role of Case Manager, in circumstances where she has provided evidence to the Thirlwall Inquiry in relation to matters related to the subject matter of D’s ongoing internal investigation, D has breached (and continues to breach) the implied terms of the employment contract.

5. If the Investigation Report identifies concerns which relate to C’s conduct and/or capability, is D required to implement the procedures set out in the E27 Policy at Section 3 and/or Section 4 before taking action in relation to C’s employment.

6. If C establishes a breach of the express and/or implied terms of the employment contract, should the Court exercise its discretion to grant declaratory or injunctive relief and if so on what terms?”

23. It will be apparent from that list that issue (4) would only arise if issues (1)-(3) were decided in favour of the Trust.

24. The Judge addressed issues (1)-(3) before him at paras 93-120 of the judgment and decided them in favour of the Respondent. This gives rise to the main issues on this appeal.

25. The Judge concluded, at para 132 of the judgment, that Dr MN succeeded on his claim. He said that it was a term of Dr MN’s contract of employment that the Case Manager should be the Medical Director and that the Trust must ensure that Mr Z carries out that role once the investigation has been completed, unless one of the exceptional circumstances that justifies departure from that requirement applies.

26. As to relief (issue (6) before him), the Judge considered that it would be appropriate to grant declaratory relief which set out his finding as to the proper interpretation of Dr MN’s contract of employment with respect to the identity of the Case Manager for this investigation: see para 131 of the judgment. Issue (4)

27. The Judge concluded that it was not necessary to decide issue (4) because he had found in the Respondent’s favour on issues (1)-(3). However, the Judge indicated that, while it was too early to assess the fairness of the investigation process as a whole, it seemed at this point that Ms Y would be able to keep an open mind and conduct the investigation fairly. Issue (5)

28. Once again, the Judge said that it was not necessary to decide issue (5). However, the Judge discussed the parties’ arguments on whether, if the Investigation Report identifies concerns relating to Dr MN’s conduct and/or capability, it would have to apply sections 3 and/or 4 of the E27 policy. He concluded that conduct/capability issues would need to be considered under E27 but matters relating purely to the Trust’s reputation would not. The Judge’s orders

29. The Judge made two orders to give effect to his judgment. The order of 31 July 2025 simply recorded that Dr MN’s claim for breach of contract succeeded to the extent set out in the judgment and adjourned consequential matters.

30. By the order of 14 August 2025 the Judge granted a declaration that it is an express term of Dr MN’s contract that the Medical Director (in this case titled Chief Medical Officer) will undertake the role of Case Manager for the matters which are the subject of the present investigation and that the Trust must ensure the Chief Medical Officer carries out the role of Case Manager once the present investigation has been completed unless one of the exceptional circumstances justifying departure, referred to in the Judgment at paragraphs 109-110, applies.

31. As I have mentioned, the Judge also awarded the Respondent his costs in full. Grounds of Appeal

32. Ground 1, which relates to the main issues in this appeal, is that the Judge erred in law in three respects: (1) by finding that the E27 policy was as a matter of law incorporated into the Respondent’s contract of employment; (2) by finding that para 1.6 of Appendix A to E27 was apt to be given contractual effect; (3) by finding that its meaning was that the reference to the Medical Director “will act as case manager” created a mandatory obligation that did not permit the Medical Director to delegate his role to a senior manager.

33. Ground 2 concerns the appeal against the costs order. I will set out that ground below, in the context of that appeal. Submissions for the Appellant

34. On behalf of the Appellant Mr Simon Gorton KC complains that the Judge wrongly proceeded from the misunderstanding that the Trust had conceded that E27 was legally binding, when no such concession had in fact been made. He suggests that this misunderstanding probably affected the Judge’s whole approach to the meaning of para 1.6. In my view, it is unnecessary to delve into this procedural history, given that the case has now reached this Court on appeal. It seems to me that the important issues for this Court are not whether the Appellant made a concession below, or whether the Judge thought that it had done so, but (1) whether para 1.6 of Appendix A to E27 is apt for incorporation into an individual doctor’s contract of employment and, if so, (2) what its meaning and effect are, on its true interpretation. I propose therefore to address the Appellant’s submissions on their merits.

35. Mr Gorton submits that clause 17.1 does not incorporate the whole of E27 into the Respondent’s employment contract. It is accepted that specific provisions in E27 may be incorporated if the test for incorporation is met; but it is submitted that the test is not met in this case.

36. First, Mr Gorton submits that para 1.6 provides general advice or guidance to the Trust. It sets out a number of steps that are to be taken by various actors in the institution and does not confer rights on individuals.

