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The news this week that the Medical Specialist Group has been fined £96,635 by the Guernsey Competition and Regulatory Authority for historic, unlawful and unfair uses of competition clauses within its contracts, brought to conclusion a situation that has been on the boil for several years.
With all the facts now in the public domain, Express has taken a look at how it all started, and how the dice have fallen for both the MSG and the GCRA.
In 2020 the news broke that the MSG was facing a £1.5 million fine imposed by the GCRA for anti-competitive practices related to restrictive clauses in employment contracts.
These clauses prevented former consultants from working in the island for up to five years after leaving the MSG.
The complaint in question related to former partner Ranjan Vhadra, who brought the existence of the competition clauses to the attention of the GCRA.
The report available on the GCRA website HERE details the interactions between the MSG and its former partner.
Mr Vhadra had trained as an orthopaedic surgeon in the UK and joined the MSG as an Associate in December 2004, having moved to Guernsey the previous month. He went on to work as a specialist orthopaedic surgeon at the MSG for nearly 13 years.
In 2017, Mr Vhadra retired from the MSG and signed a retirement and settlement agreement, which involved the health care provider agreeing to pay a purchase price for Mr Vhadra's share in the partnership with the final payment to be made within a full week after 30 June 2018.
The general partnership agreement prevents a departing consultant from directly or indirectly carrying on or being involved in the practice of Medical Practitioner within the Bailiwick of Guernsey for a period of five years.
One year after leaving the MSG, Mr Vhadra opened a new business called First Contact Health of which he is the co-Founder, CEO, and shareholder.
In October 2018, less than a week after First Contact Health had opened, he was written to by the then-Chairman of the MSG, who noted Mr Vhadra’s involvement with the business. The letter referenced the non compete restriction set out in clause 35 of that General Partnership Agreement, and recalled that under the terms of the settlement agreement that clause would continue to apply to Mr Vhadra.
The MSG expressed concern that Mr Vhadra might be in breach of that clause and invited him to explain his involvement.
The letter also informed Mr Vhadra that the MSG reserved the right to hold him responsible for any losses suffered in respect of any past or future breaches of that non-compete restriction.
Pictured: First Contact Health in St Peter Port.
Mr Vhadra responded to the MSG's letter stating that he believed the clause was void and unenforceable, because it constituted an unreasonable restraint of trade.
He objected to the wide scope of the clause which prevented him from working in an area not in direct competition with the MSG. He also objected to the long length of time for which it applied, and to the £1,000 pound liquidated damages stipulation, which he considered to be a penalty clause.
This led to a lengthy back-and-forth between the parties, with them not being able to come to an agreement. One side said his new line of work breached these clauses, the other said they shouldn’t exist in the first place.
However, the MSG also stipulated that Mr Vhadra had to permanently cease any and all involvement with First Contact Health, including but not limited to, any form of consultancy, treatment, advice and guidance, and to have his name and contact details permanently removed from its website.
Anything identifying Mr Vhadra as providing services to First Contact Health had to be removed from the clinic itself and destroyed. He also would not be able to be involved in First Contact Health or any company that were seen as a similar enterprise, venture or business, until after October 2022, which was four years later at the time.
In December 2018, Mr Vhadra complained to the GCRA. Four days later the MSG issued an arbitration notice, and the court systems came into play.
On 1 February 2019, Mr Vhadra commenced proceedings at Guernsey’s Royal Court. He did that in the name of himself, Mr Peter Watson and both First Contact Health (Guernsey) Limited, and First Contact limited. Together they sought damages of £566,666.
Four months later an agreement was reached.
Mr Vhadra was no longer able to work, or portray himself as a Medical Practitioner locally until 1 January 2020 - which would be two years earlier than originally agreed upon, but still three years after he left the MSG. That agreement was only in relation to services offered by First Contact Health. If Mr Vhadra were to leave or look to work with any other provider locally, he’d have to wait until the original date of 2022.
Under this agreement, Mr Vhadra was granted a two-week handover period, and was still allowed to refer to himself as a Consultant Orthopaedic Surgeon, but only in the past tense. He was no longer allowed to meet with patients, unless it was in his role as CEO, and for a few extra tasks like MRI scans, writing expert medical reports for personal injury cases, and supervising staff for compliance purposes.
Pictured: Ranjan Vhadra.
As the private litigation was coming to a close, the GCRA’s investigation properly began.
It suspected that the MSG was using clauses that broke certain sections of the 2012 ordinance and all the involved parties were informed of the GCRA’s decision to investigate.
Three days later, those clauses were terminated, at the same time as the MSG and the Plaintiffs had agreed to settle.
