What are the legal implications of recent changes to the SFE?
Most GP practices will be aware of the recent changes to the Statement of Financial Entitlements (SFE), which came into force on 1 April 2017.
Since the revised SFE provides for both new income streams and changes to existing potential income streams, decisions need to be made as to how this additional income is to be allocated. These rules, once agreed, then need to be correctly documented.
We’ve highlighted below some of the key changes and what you need to consider from a legal perspective:
Reimbursement of CQC Fees
A system of direct reimbursement will be introduced whereby practices can submit their paid invoices to NHS England, or their CCG (under delegated commissioning) and will receive full reimbursement of the amount paid.
However, this raises two potential issues. Firstly, the practice has to pay the fees before it can claim a refund. Secondly, and perhaps more importantly, there is an assumption that the contractor is the CQC registered provider. This will usually be the case for GMS practices but arguably is not normally the case for PMS practices. This could be a source of dispute in due course.
Reimbursement of Indemnity insurance costs
Funds have been allocated to cover rising indemnity insurance costs. This money will be paid to practices on a per patient basis, but the intention is that the monies should go to whoever is paying the insurance premiums.
If practices pay for the PI cover for all their staff, they should keep the monies and share as they see fit. Normally, this would be between the partners in profit sharing ratios.
However, the situation is different if any GPs working at the practice pay for their own PI cover. The practice must then reimburse an appropriate proportion of that individual’s PI cover cost.
Depending on your circumstances, this could necessitate changes to your Partnership Agreement, employment contracts, and locum contracts.
Changes to GP retention Scheme
Improvements have been made to the GP retention scheme, whereby GPs who are planning on retiring (or who meet certain other criteria) are able to apply for retention monies as an incentive to stay in general practice.
If successful, these monies will be paid to the practice and partners will need to agree how the monies are to be shared. Normally, the individual will expect to take these monies as a prior share, but unless this is clearly agreed by all the partners, the default would be that the monies are shared in profit sharing ratios.
Changes to sickness absence payments
Changes have also been made in relation to sickness absence payments, which can be made for both locums (as previously) and now for the practice’s GPs covering each other. This seems a sensible change which may be helpful for many practices.
However, this scenario is often not contemplated in partnership agreements so could give rise to debate and conflict over how to fairly allocate the additional income.
Our recommendations
We recommend that you consider the changes and assess their impact on your current processes. If there are any necessary changes (which we would expect there to be) you will need to review your existing partnership agreement and potentially your salaried GP contracts and locum contracts, to check they reflect what you have agreed.
Remember, if you don’t have a partnership agreement in place, or it is lacking in detail with regards to specific issues, then the legal position by default will be that everything is shared in established profit sharing ratios.
As an aside, while the SFE applies to GMS contracts by default, it will only apply to PMS contracts where the contract specifically states this. If you are in any doubt, you should check your PMS contract.
For more information about the impact of these changes, or any other enquiries, please contact Daphne Robertson on 01483 511555 or email d.robertson@drsolicitors.com
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Why is a partnership offer letter so important?
Taking on a new partner is a significant step for any GP practice, and it is important to get it right from the outset.
Once a new Partner has been selected, a partnership offer letter should be next on the agenda.
Why do you need one?
The letter will act as written confirmation of the key terms of the appointment. By properly documenting and setting out the terms in this way, the offer letter can provide some protection for the Partnership until the Partnership Deed is updated, and reduces the risk of dispute over the offered terms.
What about the partnership deed?
The admission of a partner is something that needs to be dealt with within a partnership deed as soon as possible once your offer has been accepted.
Practices often find difficulty in updating the Partnership Deed before the start date, which makes the offer letter even more vital, as it will act as a holding agreement until the Deed is resigned.
There is a misconception that a partnership deed shouldn’t be updated until after an incoming Partner has completed their probation period. This approach is not advisable for a number of reasons and ultimately you can end up as a partnership at will which can put your contract at risk.
What should the offer letter cover?