37. In this context, he submits that para 1.6 is part of a “suite of initial procedural requirements”. These requirements seek to identify roles for corporate officers within the Trust, including the Medical Director, and regulate the initial reaction of the Trust when there is a nascent MHPS concern about a doctor. Para 1.6 does not seek exhaustively to define these roles or the power and responsibilities of the Medical Director. It does not prescribe bilateral obligations between the doctor and the Trust. Given these features, para 1.6 would not be the place to address the question of delegation. Mr Gorton submits that terms to do with dismissal, pay or anything that could lead to dismissal are the sort of terms that are apt for incorporation but not a framework or guidance for employers’ procedures of the kind found in para 1.6.

38. Mr Gorton also emphasises the relatively mundane nature of the functions of the Case Manager and submits that, properly analysed, they do not require it to be the Medical Director. First, he points to the title: a Case Manager, not someone adjudicating on people’s rights. It is largely an administrative role. Secondly, it would be wrong to say that the Case Manager has to have medical skills. In any event, on the facts of this case, what needs to be investigated has nothing to do with medical skills. It is common ground that, where the doctor is below that of a consultant level, the Case Manager need only be a senior manager. Knowledge of medical skills is not thereby lost. Where the Medical Director is not the Case Manager, that person expressly has to be consulted in certain scenarios.

39. Further, Mr Gorton draws attention to other provisions in E27, which expressly deal with the subject of delegation, in particular paras 1.13, 2.9 and 2.12-2.14. I will consider these provisions in more detail below when I set out my own analysis.

40. Next, Mr Gorton submits that the Judge’s interpretation of para 1.6 places an unsustainable burden on its Medical Directors. The role of Case Manager involves onerous responsibilities as the guidance identifies particular steps that Case Managers are required to follow. He also submits that the Judge engaged in “micro-management” of the employment relationship, which courts have in the past said is inappropriate. He submits that the Judge’s order had the effect of removal of a Case Manager where no concerns had been raised about the way Ms Y had carried out her role in this case.

41. Finally, Mr Gorton submits that the Judge erred in relation to the implied term that he needed to include in para 1.6 so as to make it effective. Mr Gorton submits that that exercise of implication immediately runs into the difficulty of micro-management of the employment relationship, which is not appropriate, is highly legalistic and formalistic, and does not sit well in the overall context of this process. He submits that the implied term is difficult to reconcile with finding that para 1.6 otherwise contains a mandatory rule or that para 1.6 is sufficiently certain to be apt for incorporation. If it were in truth a mandatory rule, it is more likely that exceptions would have been expressly set out. Submissions for the Respondent

42. On behalf of the Respondent Mr Sutton submits that clause 17.1 of Dr MN’s employment contract provides the mechanism for incorporation of the E27 policy. He emphasises the origins of that policy. It is a collectively negotiated agreement. It was arrived at by a joint Local Negotiating Committee, which included senior managers and elected doctors. This ensured that its provisions strike a balance that is acceptable to both sides, employers and employees. He emphasises that the Case Manager has to take some very important decisions. They provide an important procedural safeguard before a case is referred to the General Medical Council or proceeds to a formal conduct or capability hearing.

43. Mr Sutton submits that para 1.6 does not have the flavour of guidance or aspiration. It is more about individual rights and could easily be transposed into the individual contract of employment.

44. Mr Sutton emphasises that it does make sense to have the Medical Director as the Case Manager in the case of a doctor with the seniority of a consultant. This is because they are likely to decide whether the doctor is to be exposed to a formal process which could lead to career loss or damage to prospects and reputation.

45. As to the wording of para 1.6, Mr Sutton submits that the wording expressly permitting delegation in respect of “other cases” in para 1.6 would be otiose if delegation was also possible in the case of Clinical Leaders and consultants.

46. Further, the specific delegation that is expressly referred to elsewhere in E27 (exclusion cases) does not assist the Trust. In relation to section 2 of E27, Mr Sutton submits that this is a self-contained set of procedures, with a procedural life of its own. He emphasises that exclusion can take place where there is no disciplinary process invoked. There could be, for example, the need to act quickly for clinical reasons or where there has been a breakdown in relationships at the hospital. As I have mentioned, I will consider other specific clauses in E27 below in my analysis.

47. Mr Sutton accepts that exceptional circumstances may arise necessitating a departure from the mandatory position in para 1.6 that the Medical Director will act as the Case Manager in cases involving Clinical Leaders. This would be where para 1.6 is incapable of being performed, for example because of an insuperable conflict of interest or illness. There were, however, no such exceptional circumstances in this case. If exceptional circumstances arise, Mr Sutton submits, it would be necessary to give effect to the implied obligations of trust and confidence and/or procedural fairness.

48. In relation to workability, Mr Sutton says that the Judge was correct to conclude that his interpretation would not be disastrous or unworkable. The Judge noted that a good deal of the day-to-day work would be done by the Case Investigator but emphasised that critical decisions would be made by the Case Manager.

