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Aug 30

JR successfully challenges improper tax waivers and secures improvements in patient safety

In judicial review proceedings brought by Doctors Hospital against the Cayman Islands Government, Justice Richards Williams has found that the Government “acted inappropriately when it awarded fee waivers and concessions” to Health City Cayman Islands for “extremely lengthy periods” without putting the deal before Parliament.

Ben Tonner QC and Sally Bowler of McGrath Tonner represented Doctors Hospital together with Chris Buttler QC of Matrix Chambers, London.

The contract signed by the UDP administration 2010 with Dr Devi Shetty to build Health City, which gave away as much as $800 million in concessions and waivers, became the subject of a legal challenge by the Doctors Hospital when those concessions were transferred to an additional facility in Camana Bay and another medical tourism facility, Aster Cayman Medcity, was given a similar deal.

These new concessions were awarded just before the PPM-led coalition government was voted out of office in 2020. The new agreement for a proposed $350 million hospital in West Bay also included a number of major fee waivers.

Inappropriate tax concessions

After a three-day hearing in April this year, Justice Williams issued his ruling this month, which was released to the public on Friday. The Court found that the government had acted inappropriately in awarding substantial waivers and concessions for extremely long periods without putting the deals before Parliament.

“There is no evidence filed by the Respondent (the government) to show that it has considered or taken into account anything other than the granting waiver provisions in the Agreement or to show that it has conducted any updated reevaluation in relation to the ongoing concessions,” he said.

Justice Williams said the government should now review the deal and that it was not eternally bound in its power to raise taxes by the 2010 agreement.

The effect of this is that CIG is now free to collect taxes from Health City and Aster to the value of hundreds of millions of dollars.

Improved standards and patient safety

During the course of the case, the inequities over the registration of doctors were also addressed.

An official from the Health Practice Commission conceded that, regardless of the technical registration and qualification differences between doctors at medical tourism facilities and those who work at all the other medical facilities, they would be held to the same professional requirements.

In a statement following the ruling, Dr Yaron Rado, Chief Radiologist and Chairman of the Doctors Hospital Board, welcomed the judgment. He said the judicial review had succeeded in securing crucial developments for the healthcare sector.

“The Grand Court has… recommended that the legislature considers the need to amend the wording of the Health Practice Law and Regulations to make matters crystal clear in this important area of patient safety,” Dr Rado stated.

He said that as a result of the legal challenge, all doctors must now meet the same high standards before they are approved to practice in the Cayman Islands “and before they may hold themselves out as specialists in a particular field”.