The offer letter needs to be consistent with the existing arrangements that are set out in the existing partnership deed. The key things it should include, are:
- Commencement date
- Offer of partnership – clearly stating that the position is self-employed
- Notifications – confirming that notifications will be given to NHS England & CQC once the offer if accepted
- Sessions – outlining in detail the sessions that are expected to be covered
- Partnership share – explaining how earnings will be worked out
- Working capital – detailing any working capital contribution that is expected
- Surgery premises – attaching a copy of the surgery lease and outlining there will be shared liability for the lease terms, including the rent. If there is to be a commitment to buy into the surgery premises, this should also be stated
- Mutual assessment period – detailing any probation period and what it will entail, including notice periods Annual Leave entitlement
- Administrative requirements – stating that proof of identity and qualifications, eligibility to work in the UK and an up to date CRB check will all be needed prior to the partnership commencing
- Acceptance – the time frame within which the offer must be accepted
- Partnership Deed – a copy of the Partnership Deed, the terms of which they must consent
Our recommendations
Make sure your offer letter is clear and sets out all the key points; it should be signed by one or more of the current Partners and have place for the new recruit to sign by way of acceptance of the terms.
You then need to get the partnership deed updated as quickly as possible, and preferably ahead of the new partner starting.
As with any contracts and partnership issues, it is always advisable to seek the support of an experienced legal team, who can ensure you put yourself in the strongest possible position.
For more information about employment contracts and any other related issues, please contact Daphne Robertson on 01483 511555 or email d.robertson@drsolicitors.com
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What is the BMA model contract and does it apply to me?
The BMA model contract was introduced in 2004 to try and ensure a common standard for GPs employed by practices and those employed by PCOs. The PCOs have since become CCGs and NHS England, and they no longer employ significant numbers of GPs. Nonetheless, the BMA Model Contract has endured. All practices which it applies to must offer their salaried GPs the BMA model employment contract, or ‘terms no less favourable’.
Over the last 10 years the profile of the profession has changed drastically. There are now many more salaried GPs than ever before and most of them should probably be on BMA model contracts or similar.
Who does it apply to?
It is an express term of all GMS Contracts that the GMS Practice must offer their salaried GPs BMA model contracts or terms no less favourable.
The definition of a salaried GP includes:
- Salaried GP who undertakes special interest work (a GPwSI)
- Assistant
- Associate
- GP retainee
- Flexible Career Scheme GP
- Returner scheme GP
- Salaried GP employed to work out-of-hours.
PMS and APMS practices
The position for PMS and APMS practices is more complex. The NHS England Standard PMS Agreement 2015/16 contains the same requirement as GMS, but most PMS practices hold different, older contracts.
The original intention was that PMS would be locally negotiated. Some local commissioners included a clause requiring BMA Model Contracts in their PMS contracts, whilst others did not.
The only way to be sure is to read your PMS or APMS Contract – something very few practices ever do.
Is it a standard template?
The BMA model contract is a downloadable template document, but it doesn’t have to be used in its exact form. The phrase ‘no less favourable’ means it can be varied and negotiated. The employee and employer might agree to change some of the terms, perhaps trading some leave for pay and so on. In the end it is up to the parties to decide whether they regard a change to the model as a favourable one or not.
We generally advise practices to carefully consider the wording of the contract rather than simply adopting it wholesale. There are some important employer protections which are found in most other employment contracts and which are not in the BMA Model. Also, you will probably want to ensure that your salaried GPs are not on radically different terms to your other clinical and possibly also non clinical employees.
What if you get it wrong?
If the requirement is in your GMS/PMS/APMS contract and you employ salaried GPs on terms which are less favourable than the BMA model contract, then you are in contractual breach. If NHS England become aware of this, they will almost certainly issue the practice with a ‘Remediation Notice’. This will require you to rectify the situation within a given timescale and sanctions could also be imposed. If 2 or more breach or remediation notices are issued NHS England would be entitled to consider termination of the contract.