49. Mr Sutton also emphasises that, if at the local level the provision is considered to be difficult to give effect to in practice, it is perfectly capable of being modified. The Trust could have sought to agree an amendment of the policy in accordance with the para 8 procedure on amendment by joint agreement with accredited staff-side representatives. The example of the Morecambe Bay Trust shows that there can be a looser power of delegation negotiated and agreed. But that local process would have to be consensual and would have to be consistent with the MHPS. Analysis Relevant legal principles

50. I did not understand there to be any material difference between the parties as to the relevant legal principles. As is often the case, the difference between them lies in how those principles are to be applied in the circumstances of this particular case.

51. As the Supreme Court explained in USDAW v Tesco Stores Ltd [2024] UKSC 28 ; [2025] ICR 107 , at para 3 (Lord Burrows and Lady Simler JJSC), a collective agreement is not usually legally binding but, where apt for incorporation, terms agreed under the collective agreement will commonly be incorporated into the individual contract of employment.

52. As Simler J said in Chakrabarty v Ipswich Hospital NHS Trust [2014] EWHC 2735 (QB) , at para 107, even where employment contracts do incorporate the terms of a collective agreement, not all collectively agreed terms will be incorporated into the individual contract. The term must be one which is “apt” for incorporation. In this context, Simler J cited Alexander v Standard Telephones & Cables Ltd (No 2) [1991] IRLR 286 , to which I will return below.

53. In Chakrabarty , at para 109, Simler J continued: “The cases establish that what is important is to seek to identify what the parties must objectively have intended on the basis of the words used and their context. A number of other factors relevant to this question have been identified in the cases on this subject, and are helpfully summarised in Hussain v Surrey and Sussex Healthcare NHS Trust [2011] EWHC 1670 by Andrew Smith J at [168], including that account is to be taken of the importance of the provision to the working relationship between the employer and employee and its relationship to the contractual arrangements between them; to the level of detail prescribed by the provision and the need for courts to avoid becoming involved in the micro management of internal procedures; to the certainty of the provision since the more vague and discursive the provision, the less apt it will be to have contractual status; and to whether the provision would be workable if given contractual status.”

54. In Alexander , at para 31, Hobhouse J said: “The principles to be applied can therefore be summarised. The relevant contract is that between the individual employee and his employer; it is the contractual intention of those two parties which must be ascertained. In so far as that intention is to be found in a written document, that document must be construed on ordinary contractual principles. In so far as there is no such document or that document is not complete or conclusive, their contractual intention has to be ascertained by inference from the other available material including collective agreements. The fact that another document is not itself contractual does not prevent it from being incorporated into the contract if that intention is shown as between the employer and the individual employee. Where a document is expressly incorporated by general words it is still necessary to consider, in conjunction with the words of incorporation, whether any particular part of that document is apt to be a term of the contract; if it is inapt, the correct construction of the contract may be that it is not a term of the contract. Where it is not a case of express incorporation, but a matter of inferring the contractual intent, the character of the document and the relevant part of it and whether it is apt to form part of the individual contract is central to the decision whether or not the inference should be drawn.” (Emphasis added)

55. Like Simler J in Chakrabarty , at para 109, and McCombe LJ in Sparks v Department for Transport [2016] EWCA Civ 360 ; [2016] ICR 695 , at paras 16-17, I have found that the judgment of Andrew Smith J in Hussain v Surrey and Sussex Healthcare NHS Trust [2011] EWHC 1670 (QB) , at para 168, sets out a helpful (non-exhaustive) summary of the “indicia” which are relevant to the question of whether a term in a collective agreement is apt for incorporation into an individual contract of employment.

56. In Hussain , at para 168, Andrew Smith J said: “168. There is no single test as to whether an employer and employee intended to agree that provisions of an agreement such as the Practitioners Disciplinary Procedure should be contractual between them (rather than advisory or hortatory or an expression of aspiration), and if so which provisions. The indicia that a provision is to be taken to have contractual status which are, I think, of some relevance to this case include these: i) The importance of the provision to the contractual working relationship between the employer and the employee and its relationship to the contractual arrangements between them: as I understand it, it is common ground in this case that, because parts of the Practitioners Disciplinary Procedure are contractual, in some circumstances the Trust might exclude Dr Hussain or bring disciplinary proceedings for misconduct against her. The implication of this, as it seems to me, is that provisions important to implementing the agreement about exclusion and about conduct hearings are also apt to be contractual: the more important the provision to the structure of the procedures, the more likely it is that the parties intended it to be contractual. As Auld LJ said in Keeley v Fosroc International Ltd , [2006] IRLR 961 (which concerned whether provisions relating to enhanced redundancy payments in a Staff Handbook were enforceable as part of individual contracts of employment), ‘Highly relevant in any consideration, contextual or otherwise, of an “incorporated” provision in an employment contract, is the importance of the provision to the over-all bargain, here, the employee’s remuneration package – what he undertook to work for. A provision of that sort, even if couched in terms of information or explanation, or expressed in discretionary terms, may still be apt for construction as a term of his contract … .’ (at para 34). ii) The level of detail prescribed by the provision: as Penry-Davey J said in Kulkarni v Milton Keynes Hospital NHS Trust , [2008] IRLR 949 at para 25, the courts should not ‘become involved in the micro-management of conduct hearings’, and the parties to the contract of employment are not to be taken to have intended that they should be. (In the Court of Appeal in Kulkarni , … at para 22, Smith LJ endorsed this observation of Penry-Davey J.) iii) The certainty of what the provision requires: … if a provision is vague or discursive, it is the less apt to have contractual status. iv) The context of the provision: a provision included amongst other provisions that are contractual is itself more likely to have been intended to have contractual status than one included among other provisions which provide guidance or are otherwise not apt to be contractual. v) Whether the provision is workable, or would be if it were taken to have contractual status; the parties are not to be taken to have intended to introduce into their contract of employment terms which, if enforced, not be workable or make business sense: see Malone v British Airways , [2010] EWCA Civ 1225 at para 62.”

