When is a GMS partnership dissolution not a dissolution? Lessons from the Bhat case.
A recent High Court ruling has clarified the rules regarding the continuity of General Medical Services (GMS) contracts after partnership dissolutions. The case establishes important precedents for practices operating without formal partnership agreements and highlights the key distinction between “technical” and “general” partnership dissolutions.
What happened in the case?
The dispute centred around a GP partnership at the Sai Medical Centre, involving two equity partners (Dr & Mrs Bhat), and a salaried partner (Mrs Patel, who owned the practice premises).
There was no written partnership agreement in place (a ‘partnership at will’), and the conflict arose when the Bhats served a dissolution notice on Mrs Patel, who was no longer actively involved in the practice. The Bhat’s immediately formed a new partnership, and continued trading under the same name as previously. This led to uncertainty about the status of the GMS contract, with the Clinical Commissioning Group (CCG) interpreting the dissolution as triggering automatic contract termination because the contract was with the partnership which had been dissolved.
Key legal issues
The case hinged on two critical questions:
- whether partnership dissolution automatically terminates a GMS contract
- the distinction between “technical” and “general” dissolutions in healthcare partnerships
The High Court’s decision
The Court made several significant determinations:
- GMS contract continuity: the regulations make clear that a GMS contract is made ‘with the partnership as it is from time to time constituted’. It is, therefore, perfectly possible for partners to join and leave without impacting the GMS contract
- Technical dissolution: when the practice continues uninterrupted after the departure of a partner, the effect can be a “technical” rather than a “general” dissolution. Unlike a general dissolution, where the business is wound up, a technical dissolution would not necessarily terminate the GMS contract.
- Partner consent: partnership changes can be made without the consent of all the partners (or indeed the commissioner), so a partnership dispute does not preclude the possibility of a technical dissolution
Practical implications for GP practices
This ruling has important implications for practices:
- GMS contract protection: partnership changes do not necessarily terminate GMS contracts so long as service provision continues uninterrupted
- Partnership documentation: the case re-emphasises the importance of formal partnership agreements
- Property considerations: the case highlights the complexities when property ownership and partnership interests intersect
- Partnership disputes: this is now a very complex area, and advice should be sought early in a dispute. Any delay when taking advice could seriously prejudice your position since events will create facts about the nature of a partner’s departure and its impact on the partnership.
Reducing the risk
For many years, practices have been warned about the dangers of being a “partnership at will’, and this remains good advice even after the Bhat case. Undocumented partnerships now have an additional level of complexity, since GPs will have to grapple with the question of whether a partnership change constitutes a general or a technical dissolution. Unfortunately, these terms are not defined in statute so there is only case law to guide us, and this risks further litigation as these definitions are hammered out.
To best protect themselves, GMS partnerships should:
- Ensure they have an up to date partnership arrangement signed by all the current partners which makes clear how partners join and leave without dissolving (‘determining’) the partnership
- Ensure that surgery occupation arrangements are properly documented – a dispute around the property was at the heart of the Bhat dispute
- Be aware that a two person partnership is unlikely to be able to continue in the event of a partner leaving, and the rules around becoming a GMS single hander are different to partnership changes
- Seek specialist legal advice for partnership matters
Remember: the best way to avoid expensive and unpredictable disputes is to document arrangements properly at the outset.
Other considerations
Whilst the Bhat case helps to clarify what might happen in the event of a technical GMS partnership dissolution, it is a very specific case which turns on its facts. Indeed it overruled an earlier decision of NHS Resolution, and as we saw with the similar Cheema vs Jones case in 2018, court decisions can be unpredictable. The Bhat case now opens up a potentially significant difference between the treatment of GMS and PMS contracts in the event of a dispute.
GMS contracts are generally held by the partnership as constituted from time to time, but a PMS contract is personal to the persons who signed it, so the impact of dissolution will be different. Historically, the commissioner has treated changes in the partnership of GMS and PMS contractors in the same way, but this is unlikely to be possible after the Bhat case. We will keep readers informed as policy and case law develop in this area, but in the meantime, PMS practices must keep their partnership deeds up to date to minimise the risk of falling into a legal uncertainty about the impact of partnership changes.