Recommendations
If you are a GMS Contract and are not offering the BMA Model Contract or terms no less favourable, you should consider taking steps to rectify the situation.
If you are a PMS or APMS practice then your first step should be to check your NHS E contract to see if the BMA model applies.
Aim to have an open discussion with the person you’re looking to employ, to negotiate the terms that will be most favourable for both parties. You need to find a positive balance between the best interests of the practice and the individual. Just remember that overall, the terms and conditions must be deemed ‘no less favourable’ than those set out in the BMA model contract.
In general this is a surprisingly tricky area of law, and something which both employer and employee can get very exercised about. If you’re at all unsure about your situation, then always seek the advice of an experienced legal team who will be able to assist you.
For more information about employment contracts, any other related issues, please contact Daphne Robertson on 01483 511555 or email d.robertson@drsolicitors.com
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Dealing with property in a GP practice merger
There is a lot to think about when merging practices. Issues include transfer of staff by TUPE, creating joint accounts, agreeing profit shares, drafting a new Partnership Agreement, aligning ways of working, dealing with the CQC and NHS England, and more.
With so much to think about and with limited time and resources, merging practices are often tempted to put the properties to one side to be dealt with later. In this post we explain why it’s best to have a plan for managing property issues from the outset.
But nothing is going to change?
We are often told that the surgeries will ‘just stay as they are’, or that their ownership can be kept outside of the new partnership. However, it’s not that simple and by taking no action you risk hitting problems later.
A merger involves changing business vehicles. Generally speaking, two or more partnerships become a new, single partnership and most of the legacy business vehicles disappear. Each of the legacy partnerships would have had rights of occupation in their surgery, whether as tenant, licensee, owner occupier, or some combination of all these. Post merger, even if exactly the same partners and staff are working in each building, the occupier will be the new merged partnership.
The consequences of this are significant. Regardless of who has their name on the title at the Land Registry and whether the surgery is freehold or leasehold, the new partnership will acquire rights and obligations associated with the building from the very first day post merger. Examples can include; rights of occupancy; tax liabilities; problems with NHS premises funding; implications for mortgage financing; breaches of covenants, and; unexpected changes in value.
Such problems typically lie ‘dormant’ for some time, before emerging and creating a crisis. When this happens and has the inevitable financial consequences, the partners who were around at the time of the merger may be long gone and it becomes difficult to attribute the resultant costs.
Some questions you need to consider:
- How are the premises currently owned and occupied?
- How will they be owned and occupied following the merger?
- Will any premises be closing and if so, what are the implications?
- Do you need to seek prior approval from NHS England for changes in occupancy/use? (see our article Don’t put your premises funding at risk)
- How are the new owners/occupiers going to be tied into any leasehold obligations?
- How will the changes impact on any mortgage financing and do you need mortgagor consent?
- Do you need to obtain landlord’s consent?
- Is there an impact on the amount of premises funding?
- Tax impacts, such as, stamp duty land tax (SDLT), capital gains tax)
Our recommendations
Our advice is to do your homework in plenty of time before the merger and ensure you undertake appropriate due diligence on all the properties involved. Once you understand the implications of the proposed changes you can consider your options for mitigating the problems. Doing nothing is certainly an option, but it is unlikely to be the best one.
Remember that the Surgery is almost always the most valuable asset in a GP Practice. It therefore pays to get professional advice to protect it and maximise its value.
For more information about practice mergers, property, or any other enquiries, please contact Daphne Robertson on 01483 511555 or email d.robertson@drsolicitors.com Â
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Can your patient list be ‘open but full’?
From funding cuts, to an aging population and the increasing demands being placed on primary care services, GP practices face ever increasing pressure.
Balancing growing patient numbers with resource constraints can prove a challenge and may lead some practices to consider restricting the growth of their patient list.
Can such a move ever be justified and what could the potential implications be?