57. Also helpful is the summary in the judgment of Green J in Al-Mishlab v Milton Keynes Hospital NHS Foundation Trust [2015] EWHC 3096 (QB) , at paras 16-21, to which Mr Gorton drew our particular attention: “16. First, in an employment context there is a power vested in the employer to manage employees, which includes establishing relevant facts and deciding how these facts affect future relations. Even where internal procedures are detailed the purpose of those procedures is to facilitate the employer’s managerial power. Where detailed procedures are silent on the matter then the fallback is that it is a managerial discretion for the employer to decide upon in relation to that gap. In this regard see MacMillan [2014] EWCA 1031, paragraph 51 and the judgments cited therein.

17. Secondly, it is accepted that there are implied terms in the Applicant’s contract that neither party will without reasonable and proper cause act in a manner that is calculated or likely to destroy or seriously damage the relationship of trust and confidence and that the defendant will in any event act fairly in the conduct of an internal disciplinary or similar process. It is therefore accepted that implied terms constrain the exercise of the employer’s discretion. But it is also submitted that the discretion remains broad: See in this regard Braganza [2015] UKSC 17 at 30 and Yapp [2014] EWCA Civ 1512 at paragraphs 59-61. In those judgments there is reference to the discretion being akin to a Wednesbury rationality test in that an employer may properly be able to exercise a discretion over a range of possible reasonable options.

18. Thirdly, it is submitted that the court should not engage in micro-management of employment procedures. Illustrations of matters which the courts have treated as micro-management may be found in the judgment of the Court of Appeal in Kulkarni [2009] EWCA Civ 789 . In that case the High Court and Court of Appeal refused to interfere in a panel where the issue concerned the alleged wrongful admission of prejudicial evidence; see also Chhabra v West London Mental Health Trust [2013] UKSC 80 , at paragraphs 36-40.

19. Fourth, there is a public interest in allowing internal processes to run their course and courts should be slow to interfere if disputed issues can be sorted out and resolved within the framework of the internal procedure itself. See for example, Makhdum [2012] EWHC 4015 per Beatson J. at paragraph 51 where the judge indicated that it would in effect require serious irregularities before the court would consider interfering. He also intimated (see paragraph 52) that where the parties have agreed upon a process the court should prima facie respect the contractual intention of the parties and allow the process to occur. Similar observations were made by Mann J. in Hendy v MOJ [2014] EWHC 2539 at paragraph 49 and see also Sarker [2015] EWHC 165 to similar effect.

20. Fifthly, there is a public interest that matters which need to be taken of a substantive nature, (which would in my view include a decision upon the capability of a practitioner to work within the NHS) should be taken by the mandated expert panel: See by way of illustration Dr A v HTX [2012] EWHC 857 (QB) at paragraph 203.

21. Finally, I should refer to the decision of Simler J. in Chakrabarti [2014] EWHC 2735 at paragraphs 116 and 160-163 for the proposition that procedures should be applied with flexibility.”

58. Like McCombe LJ in Sparks , I have found helpful guidance in what was said by Dyson LJ during the course of argument in Keeley v Fosroc International Ltd [2006] EWCA Civ 1277 ; [2006] IRLR 961 , as recorded in the judgment of Auld LJ at para 36. In Sparks , at para 31, McCombe LJ said: “… I would add that, for my part, this provision would also meet the test suggested by Dyson LJ in Keeley’s case [2006] IRLR 961 , para 36. If the provisions had been set out in the same terms in a formal contractual document could it seriously have been argued as a matter of construction that it was not apt for a contractual term and, on that account, not part of the contract? I think not.”