For more information or a free, no obligation call with one of the DR Solicitors team, please contact us.
DR Solicitors can help
At DR Solicitors, we specialise exclusively in supporting primary care professionals, including GPs, dentists, and consultants. With our unparalleled expertise in NHS regulations and contracts, we help practices navigate complex legal landscapes while avoiding regulatory pitfalls.
- Specialist advice: we work only with primary care providers, ensuring you receive tailored advice from experts who understand the challenges of your sector.
- Regulatory awareness: our advice accounts for the NHS regulations that permeate all aspects of your business, helping you avoid breaches or missed opportunities.
- Holistic approach: we identify interconnections that generalist solicitors might miss, such as how contractual decisions impact NHS pensions or compliance with GMS contracts.
Many of our clients come to us after encountering issues caused by non-specialist advice. Whether you need support with GMS contract disputes, PCN disputes, or partnership disputes, DR Solicitors is here to help you navigate these complexities with confidence.
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Landmark court ruling on GP Contractual Dispute Resolution – what GPs need to know
A recent Court of Appeal decision has provided crucial clarity for GP practices regarding their contractual status and legal rights in disputes with the NHS. The ruling, which overturned a High Court decision, confirms that General Medical Services (GMS) contract holders operating as ‘non-health service bodies’ have the right to seek judicial review of NHS adjudicator decisions. This landmark case highlights the importance of understanding contractual designations and the legal pathways available to GPs who wish to contest NHS decisions.
What happened in the case?
The case involved Dr Sashi Shashikanth, a West London GP, who was served with contract termination notices by his Clinical Commissioning Group (CCG) for refusing to join a Primary Care Network (PCN) and declining to share patient contact details. The dispute centred on two key issues:
- Health Service body status
Dr Shashikanth’s practice had elected to operate as a ‘non-health service body’. This would have given rights to have the dispute heard in a court of law but, for reasons which are not clear, Dr Shashikanth and his advisers elected to have their dispute heard by NHS Resolution. Under previous rulings, this decision was thought to limit access to judicial review and would have meant that the ruling of NHS Resolution was final and binding on all parties. - Breach of contract allegations
The CCG claimed that Dr Shashikanth had breached his GMS contract by failing to cooperate with the PCN, despite PCN participation being described as voluntary.
Initially, the High Court ruled against Dr Shashikanth, stating that his ‘non-health service body’ status precluded him from seeking judicial review. However, the Court of Appeal reversed this decision, confirming that GMS contract holders – whether operating as health service bodies or non-health service bodies – retain the right to judicial review for decisions made by NHS Resolution. Fortunately for Dr Shashikanth, this decision also quashed the original determination and remitted the matter back to NHS Resolution for reconsideration.
Key implications for GPs
This ruling is a significant development for GP practices, offering clarity on several important legal points:
- Judicial review rights confirmed
GMS contract holders operating as ‘non-health service bodies’ now have access to judicial review of NHS Resolution decisions in a similar way to those operating as health service bodies. This provides an additional layer of legal protection, ensuring that decisions made through NHS dispute resolution mechanisms can be challenged if they are unlawful. However, it would be a mistake to regard this as equivalent to a right of legal appeal, as judicial review is only a very narrowly defined process to assess the lawfulness of decisions made by public bodies. - Contractual designations matter
Choosing to operate as an ‘health service body’ or a ‘non-health service body’ has far-reaching implications for how practices resolve disputes. Practices electing ‘non-health service body’ status gain access to the civil courts, including normal rights of appeal, in addition to the right to opt disputes into the NHS Resolution process. Health service bodies are limited to NHS dispute resolution mechanisms and have no right to opt disputes into the court process. - Clearer legal options
This case highlights the critical distinction between judicial reviews (which only examine the lawfulness of decisions by public bodies) and appeals (which evaluate the merits of decisions). Appeals are only available through the court system (and thus only to non-NHS bodies) and are a much more effective way of seeking to correct erroneous judgements. Practices must understand these options when navigating disputes.