The regulations
Current regulations specify that a GP practice must provide:
- Essential services to all registered patients and temporary residents
- Primary medical services for an accident or emergency situation happening in the practice area within core working hours
- Immediate treatment when necessary of any person whose application for inclusion on the patient list has been refused but who is not yet registered with another provider
For an individual to apply to join your patient list, they must live within the practice area, or be entitled to seek acceptance as a temporary resident.
A practice with an open patient list may only refuse an application to join their list if they have ‘reasonable grounds’ for doing so.
Capping a list
Much of the discussion around refusing to register patients focuses on the definition of reasonable grounds. The rules are clear that the following would not be reasonable grounds to refuse: age; appearance; disability or medical condition; gender or gender reassignment; marriage or civil partnership; pregnancy or maternity; race; religion or belief; sexual orientation; or social class.
Examples provided which might be reasonable grounds for refusal include an applicant living in the outer boundary area, or if they have previously been removed from the list – particularly if this was because of a history of violence.
This obviously leaves some uncertainty around the reasonableness of other possible grounds, and some commentators have suggested that staffing shortages and resource constraints would be sufficient grounds to refuse all new applications. This is sometimes known as ‘open but full’ or ‘list capping’.
To informally cap a list by refusing to register new patients, your reason for doing so must be extremely serious. For example, if a practice strongly believes that registering more patients will overstretch its ability to provide the necessary services, it may be arguable that patient safety is at risk. This situation could, in theory, justify a short-term list closure but a practice would be well advised to further justify their decision with some analysis of the risk.
However, should you routinely start refusing to register new patients then you may find yourself on shaky ground. You will need to show you are actively working on a solution, such as seeking help or getting in additional resources, and doing all you can to resolve the problem.
Closing a list
If the problems you are facing are very severe and no short-term solution looks likely, then a formal closure of the list should be pursued. To do so, you would need to make an application to NHSE for their approval to close it for a period of between 3 and 12 months.
Such applications should never be entered into lightly. They require a great amount of detail to be supplied about the difficulties being experienced in delivering services, the help that NHSE may be able to give to alleviate those difficulties and also any discussions that have been had with existing patients.
The regulations do not spell out the exact grounds on which the closure of a list may be justified, but in these difficult times NHS England will likely seek to rigorously challenge your application.
In summary
A practice may potentially justify what amounts to an informal list closure without applying for a formal list closure, if the circumstances are deemed serious enough – such as putting patient safety at risk – and if the problem is perceived as short-term.
However, capping a patient list should only ever be seen as an extreme and temporary measure, as otherwise the list closure process should be followed.
If you’re at all concerned, we would generally recommend you contact your LMC in the first instance to discuss the problems you are facing and see what help and support is available to you.
For more information about practice management, or any other enquiries, please contact Nils Christiansen on 01483 511555 or email n.christiansen@drsolicitors.com Â
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Should your surgery building be held as a partnership asset?
A surgery building is one of the most valuable assets a GP practice may own, so it is important to understand the implications of how it is held. Partners need to be clear whether their property is held as a partnership asset or not. The answer can have significant implications in relation to ownership rights and obligations, occupancy and even tax.
The nature of partnership assets is complex, but we have summarised some of the main features of holding the building inside and outside the partnership:
1. When the surgery building is held by the partnership
As a partnership has no ‘legal personality’ it cannot hold property in its own name. Partnership property, therefore, has to be held on trust.
If a surgery is held as a partnership asset the legal owner(s), who are generally those named at the Land Registry, hold the surgery on trust for the ‘beneficial owners’ who are all the partners in the partnership. There is often reference in GP partnerships to ‘owning partners’ and ‘non-owning partners’, but the starting point in law is that all partners are equal owning partners unless there is evidence that something else has been agreed.
It is of course very commonly the case that some partners have a greater interest in the surgery than others, or that some partners have no ownership interest at all, but if the surgery is a partnership asset this will need to be stated. This means it is critical that all rights and entitlements in the building are documented. Otherwise, there is likely to be scope for confusion and disputes over your most valuable asset.
2. When the surgery building is held outside the partnership
If the building is held outside of the GP partnership, then it is generally much clearer who owns it.