59. Furthermore, as the Supreme Court observed in USDAW , the “two-stage process”, as they described it, (a collective agreement followed by individual contracts of employment) does not pose any particular difficulty in applying the usual objective and contextual approach to contractual interpretation: see para 4 in the judgment of Lord Burrows and Lady Simler. The usual approach to the interpretation of contracts applies. The usual approach to the implication of terms into the individual contract also applies: see paras 43-48 of their judgment. In this context, it has to be borne in mind what Lord Burrows and Lady Simler said at para 47: “The purpose of interpretation and of a term implied by fact is to identify what the parties have expressly or impliedly objectively agreed, not what the court thinks that they should have agreed. Nor is it the function of a court when interpreting an agreement or implying a term by fact to relieve a party from the consequences of poor advice or bad judgment.”

60. Earlier, at para 35, Lord Burrows and Lady Simler said: “This justification for the strict constraint applied to the implication of terms by fact was approved by the Supreme Court in Marks and Spencer plc v BNP Paribas Securities Services Trust Co (Jersey) Ltd [2016] AC 742 , where, at paras 15 to 31, Lord Neuberger PSC authoritatively restated the long established and consistent learning on this question. It is unnecessary to rehearse the principles that govern when a court may properly imply a term by fact into a contract. They are not in dispute. It is sufficient for our purposes simply to reiterate that, to imply a term by fact, the term must be necessary for business efficacy or the term must be so obvious that it goes without saying; it must be capable of clear expression; and it must not contradict any express term of the contract. Importantly, as Lord Hughes JSC emphasised in Ali v Petroleum Co of Trinidad and Tobago [2017] ICR 531 , para 7 (‘ Ali ’), ‘the process of implying a term into the contract must not become the rewriting of the contract in a way which the court believes to be reasonable, or which the court prefers to the agreement which the parties have negotiated’.”

61. This is consistent with the general approach to contractual interpretation, set out by Lord Neuberger PSC in Arnold v Britton [2015] UKSC 36 ; [2015] AC 1619 , at paras 15-20. All of the seven factors to which Lord Neuberger referred at paras 16-20 need to be borne in mind but they are well-known and it is unnecessary to set them out here. In Arnold v Britton , at para 15, Lord Neuberger PSC summarised the position as follows: “When interpreting a written contract, the court is concerned to identify the intention of the parties by reference to ‘what a reasonable person having all the background knowledge which would have been available to the parties would have understood them to be using the language in the contract to mean’, to quote Lord Hoffmann in Chartbrook Ltd v Persimmon Homes Ltd [2009] AC 1101 , para 14. And it does so by focussing on the meaning of the relevant words, in this case clause 3(2) of each of the 25 leases, in their documentary, factual and commercial context. That meaning has to be assessed in the light of (i) the natural and ordinary meaning of the clause, (ii) any other relevant provisions of the lease, (iii) the overall purpose of the clause and the lease, (iv) the facts and circumstances known or assumed by the parties at the time that the document was executed, and (v) commercial common sense, but (vi) disregarding subjective evidence of any party’s intentions. In this connection, see Prenn [1971] 1 WLR 1381 , 1384-1386; Reardon Smith Line Ltd v Yngvar Hansen-Tangen (trading as HE Hansen-Tangen) [1976] 1 WLR 989 , 995-997, per Lord Wilberforce; Bank of Credit and Commerce International SA v Ali [2002] 1 AC 251 , para 8, per Lord Bingham of Cornhill; and the survey of more recent authorities in Rainy Sky [2011] 1 WLR 2900 , paras 21-30, per Lord Clarke of Stone-cum-Ebony JSC.” Application of those principles to the present case

62. Applying those principles to the present case, in essence I agree with the submissions which have been made on behalf of the Respondent and with the Judge’s analysis, at paras 103-116 of his judgment. I can, accordingly, focus on the key points here.

63. In my judgment, para 1.6 of Appendix A to E27 does have the indicia that make it apt for incorporation into the individual contract of employment and it does have the meaning and effect that the Judge gave it.

64. First, the natural meaning of the language used in para 1.6 is that the Medical Director “will act” as the Case Manager. That is what it says. This is in express contrast to what is said in the same sentence is to happen in “other cases”, where there is a discretion given for this function to be delegated (“may”). I agree with the Judge that, in this context, “will act” has the same meaning as “must act”, in other words that there is an obligation imposed. The crucial point is that it is not a discretion, as is made clear by the contrast with what follows in the wording.

65. I agree with Mr Sutton that the language used is suitable for a contractual obligation and to confer rights on the relevant members of staff. I do not accept Mr Gorton’s submission that para 1.6 is merely addressed to various persons in the Trust as an institution. I agree with Mr Sutton that both its language and its context make it clear that it does confer rights on individual members of staff and imposes obligations on the Trust.

66. This interpretation of para 1.6 is supported by its underlying importance. It would clearly be important, in particular for a doctor as senior as a consultant, for there to be a right, and a corresponding obligation on the part of the employer, to ensure that somebody as senior as the Medical Director is the Case Manager in their case. This is because of the potentially serious impact on the consultant’s career and reputation.