Practical advice for GP practices
The key takeaways from this case are clear:
- Opting for ‘non-health service body’ status offers significant advantages over ‘health service body’ status, including broader legal recourse through the courts. If desired, non-health service body disputes can anyway be referred into NHS Resolution, and would now have the same rights to judicial review as disputes arising from NHS bodies. Practices should be aware that they can change their Health Service body designation at any time and we would strongly recommend that you make understand your current status if you are not already aware of it.
- Once GPs have understood their contractual designations they should tread very carefully when initiating a dispute resolution process to ensure they select the most pathway from the outset. Assuming you have retained the option, using the court system may well be preferable to using NHS Resolution, though specialist legal advice should always be sought on this point.
How DR Solicitors can help
At DR Solicitors, we specialise exclusively in supporting primary care professionals, including GPs, dentists, and consultants. With our unparalleled expertise in NHS regulations and contracts, we help practices navigate complex legal landscapes while avoiding regulatory pitfalls.
- Specialist advice: We work only with primary care providers, ensuring you receive tailored advice from experts who understand the challenges of your sector.
- Regulatory awareness: Our advice accounts for the NHS regulations that permeate all aspects of your business, helping you avoid breaches or missed opportunities.
- Holistic approach: We identify interconnections that generalist solicitors might miss, such as how contractual decisions impact NHS pensions or compliance with GMS contracts.
Many of our clients come to us after encountering issues caused by non-specialist advice. Whether you need support with GMS contract disputes, PCN disputes, or partnership disputes, DR Solicitors is here to help you navigate these complexities with confidence.
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The new NHS Premises Costs Directions 2024 – what you need to know
After years in the making, the new NHS Premises Costs Directions 2024 came into force on May 10th and replaced the previous Premises Directions with immediate effect. The Directions themselves can be fairly impenetrable, so read on if you want to understand why you should be interested, and how they might affect your practice.
At one level the changes are relatively minor: it is definitely evolution not revolution. However the tweaks which have been made will likely be helpful if you are looking to upgrade your premises or are concerned about the ‘last man standing’ problem. The changes should also simplify the process of lease negotiations, and they aim to better enable the provision of additional NHS services from primary care premises.
Upgrading Premises under the Premises Costs Directions 2024
The Commissioner now has discretion to fund premises improvement grants for 100% of the project value, whereas grants were previously capped at 66%. Helpfully, the scope of such improvement grants has been extended to include: the purchase of land specifically to build a premises extension; tenant fit out works of leasehold new builds; lease premiums; improvements which are necessary due to regulatory changes including environment impact improvements.
The potential sting in the tail relates to the modified repayment terms. The minimum ‘guaranteed period of use’ and abatement period for the smallest grants has been extended from 5 years to 6 years, and the maximum period for the largest grants (£1.2m or more) has been extended from 15 years to 18 years. The terms for more modest grants of between £144k and £660k have however been reduced to 9 or 12 years. Importantly, the grant will likely be subject to a grant agreement where the Commissioner must impose a variety of terms to protect their ‘investment’, including immediate repayment of outstanding amounts in the event the minimum period of use has not been achieved. In addition to the prescriber terms, the Commissioner may also impose ‘any other conditions they consider necessary to ensure value for money’.
Last Man Standing
The NHS has clearly listened to the long standing concerns that onerous property obligations have put some GPs off becoming partners, and encouraged others to close their practices when partner numbers decline. The underlying problem is that, particularly on new builds, landlords want long leases to recover their investment, but GPs are understandably concerned about making personal commitments for 25 years (or more) in an uncertain environment.
The new Directions anticipate leases being assignable to a nominee of NHS England in the event retirees are unable to find a successor to take over the practice and need to hand back their General Medical Services contract, but a new protocol will need to be developed to support this change and many leases may also need changing.