The ‘legal owners’ named at the Land Registry will normally have full ownership rights and be entitled to make decisions such as when to sell or develop it, and be entitled to rent from the partnership occupying it.
However, in this scenario clarity needs to be given over the basis on which the partnership is occupying the building. This could, for example, be via a lease, a licence, or documented in the partnership agreement. Without this being documented, non-owning partners are potentially vulnerable.
Our recommendations
1. Know where you stand
It is essential that all partners understand if the property is held as a partnership asset or not. This should normally be clear from the partnership agreement and supported by the accounts.
2. Check how things have been documented
Next, you need to check that suitable documentation is in place. This should cover the ownership and occupancy of the property. It is always advisable to seek the advice of an experienced legal team here, to ensure all documentation is fit for purpose and up to date.
3. Understand how the situation can change
Finally, be aware that there are situations where a surgery building may ‘accidentally’ move in and out of a partnership. This can have very significant implications, such as for NHS Premises Funding and for Stamp Duty Land Tax. (For more details on this topic, see Are you liable for a ‘hidden retirement tax’?)
When it comes to property owned by a GP partnership, sadly it’s not as straightforward as simply having your name on the deeds. It is a complex area of law and having the right documentation in place is crucial, if you’re to guard against potential disputes in the future.
For more information about partnership deeds and assets, or any other related issue, please contact Daphne Robertson on 01483 511555 or email d.robertson@drsolicitors.com
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Managing conflicts of interest when you’re an officer of a GP federation
As GP federations have become more established, we are receiving an increasing number of enquiries about the role of the federation’s officers.
Most GP federations are organised as limited companies, with shares owned by the member practices. The role of the federation is generally to secure and manage healthcare contracts for their area, which will typically be delivered by some or all of the member practices.
Like any other limited company, a federation and its activity will be overseen by a board of directors. These officers will be governed by certain statutory and fiduciary responsibilities, which will guide how they need to act in relation to the federation and its member practices.
Where it gets complicated is that the directors of a GP federation are typically also partners in a member practice, as well as shareholders in the GP federation. Each officer, therefore, needs to fulfil a number of roles at any one time, each of which carries its own legal and contractual obligations, and sometimes these may conflict.
Another consideration is tax. With income from the different roles being taxed in different ways, it is important to be able to demonstrate that money flows are based on the needs and obligations of the role, not as a way to avoid tax.
Responsibilities of a Director
Company Directors are the agents appointed to act on a company’s behalf, and have statutory responsibilities to act in the best interests of the company as a whole. The statutory responsibilities of a director are set out in the Companies Act 2006, and it is important that all directors are familiar with these. Some of the key points are to remember that a director must act within the powers delegated to them, must do so with reasonable skill and diligence and must avoid conflicts of interest. The bar is not set especially high, but directors should be aware that failure to meet these obligations can result in a variety of sanctions against them personally. Other responsibilities of the directors may be set out in the company’s Articles or in an agreement between the shareholders. Directors of a limited company are employees and are paid through the payroll, and if a GP federation is trading the directors will need to commit some time to it in order to fulfil their responsibilities.
Responsibilities of a Shareholder
The shareholders are the owners of the GP federation and will usually have committed some of their own capital to the business. Shareholders should provide strategic control over the company and guidance to the directors. The shareholders act through General Meetings, and have a small number of statutory powers such as removing directors and changing the name of the company. Any other powers retained by the shareholders are normally set out either in the Articles of the company or in a shareholders agreement. These documents are particularly important where the shareholders and directors are not identical. Since the ‘real’ shareholders of a GP federation are normally all the partners in the underlying practices (rather than the ‘nominee’ shareholder on the share register), it is rare for a GP federation to have identical ‘real’ shareholders and directors. It is important that all the partners understand their role as shareholders, and have a mechanism in place for the nominee shareholder to vote on their behalf. This mechanism is usually set out in a ‘deed of trust’ between the partners in a practice, or within their partnership agreement. Shareholders are not ‘paid’ for any work they do, but they may receive income through dividends on the share(s) they hold.
