March 14, 2016

Appellate court upholds bylaws aimed at keeping “incentive programs” from eroding professional standards

Administrative Law
Professional Regulation

Bylaws passed by the College of Pharmacists of BC to prohibit pharmacists from making “customer incentive programs” available to patients (e.g., points programs), first struck down in 2014 by a lower court, were recently upheld as reasonable by the BC Court of Appeal in Sobeys.

In October 2014, we described the controversy over incentive programs and blogged about the original judicial review decision here. Sobeys West Inc. (the owner of Safeway) and Jace Holdings Ltd. (the owner of Thrifty Foods) challenged a college bylaw that prohibited pharmacists from participating in incentive programs that gave benefits to pharmacy customers. Ultimately the lower court decided the bylaw was over-broad, harmful to the public interest in its net effect, and therefore unreasonable.

Evidence the lower court should not have looked at: The lower court made its decision, however, based in part on “fresh” evidence that the petitioners filed in the judicial review about the lack of harm caused by incentive programs. The Court of Appeal noted “ample authority” for law in British Columbia that evidence not before the tribunal – in this case, the college’s council – but that could or should have been before it, is not generally admissible in judicial review proceedings. A judicial review is a review of the decision taken, and not an occasion for a new decision based on different evidence. [52] The lower court therefore erred by admitting evidence not directly or indirectly before the college’s council. [53]

When a college bylaw is “reasonable”: The Court of Appeal went on to address the reasonableness of the College’s bylaws, noting first the college’s submission that its duty to act in the “public interest” extended to maintaining high ethical standards and professionalism, but that nothing in the Health Professions Act suggested any duty to ensure that pharmacy services were provided to the public at the lowest price. [57] The Court of Appeal also noted the college’s submission that adoption of bylaws is not a quasi-judicial decision, but one that involves an array of social, economic, political and other non-legal considerations that demand a high degree of deference from courts. [60-61] In that context, the Court of Appeal noted that the burden did not lie on the college to prove that its concerns were justified by facts; rather, the onus lay on the petitioners to show that the bylaw did not meet the reasonableness standard. [65]

Noting the college’s submission that the lower court had applied too high a degree of scrutiny to the college’s concerns, the Court of Appeal agreed that the lower court erred by failing to ask if, given the council’s concerns, the bylaws lay within the range of reasonable measures.

While the evidence supporting the need for the bylaws was “thin” [68], some anecdotal evidence did support the college’s concerns. [70] Furthermore, the college’s council was not required to select the least intrusive path, or await empirical evidence demonstrating the harm of incentive programs. [68] Given also that one other jurisdiction had adopted a prohibition on incentive programs similar to that adopted by the council, the Court of Appeal decided that “it cannot in my view be said that the Council’s decision lay outside the range of ‘possible, acceptable outcomes’….” [70]

The Sobeys decision makes two points clear:

  • First, a judicial review is generally not an opportunity for parties to reargue the merits of a decision based on different evidence.
  • Second, the courts should not too closely scrutinize college decisions to enact bylaws that address “public interest” concerns, especially ones that engage professional expertise. Such bylaws need only be supported by some evidence — even if only “thin” evidence — that puts the response within a range of “possible, acceptable outcomes”.

Sobeys West Inc. v. College of Pharmacists of British Columbia, 2016 BCCA 41

Lisa C. Fong and Michael Ng