The Directions also permit the Commissioner to waive outstanding grant monies where a practice has sought to find a successor but has been unable to do so, but practices should be aware that neither assignment nor grant debt relief is guaranteed.
Lease negotiation
In a significant retreat from the 2013 Directions, there will no longer be a requirement for a signed rent review memorandum before engaging with the DV, and tenants will not be required to obtain their own valuation. They will still have to evidence that they have negotiated with the landlord (the Commissioner is not allowed to do this directly), but hopefully this streamlined process will reduce costs and speed up the process.
Another change worth noting is that there is a new obligation on leaseholder to attempt to ensure that landlords do not add VAT to rent. Where it is added the Commissioner will still reimburse, but it will be interesting to see how this new obligation plays out in practice. Certainly VAT on rent is no longer something which practices can entirely ignore.
Using GMS reimbursed space for non primary care services
There is a new general duty on the Commissioner to consider, with the contractor, whether any opportunities exist for additional, multi-functional use of GMS premises. This is not, however, opening the door for non NHS healthcare services, and restrictions are still in place requiring a pound for pound reduction in premises funding if a practice receives any third party contributions to recurring premises costs. The idea seems to be that other NHS healthcare services could be provided from within GMS space, probably without the other provider contributing to recurring premises costs.
Whilst this new flexibility is undoubtedly welcome, practices should always check to ensure that their lease permits co-occupation, and it will always be a good idea to get any such arrangement documented even if it is ‘rent free’. Fortunately, there is a new power for the Commissioner to reimburse the legal costs of documenting such arrangements.
One glaring omission from the new Directions is any mention of PCNs. This means that, regrettably, the difficulties associated with PCNs taking shared GMS space have not been resolved.
Clawback of overpayments
Another potentially significant change is the ability for the Commissioner to claw back overpayments. This right has of course always existed, but it appears that the purpose of the change is to override any date limitations on reclaims. The onus is now on the practice to self-report any overpayment, and not doing so will presumably be a contractual breach. NHS England will be required to consider repayment plans and does have the power to waive, but the risk is that reclaims could go back many years and of course include former partners. Given that most retirement accounts are regarded as final, practices may want to look at the partnership deeds to see whether additional consideration needs to be given to this eventuality.
Conclusion on the new NHS Premises Costs Directions 2024
Given that the 2004 and 2013 Directions have been almost entirely withdrawn, the new directions will apply to all practices, including existing funding arrangement. We therefore strongly recommend that practices familiarise themselves with the new rules, and take professional advice in particular before making changes to their current practice arrangements as the new rules will necessarily impact both property documentation and partnership documentation.
Contact us for more information on the new NHS Premises Costs Directions 2024 or any other legal issue, or call us for an initial free of charge consultation on 01483 511555.
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Proposed changes to fitness to practise regulation and the role of the PSA
All medical professionals will deal with their professional regulator in an administrative sense, and some will unfortunately have more involved interactions in their career. Indeed an unexpected letter from the GMC, is one of the least welcome communications that might land in a doctor’s inbox.
However many medical professionals are not aware that the medical regulators (GMC, GDC, GPhC etc) are themselves regulated by a body called the Professional Standards Authority, or PSA.
New process for handling fitness to practise matters
The PSA sets ‘standards of good regulations’ and reviews regulator performance, and is currently consulting on an entirely new process for handling fitness to practise matters across the healthcare profession. Under the proposed new system, more cases are expected to be dealt with on paper through a process called an ‘accepted outcome’ rather than going to a formal hearing.
Most readers will likely welcome the idea of the ‘accepted outcome’ paper process, as formal hearings are extremely stressful for the medical professional involved to say nothing of the time it can take to hear the case. If you have strong feelings about this proposed new approach you can add your comments to the consultation via the PSA website until 15 April.
Role of the PSA
One of the functions of the PSA is to review the decisions of a regulators fitness to practise panel. The PSA can appeal decisions of those panels if they consider that a decision has been incorrect, for example due to procedural irregularities or because the decision does not adequately protect the public. The PSA does this by lodging an appeal in the High Court against the professional regulator such as the Medical Practitioners Tribunal Service, rather than against the registered doctor. The doctor can then be made a party to such proceedings, and can make representations at the appeal if they wish.