67. Like the Judge, I am reinforced in this view by the consideration that, if the language of para 1.6 had been set out directly in the individual contract of employment, it would have been regarded as giving rise to a contractual requirement. This is consistent with the approach recommended by Dyson LJ in Keeley and approved by McCombe LJ in Sparks , at para 31.

68. I also agree with the Judge that this interpretation does not give rise to a provision which would be unworkable in practice. Like the Judge, I have taken account of the evidence filed on behalf of the Trust, in particular the witness statement of Mr Z, dated 9 June 2025. This set out the relevant procedural framework and the practice of the Trust. In particular, at para 24, the statement set out the reasons for delegation of the Case Manager function in this case. Mr Z said: “24. The reasons for my delegation of the case manager function include: a. It is vital that the individuals carrying out those roles are able to act independently in order to ensure a fully fair process. This is achieved by separating me from the process, as I already have a degree of knowledge of the issues and have had to form an opinion on patient safety risk and whether to impose restrictions on the doctor’s practice I may also be aware of previous issues raised in respect of the practitioner’s conduct or capability and as I also function as the Trust’s responsible officer (RO) I have oversight of all appraisal and revalidation information which includes patient and colleague feedback. By choosing a case manager who is not from within the home Division of the doctor’s speciality and has no foreknowledge of any issues in relation to the doctor, it allows an independence of mind that I as a human being may not be able to guarantee despite my best intentions. b. The breadth of my wider responsibilities within the Trust (having responsibility for over 500 consultants and Trust doctors) make it all but impossible for me to function as the day-to-day case manager for all cases.”

69. It will be apparent from that evidence that Mr Z is responsible for 500 doctors overall but what this Court does not have in evidence before it is how many of those are consultants, or how many on average go through the E27 process.

70. The evidence of David Wilkinson (an adviser to Practitioner Performance Advice, part of NHS Resolution) was that the Medical Director/Chief Medical Director served as Case Manager in 210 out of 489 cases (43%) of investigations involving consultants where a case manager had been identified: see the witness statement of Mr Wilkinson, dated 3 June 2025, at para 6. This evidence does not suggest that it would be unworkable for the Medical Director to act as Case Manager.

71. I do not accept that the Judge’s interpretation of para 1.6 represents “micro-management” of the employment relationship. As the Judge observed at para 107 of his judgment, a good deal of the day-to-day work will still be done by the Case Investigator.

72. Furthermore, as Mr Sutton observed, if this interpretation causes difficulty in practice, the parties have available to them the opportunity to seek to agree a modification of the normal contractual obligation in para 1.6 with the Local Negotiating Committee. The fact that this happened in one case which was brought to our attention (Morecambe Bay) supports this but the important point is that in principle it is possible as a matter of law. But, equally importantly, this would require modification by consent (at the collective level) and the resulting policy would still have to be consistent with the MHPS.

73. I turn next to consider other clauses in Appendix A to E27, which are said by Mr Gorton to show that there are other provisions where delegation is expressly dealt with.

74. Para 1.13 states: “Where it is decided that a more formal route needs to be followed (perhaps leading to conduct or capability proceedings) the Medical Director must, after discussion between the Chief Executive and Director of Human Resources and OD, appoint an appropriately experienced or trained person as Case Investigator . The seniority of the Case Investigator will differ depending on the grade of practitioner involved in the allegation. Several clinical managers should be appropriately trained, to enable them to carry out this role when required.”

75. Mr Gorton submits that para 1.13 requires the Medical Director in particular to appoint the Case Investigator, suggesting that, by contrast, for other tasks, delegation is allowed. This simply assumes what Mr Gorton is seeking to prove. That provision does not mention delegation of the Medical Director’s function at all. In my view, its presence does not undermine the interpretation that I would give to para 1.6.

76. Para 2.9 states: “Alternative ways to manage risks, avoiding exclusion, include:  Supervision of normal contractual clinical duties by the Medical Director , or Clinical Director;  Restricting the practitioner to certain forms of clinical duties;  Restricting activities to administrative, research/audit, teaching and other educational duties. By mutual agreement the latter might include some formal retraining or re-skilling;  Sick leave for the investigation of specific health problems.” Again, I can see nothing in this provision which expressly deals with delegation of the Medical Director’s functions, nor anything that contradicts the interpretation I would give to para 1.6.

