Medical Specialist Group fined £1.5m

Friday 17 December 2021

The Medical Specialist Group has been fined £1.5million for breaking Guernsey's competition law. The fine is just over 10% of the MSG's annual turnover for private work.

The Guernsey Competition Regulatory Authority imposed the fine after deciding that the MSG had acted in an anti-competitive way by banning an ex-consultant from practising in the island for five years after leaving the organisation.

The MSG is appealing the decision, which it says is flawed and detrimental to its work. The MSG Chairman, Dr Gary Yarwood, said the partners would now have to spend more time and money fighting the fine as well.

"We continue to believe that the GCRA's conclusions are flawed and deeply unattractive and likely to impact adversely on our ability to provide the best possible health care to the people of Guernsey," said Dr Yarwood.

"This extends to the basis on which the penalty has been calculated."

Pictured: Dr Gary Yarwood, Chairman of the MSG, which is appealing the finding that it breached the island's competition law.

Dr Yarwood, a specialist in anaesthesia and intensive care medicine, said the MSG was disappointed that the fine had been imposed this week when the GCRA knew that an appeal had been lodged against its original findings. The MSG's challenge to the ruling and the fine is expected to be heard by Guernsey's Royal Court. 

"We will now need to expend time, effort and legal fees on challenging this punitive action at a time when we are working flat out to care for our patients as the omicron phase of this global pandemic continues," said Dr Yarwood.

The MSG is a partner-led organisation which was formed in 1992 to provide specialist care to patients who would otherwise need to travel to the UK. It has a contract with the States and also offers private services. 

The MSG issues contracts to its consultants and medical staff prohibiting them from working in Guernsey for between 18 months and five years after they leave its employment. The GCRA said this clause applied even if a consultant wanted to move to a different specialism – for example, moving from paediatrics to general practice.

The clause also prevented them from being indirectly involved in the provision of medical services in Guernsey – for example, as a partner in a medical services business in Guernsey – for the same period after their contract with the MSG had ended.

The GCRA said the island's competition law states: "As a rule, businesses – which includes partnerships and self-employed consultants – have to decide for themselves whether and how they compete with each other. Non-compete clauses like those used by the MSG stop businesses from competing with each other [and] they are only allowed if they are absolutely necessary - objectively justifiable - or if the business can demonstrate to the GCRA that the pro-competitive effects of the clause - including the impact on consumers - outweigh its anti-competitive effects."

Pictured: Guernsey's Royal Court has received an appeal from the MSG against the findings of the GCRA.

The GCRA decided that the MSG had provided no compelling evidence to show why the restrictive clauses its its contracts were absolutely necessary. The GCRA also decided that this could lead to harmful outcomes for both competition and consumers in Guernsey - for example, more limited choice, longer waiting times or higher prices.

The GCRA made its finding in September. It has now imposed the fine of £1.5million related to that finding. The GCRA said the fine was calculated as a percentage of turnover multiplied by the number of years of the infringement. That came to just under £1.4 million and an additional 10% was added for what the GCRA called "aggravating factors". The GCRA said that included the MSG trying to get the consultant who initiated this process to withdraw his complaint.

The MSG's appeal against the initial findings of fault by the GCRA and its fine of £1,532,950 has been lodged with Guernsey's Royal Court. A date has not yet been set for the appeal to be heard.