This can sometimes put doctors in the unusual position of wanting to argue that the decision of the MPTS was correct! For example, one of our colleagues recently acted for a medical professional who was involved in a serious drink driving accident. At final hearing, the Panel determined a warning was sufficient, but the PSA argued that outcome was essentially too lenient and appealed. In this way, strange as it may sound, it is sometimes possible to achieve too good a result at a final hearing.
At DR Solicitors we have experience of dealing with PSA appeals throughout the country. If you are unlucky enough to be involved in one you should certainly seek experienced legal advice urgently. For more information about this or any other legal or regulatory matters, please contact us or call 01483 511555 for a free, initial discussion about your position.
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GP Practice incorporation – navigating the ICB approval process
If you are one of the increasing number of GP practices looking to incorporate, then you will probably have familiarised yourself with the pros and cons of incorporation and (hopefully) sought the advice of your accountant and solicitors. One of the next important steps is to gain the support and approval of your ICB. This can present its own challenges and in this blog, we look at how to navigate some of these to reach a successful outcome.
Starting out with GP Practice incorporation
ICBs have their own concerns with the use of companies as primary care businesses, but they seem to stem not so much from unfamiliarity as from them leading to the increased possibility of contract terminations. The concern isn’t totally unfounded – it is much easier for a GP practice to terminate its primary care contract if it is operating as a limited company because the business owners can avoid personal liability for staff redundancies, and may even avoid personal liability under their lease.
In order to ensure a commonality of approach amongst ICBs to requests for a GP practice incorporation, the NHS has adopted a framework, known as the Common Assessment Framework (CAF), for ICBs to use when assessing whether to allow a GP practice to incorporate. The ICB will ask a practice to complete a questionnaire, and then carry out a RAG (red, amber, green) analysis on various aspects of the post-incorporation practice. Aspects covered will include strategy & delivery, the company details, outcome for patients, care quality and finance.
In our experience, a RAG analysis of a company taking over a partnership that meets the following parameters, will generally lead to scores which are overwhelmingly green:
- the shareholders and/or directors of the company are the same as the current partners;
- the company has the right to operate from the current premises;
- there is no change to personnel or clinical procedures;
- the company is acquiring all of the material assets of the current partnership (this can be documented in a simple business transfer agreement);
- the current CQC rating is good.
The novation agreement
Assuming that the ICB approves the incorporation of the partnership, and the CQC grants a new registration in respect of the company (there is little reason for them not to do so if there is no change to personnel, location, operating procedures or business assets) then the ICB will prepare a novation agreement whereby the primary care contract is taken over from the current partners by the new company.
ICBs usually start with a template novation agreement as published by the NHS, and in our experience practice often just sign it on the assumption it is innocuous. However the template includes the possibility of a guarantee from the current partners in respect of the primary care contract, and in our experience that ICBs will often include this guarantee together with other restrictions. This has the effect of significantly reducing the limited liability benefits of incorporation.
It is important to understand that a template can always be varied, and in our opinion there is no reason why a guarantee needs to be provided in a novation agreement. We have successfully presented the arguments against including such a provision on behalf of clients, and have had the guarantees removed through an appeals process.
Conclusion
Practices decide to incorporate for many reasons, and limitation of liability is only one of them. It is worth bearing in mind that although the oft requested guarantee ‘only’ covers liabilities arising from the GMS/PMS contract, these can of course be significant. If they were not, why would the ICB bother asking for the guarantee in the first place?
It is important to remember that even when you are presented with a template document published by the NHS for use in a particular circumstance, it is still possible to negotiate its terms and you don’t just have to accept it as the ‘NHS standard’. Many of these documents have hidden ‘stings in the tail’ which you will at least want to know about, so you can decide whether or not you are prepared to accept them.