77. Paras 2.12-2.14 explain the roles of officers in the Exclusion Process, as follows: “2.12. The Trust Chief Executive has overall responsibility for managing exclusion procedures and for ensuring that cases are properly managed. The decision to exclude a practitioner must be taken only by persons nominated under paragraph 2.14. The case will be discussed fully with the Chief Executive, the Medical Director , the Director of Human Resources and OD, NCAS and other interested parties (such as the police where there are serious criminal allegations or the Counter Fraud & Security Management Service) prior to the decision to exclude a practitioner. In the rare cases where immediate exclusion is required, the above parties must discuss the case at the earliest opportunity following exclusion, preferably at a case conference. 2.13. The authority to exclude a member of staff is vested in the individuals outlined below: Authority to exclude Grade of Practitioner Chief Executive Medical Director All other grades of medical staff 2.14. The Medical Director will act as the Case Manager in the case of consultant staff, or delegate this role to a senior manager to oversee the case, and appoint a Case Investigator to explore and report on the circumstances that have led to the need to exclude the staff member. The investigating officer will provide factual information to assist the Case Manager in reviewing the need for exclusion and making progress reports to the Chief Executive and Designated Board Member .”

78. Mr Gorton draws attention to the fact that, in the case of exclusion of consultants, para 2.14 expressly states that the Medical Director can delegate the role of a Case Manager to a “senior manager”. Since exclusion is the most serious step in the commencement of an investigation, this indicates that delegation is also allowed for other steps. I do not accept that submission.

79. I also do not agree with the Judge’s concern about this point. Unlike him, I do not find the existence of other provisions in E27 to sit “somewhat uncomfortably with this interpretation”: see para 113 of his judgment. In particular, the contrast with para 2.14, if anything, suggests that, where E27 contemplated the possibility of delegation of the role of Case Manager to a senior manager (there in the context of exclusion of a consultant), the agreement expressly said so.

80. I also accept Mr Sutton’s submission that section 2 of Appendix A is a distinct set of provisions concerned with exclusion. In that context, there may be a need to take action quickly, for example on a ward in hospital: that does not necessarily have anything to do with a disciplinary process.

81. So far as para 4.12 is concerned, I agree with the Judge that it might be said to be redundant to say that: “the Case Manager will need to consider with the Medical Director” if they are the same person but that will not always be the case. As the Judge said, the fact that this is not made clearer does not undermine the language of para 1.6, which is clear.

82. I agree with the Judge that, where necessary, there is an implied term in para 1.6 that the Medical Director may delegate the task of Case Manager to another person but this will be for reasons such as a conflict of interest or illness, which are not present in this case. The implication of that term does not cause any real difficulty or uncertainty and is consistent with the principles on the implication of terms into a contract which I have summarised above.

83. Accordingly, I have reached the conclusion that para 1.6 is apt to be incorporated into the individual contract of employment and that its meaning and effect is as the Judge also concluded. The purported delegation in this case by Mr Z to Ms Y was therefore in breach of the Respondent’s contract of employment. The Respondent’s Notice

84. If it is necessary to do so, the Respondent seeks permission to cross-appeal the conclusion reached by the Judge, at para 120 of his judgment, that, had he not found that it was an express contractual term that the Medical Director must act as the Case Manager, he would not have held that the Appellant had been acting in breach of the duty of trust and confidence by appointing someone other than the Medical Director to act as Case Manager, in circumstances where the Appellant had agreed to apply the provisions of its MHPS policy.

85. On behalf of the Appellant a supplementary skeleton argument was filed, addressing the Respondent’s attempt to cross-appeal. The Appellant submitted that there could not be a cross-appeal, because there was no adjudication by the Judge on this issue.

86. In the circumstances which have now arisen, where I would reject the Appellant’s grounds of appeal, it is unnecessary to address what are hypothetical issues, especially since they may be central to other cases in the future and the principles in this area of law are still in the process of development: see Burn v Alder Hey Children’s NHS Foundation Trust [2021] EWCA Civ 1791 ; [2022] ICR 492 , at paras 35 and 41-42 (Underhill LJ) and paras 47-48 (Singh LJ). The costs appeal

87. In awarding the Respondent his costs in full, the Judge gave the following reasons, at para 2 of the reasons set out in his order dated 14 August 2025: “The proper award of costs in this matter is for the Claimant to receive all of his costs on a standard basis. The Claimant was clearly the successful party. He succeeded on issues 1-3, 5 and 6. Issue 4 was an alternative submission and would not have been required to be argued out had the Defendant accepted the Claimant’s proposed interpretation of the proper meaning of section 1.6. Whilst there were a number of pleaded matters that were not proceeded with by the Claimant (see paragraph 10 of the Defendant’s submissions on costs), these did not add substantially to the costs of the proceedings. As the Claimant was the successful party, he should also be entitled to the costs incurred with respect to the earlier hearings before Garnham J and Jeremy Johnson J, whose orders were for ‘costs in the case’.”

88. Ground 2 of the grounds of appeal is that the Judge erred in law in awarding the Claimant the entirety of his costs when he had only succeeded in respect of part of his pleaded claim; and had failed in respect of material parts of his claim before the court. Such a failure ought to have been reflected in a different costs order so as to reflect the relative measure of success of the Claimant and the Defendant.

