A partnership dispute will never happen to us… will it?
Justin Cumberlege, a partner in the healthcare law firm Hempsons, specialises in advising GPs. Here he considers partnership disputes and how to avoid them
Published in Practice Management 22 November 2019
Unfortunately, partnership disputes do arise. When they do, they are time-consuming, expensive, stressful, emotional and destabilising for a practice and the individual partners.
Why do disputes arise?
Partnership disputes arise can for a whole range of reasons, but commonly we come across five main causes of dispute in GP partnerships.
The downward pressure on income, the increase in the value of premises resulting in new partners being put off, pay out provisions for retiring partners and the additional cost burden from increased regulatory and administrative requirements all conspire to place pressure on the profitability of a practice. That is when partners start looking to cut costs, which may impact on the partners in different ways, causing objections to changes, like making staff redundant.
Long-term illness is a perhaps surprising basis for a dispute. This often causes real distress and difficulty as partners want to treat a sick colleague fairly. While a contribution to locum costs is paid through the GMS contract, it still leaves a heavy burden on the other partners, who end up working even longer hours. This leads to a wish to force the sick partner to reduce their profit share and eventually to retire, so more resources can be paid for.
Often it is difficult to identify exactly what a partner is doing wrong, or not doing, while there is a sense that they are not ‘pulling their weight’ or that they are difficult to work with. Maybe they are upsetting staff by being over-demanding or critical. Occasionally, a partner may go far enough to cause a substantial breach of their professional duties; but frequently this is not the case and warnings are often ignored or result in worse behaviour.
Strategic change within the partnership
Should we put time and resources into taking a lead role in the Primary Care Network? Should we merge? Shall we move to or develop new premises? These and other questions will lead to many discussions and could lead to disagreements. Partners nearing retirement tend to be more reluctant to enter into a risky scheme, and incur costs, while younger partners may see their future in taking such an opportunity.
A partnership agreement may address some of these issues, particularly if it has a no-fault retirement clause. At the least it should have a staged dispute resolution provision, so that disputes are settled at the earliest stage possible through amicable negotiation, particularly if it provides for an independent professional with the required expertise to be involved. If your practice does not have a partnership deed, the investment in putting one in place which truly reflects the way the practice operates, and the partners would want issues resolved (as opposed to a generic off-the-shelf agreement) will pay back many times if it avoids a dispute.
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