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Partnership Splits

Partnership Splits. LMC Secretaries Conference 6 November 2008. Sole Trader Partnership Company Limited. The GMS Contract held between the PCO/HB and the Contractor. Regulation 105 GMS: Where an additional Partner wishes to join practice. Contractor provides relevant details to PCO

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Partnership Splits

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  1. Partnership Splits LMC Secretaries Conference 6 November 2008

  2. Sole Trader Partnership Company Limited The GMS Contract held between the PCO/HB and the Contractor

  3. Regulation 105 GMS: Where an additional Partner wishes to join practice Contractor provides relevant details to PCO PCO must be satisfied as to accuracy Contract varied to reflect change in partnership

  4. Two or more individual in practice:Regulation 106 GMS • Where a Partnership is reduced in number: 28 days notice to PCO • All remaining Partners and the Partner leaving, must sign notice specifying the name/names of the medical practitioners that the contract will remain with • This only works if the split is amicable

  5. Acrimonious Splits • Attempt to resolve the dispute • If Partner(s) intend to leave • PCO may terminate contract Inform the PCO PCO may offer the contract out to tender Partners may end up bidding against each other

  6. PMS Contract • Between the PCO and the individual or individuals • No corresponding paragraphs in the Regulation regarding additions to the Partnership

  7. Acrimonious Splits under PMS • Attempt to resolve the dispute • If Partner(s) intend to leave the partnership – does not necessarily affect the PMS agreement • PCO could agree variation to exclude • In any event PCO has the power to terminate on notice (NB. Recent BDA case on appeal)

  8. Temporary Arrangements When notice is served – PCO usually make temporary arrangements to ensure continuity. Could enter into short term contract Partners may not necessarily be offered permanent contract bidding process Bidding process may be commenced Consultation? NHS Act 2006 Health & Social Care Act

  9. Partnership Agreement • No agreement = Partnership Act 1980 = Partnership at Will Effects:- • Examples • dissolution on notice • forced sale of assets • redundancies • loss of medical contract

  10. Minimising Effects of Termination • Provide longer periods of notice of leaving/retirement • Assess how you will deal with loss of premises through termination of rental agreements or lease (ensure you negotiate favourable terms) • Could look at inserting clauses that provide for mediation or arbitration in a dispute • If Partners split, perhaps agree that majority will continue with the contract

  11. Common Problems • No partnership agreement or inadequate agreement • Basic misunderstanding of risk to medical contract • Failure of new Partner to sign partnership agreement (very common problem)

  12. Problem 1 • Dr A commenced work with a practice 18 months ago as a locum GP with a view to becoming a partner • Practice has 2 existing partners: Dr B and Dr C • The existing partners invited Dr A to join the partnership with effect from 1st January 2009. She accepted • They meet with the practice solicitor and agree terms of the Partnership Agreement (no copies received) • The rest of the practice is advised • Second week in December Dr A asks for the week before Christmas as annual leave • Dr B refuses – says it is disruptive to the practice • Dr A says Dr B’s 6 week holiday in the summer is likely to be more disruptive – Dr B withdraws offer of the partnership and advises staff • Dr C still wants Dr A as a partner and Dr B threatens to terminate partnership • No documentation evidence of a partnership

  13. Issues? • Is Dr A a partner? • Can Dr B terminate? • Effects to partners/partnership?

  14. Problem 2 • 3 partners in GMS practice • 1 partner off sick for 2 months • 2 partners inform PCT that 1 partner no longer works in the practice • The sick partner objects • Sick partner is sole owner of premises and practice receiving cost rent Question: Effects of the above?

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