A former NHS trust chief forced out in the wake of Britain’s worst outbreak of the hospital “superbug” infection has lost her court fight for a £175,000 severance payment.

In a case that may raise fresh questions about the multi-million-pound payoffs awarded to Sir Fred Goodwin and other recently departed banking executives, a high court judge has ruled that Rose Gibb’s termination agreement with Maidstone and Tunbridge Wells NHS Trust in Kent was “irrationally generous”.

Ms Gibb was offered the payment in exchange for leaving her job quietly just days before the release of a damning report into the trust’s failure to contain C.difficile outbreaks in 2006, which left 90 people dead.

Following a public outcry, Alan Johnson, the health secretary, intervened to block the payout.

In a highly unusual ruling, Mr Justice Treacy declared that Maidstone and Tunbridge Wells trust had no power to authorise such a hefty severance package, and that the agreement was therefore legally void.

He also found that the “personal views” of non-executive directors who had wanted to be generous towards Ms Gibb had coloured their negotiations.

“The trust, in adopting the approach which it had, paid no more than lip-service to the need not to be seen to reward failure and to regard payments over and above statutory and contractual liabilities as exceptional,” the judge said.

Employment lawyers suggested that the case offered direct parallels with efforts to claw back Sir Fred’s severance package.

The former chief executive of Royal Bank of Scotland has refused to hand back his £700,000-a-year pension in spite of steering the lender to a £24bn loss last year, the biggest in UK corporate history.

Other bankers whose packages have come under fire include Peter Cummings, HBOS’s former head of corporate banking who left when the lender was rescued by Lloyds Banking Group.

Ms Gibb was appointed chief executive of Maidstone and Tunbridge Wells trust in late 2003, on a basic salary of £150,000.

Her tenure, however, came to an abrupt end when the NHS inspectorate found that appalling hygiene standards had caused 90 “superbug” deaths and contributed to a further 240. More than 1,150 people were ultimately infected following a “litany” of safety errors, the Healthcare Commission found.

Ms Gibb, who claims she was made a scapegoat, said the lengthy court battle had been “traumatic” and “highly damaging” for the NHS and that she would take further advice before launching an appeal.

Her trade union, Managers in Partnership, is shouldering her legal costs.

“Rose Gibb was very reluctant to agree to leave like this but she was told she had no choice,” said Jon Restell, MiP’s chief executive. She accepted assurances the payment was properly authorised.

“The fact is Rose Gibb wanted to stay and face the music. The trust’s actions stopped her receiving her employment rights and the public from seeing her held to account in a disciplinary procedure, at the end of which she may have been sacked without a penny.”

Get alerts on UK business & economy when a new story is published

Copyright The Financial Times Limited 2019. All rights reserved.
Reuse this content (opens in new window)

Comments have not been enabled for this article.

Follow the topics in this article