89. The lead on this aspect of the appeal was taken at the hearing before us by Jack Mitchell on behalf of the Appellant. Mr Mitchell criticises the reasoning of the Judge in particular because: (1) He made a costs order that ignored the matters that had been abandoned by the Respondent and abandoned so close to trial. (2) He made a costs order that did not reflect the Appellant’s success in respect of claims brought by the Respondent. (3) The Judge wrongly determined the costs issue in the absence of any budgets or costs schedules from any party to substantiate the determination that the number of pleaded matters which had not been proceeded with “did not add substantially” to the costs. In the absence of evidence, Mr Mitchell submits this was not a conclusion open to the Judge.

90. Mr Mitchell also relies on the matters to which the Court must have regard in CPR 44.2(4). He submits that the Respondent’s Particulars of Claim advanced eight issues, and that, despite the Respondent asserting that all eight issues remained live, only two were advanced at trial. He submits that the Respondent did not respond to a request to confirm in advance which of five witnesses were required at trial and that, in the event, only two were required. He submits that the Respondent only succeeded on one of the two issues ultimately pleaded at trial (because they failed to show there had been a breach of trust and confidence).

91. Mr Mitchell also complains that the costs orders made by Judges on earlier occasions should not simply have been awarded by the Judge now. They were orders made by reference to the pleaded case in full and it does not follow that everything should be awarded if a respondent succeeds only on one issue.

92. On behalf of the Respondent the lead on this issue was taken before us by Nicola Newbegin. Ms Newbegin submits, first, that a party may be awarded its costs even where it has only succeeded on part of its claim: see Civil Procedure (“the White Book”), Vol. 1, para 44.2.18; and Terracorp v Mistry [2020] EWHC 2623 (Ch) ; [2020] Costs LR 1435 .

93. In Terracorp , at para 79, Miles J quoted from an earlier summary of the principles in Sycamore Bidco v Breslin [2013] EWHC 583 (Ch) , where Mann J had said, at para 12(i): “There is no automatic rule requiring reduction of a successful party’s costs if he loses on one or more issues. In any litigation, especially complex litigation such as the present case, any winning party is likely to fail on one or more issues in the case. As Simon Brown LJ said in Budgen v Andrew Gardner Partnership [2002] EWCA Civ 1125 at para 35: ‘the court can properly have regard to the fact that in almost every case even the winner is likely to fail on some issues’ … (Gloster J in Kidsons v Lloyds Underwriters [2007] EWHC 2699 (Comm) )”

94. The question is who is “the party who has really won at trial”: see Fleming v Chief Constable of Sussex [2004] EWCA Civ 643 ; [2005] 1 Costs LR 1, at para 35 (Potter LJ). This is a reference to the successful party in the litigation and not the successful party in respect of a particular issue: see Kastor Navigation v AXA Global Risks [2004] EWCA Civ 277 ; [2004] 4 Costs LR 569, at para 143, where Rix LJ said that the general rule is that the “unsuccessful party will be ordered to pay the costs of the successful party”: CPR 44.3(2)(a). He held that, as a matter of construction, this must mean that the successful party is the “successful party in the litigation”.

95. Ms Newbegin submits that in substance the Respondent was the successful party because he succeeded in the entirety of his primary case. There were subsidiary issues but they took up relatively little of the court’s time.

96. In addition, the conduct of the parties supports the award of the costs in full. For example, the Respondent had made attempts to resolve matters via discussions between counsel. He did not abandon any part of his claim at the trial. The fact that a list of issues was agreed between the parties was a sensible and efficient way of conducting litigation in the High Court. Similarly, the decision not to cross-examine all of the Appellant’s witnesses did not reflect an abandonment of any aspects of the Respondent’s case. This often happens as a realistic and pragmatic reflection of the fact that there was limited factual dispute between the parties and the principal issue in the case turned on the proper interpretation of documents.

97. I prefer the Respondent’s submissions on the costs issue. This Court cannot interfere with the exercise of the Judge’s broad discretion in relation to costs unless he erred in principle, failed to have regard to a relevant consideration or had regard to an irrelevant consideration, or exercised his discretion in a manner which was not reasonably open to him.

98. The Appellant accepts, as it must, that the discretion is a broad one. In my judgment, this is not a case in which this Court can or should interfere with the Judge’s exercise of his discretion. He was familiar with the full range of issues and the entirety of the evidence before him. He was much better placed than this Court can be to make an assessment of whether it would be just to order the Appellant to pay the Respondent’s costs in full even though not every issue needed to be decided or was decided in his favour. I do not think that the absence of a costs budget was fatal to the exercise of the Judge’s discretion in a pragmatic and efficient way at this stage of the proceedings.

99. Accordingly, I would dismiss the appeal against the costs order. Conclusion

100. For the reasons I have given, I would dismiss this appeal. Lord Justice Nugee:

101. I agree. Lord Justice Newey:

102. I also agree.