The application for judicial review of the Minister’s reassessment of Dr. Searles’ billings to the Alberta Healthcare Insurance Plan was allowed, as the procedure followed violated the principles of natural justice and procedural fairness.

Administrative law – Physicians and surgeons – Billing matters – Investigations – Decisions of administrative tribunals – Ministerial orders – Judicial review – Procedural requirements and fairness – Natural justice

Searles v. Alberta (Health and Wellness), [2008] AJ No. 573, Alberta Court of Queen’s Bench, May 23, 2008, B.R. Burrows J.

Searles sought judicial review of the decision of the Minister of Alberta Health and Wellness that found he had inappropriately billed for his services and had been overpaid $985,777.09. He based his application on the ground that the Minister’s Delegate had inappropriately consulted with the individual gathering the case against him and that this violated the principle of natural justice and procedural fairness. On June 3, 2002, a Billings Review Officer with Alberta Health and Wellness raised concerns with respect to Dr. Searles’ billings. Over the next two years, this individual reviewed the files of Dr. Searles’ in detail and gathered evidence to support the allegation of over billing. This material was forwarded to the Peer Review Committee, which accepted the conclusions of the initial investigator. Dr. Searles applied for a reassessment which was undertaken by the Minister’s Delegate. Both the initial investigator and Dr. Searles provided Submissions. At a later date, Dr. Searles made Written Interrogatories of the Minister, which responses confirmed that the Minister’s Delegate had contacted the initial Investigator on several occasions ex parte, and Dr. Searles was not advised of these communications, nor given the opportunity to respond.

The Court noted that several factors can affect the content of the duty of fairness as it applies in a given context: Baker v. Canada (Minister of Citizenship and Immigration), [1999] 2 SCR 817:

1. The nature of the decision being made and the process followed in making it;
2. The nature of the Statutory scheme and the terms of the Statute pursuant to which the body operates;
3. The importance of the decision to the individual or individuals affected;
4. The legitimate expectations of the person challenging the decision; and
5. The procedural choices made by the deciding Agency.

In this case, the Statute said very little about the procedure the Minister was to employ in carrying out the reassessment function, other than to suggest certain standards of practice for comparison. There was no expressed Statutory requirement that the physician whose billings were being reviewed be advised of the information that either the Minister or the Committee gathers in a reassessment, or that he be given an opportunity to make submissions to either the Minister or the Committee, or even be notified that a reassessment process had been initiated.

The Court noted that the nature of the reassessment decision was the function of the Minister to promote the objectives of protecting the integrity of the Healthcare Insurance system and maintaining the confidence of both the public and the medical profession in that system. The Court held that, if those ends are to be achieved, the Minister’s reassessment decision must be fair and the process which leads to it must be one that reasonable people will recognize to be fair. The Court noted that the presence of a right of appeal did not necessarily reduce the duty of the decision maker to employ fair procedures. It was further held that the amount at stake, and the fact that an Order could deprive Dr. Searles of his ability to earn a livelihood in the future, meant that the decision was of sufficient importance to Dr. Searles to require the Minister to employ procedural fairness in reaching it. The Court concluded that Dr. Searles had a legitimate expectation of procedural fairness, and, in light of all the factors considered, held that the Minister was not free to entirely ignore the principles of natural justice and procedural fairness in making a reassessment decision.

The Court accepted Dr. Searles’ submission that the Minister’s duty of procedural fairness was violated by the initial Investigator’s participation in the process. The initial Investigator had, in essence, performed the function of prosecutor, and for her to have ex parte communications with the Minister’s Delegate was inappropriate. Further, the Minister’s Delegate assigned the task of writing the ultimate decision to the initial Investigator, and this was a violation of procedural fairness not authorized by the Statute. In these circumstances, a reasonable apprehension of bias arises. In the result, the appeal was allowed and the Notice of Reassessment was set aside.

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