A stakeholder account – Dentistry Magazine
Published in the Dentistry Magazine 17.03.11 www.dentistry.co.uk
One of the most frequent causes of disputes when one dentist leaves a practice is how to deal with any remedial treatment that may be needed after the departure. We often find ourselves instructed by either the leaving party or the remaining party in these circumstances. Is there a good way to prevent this happening or to at least minimise the risk?
We always advise practitioners that the best way to avoid these problems is by reaching a sensible written agreement (ideally as part of a contract) about how remedial treatment should be dealt with in advance of the departure. Indeed, ideally, it should be part of the written contract between the dentists which is agreed at the outset of their business relationship.
We suggest the contract should provide for an agreed sum of money to be held by the practice or a neutral third party in a ‘stakeholder account’ on the departure of a dentist and for that money to be used to meet the costs of any remedial treatment that might be needed. By this means, the dentist providing the remedial treatment is not out of pocket and so has no reason to be aggrieved. The patients receiving any remedial treatment do not have to pay for it and so have less reason to be aggrieved. The dentist leaving the money in the stakeholder account has the security of knowing that if any of the work they have provided does require to be repaired or redone, then this is much less likely to cause resentment.
Clearly the agreement should also provide for the balance of monies in the stakeholder account to be paid out to the departed dentist after a stated period of time and for all monies deducted from it to be accounted for.
We have seen many examples of this arrangement working successfully in practice. Unfortunately, we have also seen many situations in which an arrangement of this type does not exist, and the remaining dentist and sometimes their patients, have become very frustrated and discontent with their position; resulting in complaints, litigation and sometimes referrals to the General Dental Council.
Dentists should always consider asking their advisers to provide a ‘stakeholder account provision’ in their written contracts –a good safeguard for the future.
Chris Morris is a partner at Hempsons and Head of the Dental Team. He first qualified as a dentist and spent several years’ in general dental practice before retraining as a solicitor with Hempsons almost 20 years ago. Chris specialises in all aspects of dental law acting for defence organisations, dental institutions and many individual practitioners. He is current President of the Dental Law & Ethics Forum.