Responsibilities of a Partner
The responsibilities of partners are as set out in their partnership agreement and the Partnership Act 1890. These can generally be summarised as acting in good faith towards each other and in the overall best interests of the partnership. This means that a partner who is also a director of a GP federation must act in the best interests of BOTH the partnership and the GP federation. Partners are self employed for all income earned through the partnership.
There can be times when these obligations do not align, which opens the door for conflicts of interest to arise.
Conflicts of Interest
Take the example of a GP federation director who is also a partner in a member practice. If a contract is won by the federation to provide a joint service it may be in the interest of the partner’s practice for them to deliver the service, as they would be paid for doing so. However, another member practice may be better equipped to deliver the service or be able to do so more cost effectively. Who should get the work?
Alternatively, a director may find that it is more tax advantageous to be paid as a partner in the member practice, or indeed as a shareholder taking dividends. How should they account for their time spent meeting their obligations as a company director?
Putting steps in place to protect yourself
For any officer, being able to clearly demonstrate how a decision was reached and why you behaved in a particular way is key to managing potential conflicts of interest.
There are steps you can take to do this, including:
- Shareholders’ agreement – this should specify which decisions are to be retained by the shareholders, the terms under which dividends are to be paid, and the mechanisms by which shareholders reach agreement
- Company Articles – these should be checked to ensure they are consistent with the shareholders agreement, as well as any NHS Regulatory requirements
- Directors’ service agreement – each director should have a service agreement describing their role, responsibilities and remuneration
- Partnership agreement/deed of trust – in addition to setting out the ‘normal’ responsibilities in a GP partnership, these documents should explain the role of the nominee shareholder and contemplate the potential conflicts of a GP federation director.
- Minutes – Minutes should be kept of practice partnership meetings, company shareholder general meetings, and GP federation board meetings
Due to the nature of a GP federation, conflicts of interests are almost inevitable. Your best protection will be to understand what each role entails including its statutory and contractual obligations.
Then, by formally documenting each role and process, you will be able to better justify why things happened as they did. You’ll have a way to explain your actions and the context when a conflict arises.
For more information about GP federations, partnership agreements and any other related issues, please contact Daphne Robertson on 01483 511555 or email d.robertson@drsolicitors.com
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Pensions protection scheme deadline approaches
The start of a new fiscal year is fast approaching and with it comes an important deadline for any GP nearing retirement.
If you’ve built up a healthy pension pot, then Individual Protection 2014 (IP2014) is a scheme that could help you reduce, or avoid, a tax liability on your savings. But with an April 5 2017 deadline, time is running out to apply.
What is IP2014?
The lifetime pension allowance was reduced from £1.5 million to £1.25 million in April 2014, then lowered again in April 2016 to £1 million. Any pension savings above this level are taxed at a significantly increased rate.
Since reducing the lifetime limit could be seen as unfair to those who had already accrued large pension pots, IP2014 was introduced to enable such people to safeguard their pension savings and effectively ‘lock-in’ the higher lifetime savings allowance. However, IP2014 is not an automatic right and must be applied for. We understand that significant numbers of GPs who may benefit from IP2014 protection have not applied. The deadline for applying is 5 April 2017.
Are you affected?
If the total value of your pension benefits exceeded £1.25m as at 5th April 2014 you are potentially able to secure Individual Protection 2014. The calculation to perform is:
(NHS Pension x 20) + Lump Sum + Private Pension Fund Value
The problem is that this calculation requires information on valuations from the NHS Pensions Agency and the demands on their time are currently significant. Fortunately the required information should also be available online, but you would be well advised to check soon if you have not already done so as the tax savings can be significant.
Our recommendations
At DR Solicitors, we believe in always seeking expert advice from specialist advisers. We do not advise on tax or pensions, but we do stay current with all the various regulatory and commercial issues which may affect our clients.
