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  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.
If you are a GP who would like confidential advice about the interpretation of a 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 Performance List Law page.