The Medical Specialist Group has been successful in its appeal against a fine handed down by the Competition and Regulatory Authority over an historic competition breach.
The GCRA had imposed a £1.5million 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.
However, last year the MSG successfully appealed against the decision through the courts, with Bailiff Richard McMahon stating 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 fine – which was originally said to be more than 10% of the MSG’s annual turnover – has now been reduced to £96,000.
The saga started six years ago, when a complaint was made about the MSG’s contracts.
The Group has since changed them, with the anti-competition clauses removed in 2018, but the GCRA has said that it stands by many of its original viewpoints and it makes clear that the duration of the non-compete clauses the MSG had in place were unlawful, and unnecessary.
The big deciding factor in reducing the fine was that the MSG no longer using the anti-competition clauses, leading the Royal Court to decide that the fine doesn’t need to be as large. The GCRA will be picking up the financial costs.
The MSG’s chair Dr Steve Evans said he is pleased that the matter has been closed and the MSG won’t be appealing the value of the fine any further.
“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.
“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 GCRA said: “The Guernsey Competition and Regulatory Authority (GCRA) has ruled that restrictive non-compete clauses in partnership agreements can break Guernsey competition law. This decision aims to support fair competition, innovation, and choice for local consumers.
“Non-compete clauses, which can prevent individuals from starting new businesses or working for competitors, may stifle innovation and limit options for the community. In a recent case, a complaint from a former Medical Specialist Group (MSG) doctor highlighted how such a clause prevented him from setting up First Contact Health, a new business offering services like physiotherapy and MRI scanning.
“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.”
More to follow…
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