The next day the GCRA again contacted the relevant parties requesting anything pertinent to the investigation. Four days after that, Mr Vhadra contacted the GCRA and informed them he no longer wished to pursue his complaint against the MSG.
The investigation continued though, as the GCRA stated that the private litigation was still not relevant to its work.
In September 2021, the Authority adopted the First Infringement Decision. In October 2021 the MSG lodged their appeal.
December 2021 saw the original £1.5 million fine handed down with an appeal lodged by the MSG.
Almost a year later, the Royal Court handed down its judgement, with the Bailiff Richard McMahon stating that the MSG had “established that the GCRA has reached a decision that is unreasonable and/or based on material errors as to the facts".
By 2025, the appeals process had seen the fine reduced by 95%.
Pictured: The Medical Specialist Group in Guernsey, St.Peter Port.
The report released earlier this week confirmed that the MSG was fined £96,635 because it had entered into agreements with another (Mr Vhadra), which contained restrictions that "have the object or effect of preventing competition within markets in Guernsey".
The MSG had argued that these clauses were necessary to protect patient care and to attract top talent to the island, whilst the GCRA came from the perspective that the contract clauses unfairly limited competition.
The MSG appealed the fine, arguing the GCRA's decision was unreasonable and based on factual errors, which led to that lengthy legal battle which came to it’s conclusion last year, when Bailiff Richard McMahon stated that “the MSG has established that the GCRA has reached a decision that is unreasonable and/or based on material errors to the facts”.
The appeals process saw the Royal Court side with the MSG, overturning the fine and ordering the GCRA to pay legal costs.
The Court had found the GCRA's decision went beyond what was necessary to address any potential competition law violations. However, with the Court also acknowledging the need for further consideration of the appropriate length of the clauses, it remitted the matter back to the GCRA for further investigation if deemed necessary.
At the time the GCRA stated it was considering the judgment and had not ruled out further action. The news of the 95% reduction in the amount of fine delivered on that consideration.
Following the publication of the GCRA’s final decision and penalty, the MSG chair Dr Steve Evans said:
“After a process which has gone on for almost six years, we welcome the fact that the matter is now closed. The GCRA's findings today relate to an historic issue over the length of our non-compete clauses, as they were before we voluntarily reduced them in 2018. We took this action long before the GCRA began its investigation.
Pictured: Chair of the Medical Specialist Group, Dr Steve Evans.
“The Bailiff recognised we had done this in his 2023 judgment which upheld in full our appeals against the original decision and penalty from 2022, when he commented that he regarded the position with respect to the non-compete clauses before 2018 as "little more than historic”.
“Although we take issue with significant parts of the GCRA's decision-making process, the legal and management costs of an appeal, together with the fact that the GCRA has reduced the fine to £96,635 (almost a 95% reduction on the original proposed penalty of £1.5 million), mean that it is not economic to expend more time and resources on an appeal.
“Our motivation throughout this time has been to protect the emergency and elective healthcare services that we provide to the people of Guernsey under our contract with the States. We are pleased that we can now focus all our efforts on our primary purpose as doctors of improving the health of the community we serve.”
The Guernsey Competition and Regulatory Authority ruled that “these restrictive non-compete clauses in partnership agreements can break Guernsey competition law.” They add that the decision aims to “support fair competition, innovation, and choice for local consumers”.
It also said that non-compete clauses can prevent individuals from starting new businesses or working for competitors, and may stifle innovation and limit options for the community.
In this case the GCRA found MSG's actions unfairly restricted competition and therefore violated the law.
“While non-compete clauses can be legitimate in some cases, they often harm economies by limiting job options, suppressing new ideas, and making it harder for startups to succeed. This also keeps wages low and slows economic growth.”
“The ruling includes a fine against MSG, emphasising the importance of fair competition. It brings Guernsey in line with international trends, such as the UK's plan to limit non-compete clauses to three months and proposals in the US to ban them entirely.”
“The decision ensures professionals in Guernsey have the freedom to innovate and contribute to a thriving local economy.”
Eight years after Ranjan Vhadra left the MSG, the chapter can finally be put to bed.
“We welcome the decision from GCRA," said First Contact Health. "We are grateful for the opportunity to be able to provide an innovative business model within medical healthcare.
"Our mission has always been to offer islanders greater choice for their medical needs. Innovation brings with it the ability to lower prices to make private healthcare more affordable.
“We hope this ruling encourages greater collaboration between all healthcare professionals across both private and public sectors to create better pathways and options that ultimately lead to the best possible outcomes for the people of Guernsey.
"We also believe this ruling will encourage doctors and specialists in healthcare to come and work in our beautiful island.”
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