GP Partnership Law – Legal Advice and Legal Representation
General Practioner (GP) Partnerships Law is a specialist area within UK Partnership Law that requires careful consideration and an appropriate contractual document (partnership agreement or deed) that records the roles and responsibilities of all GPs concerned, the earnings and shares of profit or equity and income, and what will happen should things do not work out. Where a GP partner is a salaried partner, employment law rather than partnership law is likely to be more relevant to the way the practice conducts itself in relation to the employed doctor. We discuss partnership arrangements in this article.
Sadly, GP Partnership arrangements do sometimes breakdown or go through a period of instability because of an under-performing partner, the death or retirement of a partner, or for some other significant reason. Where a patner is an employed partner and they run into difficulties with their partnership or they cause emploment law headaches for the equity partners, a while raft of additional employment law considerations may come into play. The long term consequences of any of these occurences can, if not quickly remedied, be detrimental to the general wellbeing and long term commercial viability of a GP Practice. On occasions an exit strategy will be agreed between a GP Practice and one of the partners, to enable . Documents may well need to draft formal agreements, which evidence the arrangement that has been agreed, which details any pay off that is agreed or offered by way of settlement or compromise, in order to raise the chances of having some certainty and finality to the proposed arrangement.
GP Practices who enter into new partnership arrangements are likely to want legal advice and a written partnership agreement, in order to provide reassurance and some level of clarity about the roles and responsibilities and remuneration of each partner, and the basis and terms for exit from the agreement / partnership. Written partnership agreements can provide an element of security for all of the partners where a dispute arises. Doctors Defence Service lawyers can advise doctors on partnership law, the drafting of contractual documents, salaried partnership employment law, and on the steps that might be taken in order to resolve a dispute in a cost effective manner. The BMA has specifically recommended that GP partnerships are formed using appropriate GP partnership deeds. We can provide advice and guidance on the formulation of such deeds, and the interpretation of partnerhsip deeds that are already in use. A modern partnership deed will offer greater protections than relying on statutory law. A partnership should seek to avoid entering into a partnership at will – as this could mean that any of the partners could force the partnership to be dissolved at short notice. Where there is no partnership agreement in place the Partnership Act 1890 will apply, which offers little security overall to General Practitioners.
Commercial decisions (based on a careful risk assessment) will often have to be made by the partners or senior partners about a step that needs to be taken to preserve the economic wellbeing of the GP business.
There may also be complications in valuing the ‘good will’ of the business, when a partnership is dissolved or new partners are brought in when others retire. The nature of goodwill was explored in the case of Deacon v Yaseen [2020] EWHC 465 (Ch). It is not an easy task to value good will.
In drafting a partnership deed there are a number of factors that one needs to consider, including the impact of the Equality Act 2010. The Act will remain relevant when determining partnership rights, and when decisions are made to exit a partner.
When exiting a partner who is in their probationary period the individual may be able to sue if they can prove that a decision has been based on discrimination. A careful process neeeds to be adopted to operate in accordance with any clauses in the partnership deed, including making accurate notes of progress or a lack of progress of the probationer. Sometimes probationary partners are seen to be too independent, making judgements that should be discussed with the other partners, or otherwise taking actions that undermine the GP practice’s standing or viability – with or wthout intent to do so.
Where confidence has been lost in a probationary partner, or they undermine the GP practice in such a way that a future relationship would be complex and burdensome, it may be necessary to bring on board other partners before removing under-performing partners, so as to preserve the status of the pattnership, which requires a minimum of two partners to remain a partnership. However, a regular change of partners will be a concern to CQC, the CCG and others, and could undermine the reputation of the GP practice.
Where GP partnerships have employment law insurance protection, there may on occasions be a tension bewteen the advice being given by the insurer or the insurer’s lawyers (“to play it safe” – which in reality often means do nothing to put the insurer at risk of a claim, which may invalidate the policy if the GP partnership takes a different view) and the risk to the business as a whole because of the financial drain a salaried partner is making on the partnership, perhaps due to longterm sickness absence or resistance to a change of working arrangements.
Valley View Health Centre (a firm) & Ors v NHS Property Services Ltd [2020] EWHC 3395 (Ch) – The court refused to offer declarative relief sought by several GP partnerships against NHS property services, relating to service charges, following the statutory transfer of property used by the practices. The NHS sought to claim a higher amount than the GP practices had calculated was due. (December 2020)
Further litigation over service charges in: Valley View Health Centre (a firm) & Ors v NHS Property Services Ltd [2022] EWHC 1393 (Ch) – claimants claims were dismissed. Postscript guidance from court:
“Postscript
628. I add two points by way of postscript, which I hope will be of some assistance to the parties and to other GP practices concerned about service charges.
629. There has been some reference to these five actions as test cases for other disputes over service charges which may arise between the Defendant and other GP practices. While I express the hope that this judgment will assist the Defendant and other GP practices in resolving disputes over services charges without the need for expensive litigation, I would be wary of classifying these five actions as test cases. As this lengthy judgment demonstrates, and as I have already said in this judgment, the resolution of a service charge dispute in any particular case essentially depends upon the evidence and arguments in that case. This is one of the principal reasons why, for reasons which I have endeavoured to explain in making my decision on whether the Charging Policy Declarations should be made, 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. 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.
630. Finally, some of the Claimants’ evidence and argument before me in Trial 1 was concerned with what was characterised as an “inter-NHS funding gap”, created by the move to full service charge recovery instigated by the Defendant. This judgment is concerned with the determination of private law rights and obligations existing between the Defendant and the Claimants, in their respective capacities as landlord and tenant. As I have said, if and in so far as an “inter-NHS funding gap” exists, the existence of that gap does not, without considerably more, have any effect on the private law rights and obligations existing between the Defendant and any particular GP practice. Equally, the question of the extent of the financial support which GP practices should or should not receive with items such as rent and service charges is a political question which is not the business of this court.”
(June 2022)
R (Haffiz) v (1) NHS Litigation Authority, (2) NHS England (2020) – NHS England had terminated a contract for medical services of a GP practice due to a failure to make improvements as set out in three remedial notices. The court concluded that the defendants were entitled to terminate the contract, on the evidence. (December 2020)
If you are a GP who would like confidential advice about the interpretation of a GP partnership agreement or employment law related to salaried partnerships, or you are a doctor who wishes to enter into or exit a GP practice partnership arrangement, then contact Doctors Defence Service in confidence for legal advice and assistance, on: 0800 10 88 739
See our Employment Law pages.
See also our Performers List Law page.