Practices have lost a landmark legal battle over charges levied by an NHS landlord, it has been revealed.

Practices have been refusing to pay service charges levied by NHS Property Services and had mounted a legal challenge against the agency.

They claim that charges have been frequently miscalculated and also disputed the nature of their tenancy with the property services agency.

Last week a judge ruled against five practices who were backed by the British Medical Association, ordering them to agree a payment for outstanding fees.

The agency believes it is owed about £175 million by practices, the Health Service Journal reported.

The five practices in the case owe up to £1.3 million between them but a second court hearing will determine a “reasonable” amount they must pay to the agency.

Speaking to the Journal, the agency’s chief executive Martin Steele said: “The simple fact is we must recover legitimate costs associated with the services we provide to the GP community. I think this ruling brings a level of clarity that everyone needed.

“Historically, there have been issues where we may have charged for services incorrectly, but our billing process is now much more robust than it has been. We are not in the game of trying to charge customers for things they haven’t had, and we know we’ve made some mistakes and when they’re pointed out we’ll correct them.”

Dr Gaurav Gupta, premises lead at the BMA, said there had been significant reductions in the amount the agency was claiming from practices.

He said: “Had the BMA not supported the GP practices in this case to defend NHSPS’ claims for charges they could have overpaid hundreds of thousands of pounds to NHSPS which NHSPS was unable to substantiate when required to do so.”

In his judgement, the judge said: “I do not think that it is sensible for any GP practice to adopt what I would describe as a policy of non-engagement; by which I mean refusing to pay service charges pending explanation of the position by the Defendant (NHS Property Services).

“As I have said, it seems to me that a more constructive approach would be for GP practices to take their own advice on the position, and to put their particular case to the Defendant on what is and is not recoverable by way of service charges.”