If you are concerned about IP2014 or any other aspect of your pension planning you should always seek the advice of a specialist IFA or accountant who understands the intricacies of the NHS Pension Scheme. We are always happy to make introductions to our extensive network of primary care advisers including specialist accountants, surveyors, banks, IFAs and consultants.
For more information, please contact Nils Christiansen on 01483 511555 or email n.christiansen@drsolicitors.comÂ
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Partnership disputes – the early warning signs
Partnership disputes can be expensive, time consuming and destructive; not to mention unpleasant for all parties involved.
If you find yourself having to deal with a partnership dispute, the best protection for any practice is to have a valid partnership deed in place.
To help you spot the early warning signs of a potential dispute, we have pulled together a list of some of the most common causes of partnership disputes:
- Underperformance: Partnerships are based on the principles of trust and fairness. Negative feelings can start to creep in, if there is a perception that one partner is underperforming. For example, if they are perceived as not pulling their weight, have a lack of attention to practice management responsibilities, or exhibit poor time keeping and organisational skills.
- Money: Financial concerns are one of the most frequent causes of disputes. They can range from arguments over alleged financial impropriety, to non-property owning partners paying for building costs, the sharing of outside earnings, or the profit share to workload ratio.
- Unacceptable behaviour: Disputes can arise when a partner is considered by others to be behaving in an unacceptable way. Examples of this include: bullying, harassment, discrimination, inappropriate use of computer systems (sometimes even during consultations) and self-prescribing.
- Clinical concerns: Every clinician has a professional obligation to report any clinical concerns they may have. By themselves, these issues won’t necessarily lead to a partnership dispute. However, problems can arise when clinical issues are covered up, reveal a lack of insight, or if they put a partner’s GMC registration at risk.
- Personality clash: Personality clashes can fester for years. Such disputes are usually best dealt with through mediation and the LMC can often help in such circumstances. However, successful mediation requires that the partners in conflict demonstrate insight and work on changing their behaviour, which can sometimes be difficult.
- Sickness absence: When a partner is frequently off sick, or takes a long period of sickness absence, this can contribute towards a feeling that they are not ‘pulling their weight’. A locum can be used to backfill but they will not be sharing any of the management workload, which means extra pressure is felt by the remaining partners.
- Generational differences: Generational interests are sometimes not aligned. For example, a partner nearing retirement may be keen to preserve capital and minimise unnecessary change, whilst a younger partner may be keen to invest in new premises or different working patterns. Disputes of this nature can lead to issues with 24 hour retirement planning, or even age discrimination claims.
- Surgery Premises: Incoming partners are showing less interest in buying into surgery premises than they did in the past. They are also often unwilling to sign up to a long lease. This can cause problems for other partners, who may be keen to move on or retire and are unable to divest themselves of the property interest.
Why your partnership deed is important
A well drafted partnership deed can help minimise the disruption caused by a dispute or avoid the dispute altogether. It will seek to anticipate many of the issues mentioned above and provide an agreed framework for resolving them.
For example, it can state grounds for expelling a partner; document the terms of absences from the practice; ensure that all partners have the right to 24 hour retirement; and specify a dispute resolution process. Â Importantly, it can also prevent a partnership from being dissolved in the event of a dispute, as this can put the GMS/PMS contract – and therefore the practice – at risk.
Our recommendations
If you are unlucky enough to find yourself in dispute with your partners, then make sure you seek professional legal advice at an early stage. It is important that you know where you stand legally, so you can avoid doing anything which may compromise your position. Fortunately, most partnership disputes will be settled without the need for litigation. In the meantime, please ensure you have a valid and up to date Partnership Agreement.
For more expert advice, download our free guide: ‘Top 10 tips for dealing with partnership disputes‘.
For more information about Partnership Agreements or disputes, please contact Daphne Robertson on 01483 511555 or email d.robertson@drsolicitors.com
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Dealing with the CQC during a practice merger
Merging your Practice is a major decision and there are many factors that you need to consider before taking the plunge. (For more details, see: When is a GP practice merger not a merger?)