Our specialist team at DR Solicitors are here to advise you on your GP Practice incorporation journey. Whether you are just starting out or hitting the first hurdles to overcome, you are invited to call us for a free initial consultation about your incorporation plans. Please telephone 01483 511555 or contact us here.
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Incorporating a GP Practice – is it right for your practice?
If you are a primary care partnership looking into alternative ways to deliver your core services, then this article is for you. There are a number of legal and tax related implications to consider before incorporating, and in this blog we look into some of the pros and cons of incorporating a GP Practice.
What is incorporation?
‘Incorporation’ means to constitute (a company, firm or other organization) as a legal corporate entity separate from its owners.
You may already have set up a limited company, for example, to hold your premises, deliver consulting services or to subcontract some of your core services. This blog concentrates on transferring the whole of the practice – namely the core GMS or PMS contract – into a limited company.
Why incorporate?
Whilst there are clearly many positive attributes to the partnership model, there are also a few problems, including:
- unlimited joint and several liability
- lack of a legal entity to contract. In a partnership it is the partners who contract personally
Some of the benefits of delivering your core services from a limited company include:
- a limited company is a legal entity in its own right and may hold assets and liabilities and enter into contracts in its own name. The directors and shareholders may change, but ownership of the assets and liabilities by the limited company remains the same. This simplifies matters when dealing with changes in property ownership, as there will be no need to change the name of the registered owners at the Land Registry, deal with Bank refinancing, or change the names on any contracts.
- a shareholder’s liability is limited to the value of their shareholding, which is usually limited to a few hundred pounds. Incorporation separates business assets from personal assets and creditors cannot come after a shareholder’s personal assets for a debt owed by the limited company.
- the management and ownership roles are separated. This allows for a wider range of business models than the partnership model allows, such as bringing in business managers as directors without the requirement for them to contribute capital or incur risk. Similarly, shareholders may contribute capital and receive profits without having any day to day involvement in the running of the practice.
- all staff, including directors, are normally employees and therefore paid under PAYE and have full employment rights. The partners in a partnership are self-employed and have very limited employment law protection, but what they lose in employment protection they gain in tax relief and partnership status. With the current challenges in recruitment of new partners, the protection afforded by a directorship in a limited company may be more attractive to some.
But incorporation does present its own problems, including:
- you are bound by the strict regulations set out in the Companies Act 2006. These override all your own governance rules, and you are not at liberty to run your business in a way that suits you and your partners, without reference to the Act. Partnerships by contrast are governed by the Partnership Act 1890 which is a much simpler and more flexible set of regulations, most of which you are able to tailor to your own needs.
- whilst limited liability is a major benefit for the shareholders of a limited company, it is a significant disadvantage for creditors who may be unwilling to lend to a limited company unless it has sufficient assets (such as a surgery) over which they can take security. Banks may ask for personal guarantees from the shareholders, and landlords could ask for guarantees from the directors.
- there is no ‘expulsion’ mechanism to remove a partner in the event that you can no longer work together. Special rules need to be written into the company’s Articles but even then, it is likely to be complicated to expel as it will involve terminating a person’s status as an employee, director and shareholder.
- you will need to make annual filings, including accounts, at Companies House and such information is publicly available. You will need to hold regular board meetings, record the minutes and document certain decisions in a specific way.
- shareholders do not have individual capital accounts. When a company makes a profit (or loss) this is not divided up amongst shareholders, but is retained by the company for its own benefit. The directors may then recommend that a dividend is paid to the shareholders as a return on their capital invested in the company, but this is only made from a combined ‘pot’ of retained profits. It is illegal to make a dividend payment unless there are sufficient retained profits in the company as a whole.
Conclusion
Whilst limited liability is a hugely attractive benefit, limited companies are not panaceas to all the issues of running a primary care practice, and there are definitely both pros and cons. We have certainly seen a trend towards practices incorporating, but any decision to do so should only be taken after seeking expert advice from both tax accountants and specialist primary care solicitors so that you can be advised on your particular situation. Incorporating a GP Practice certainly works for some, but many others discover that it is not for them.
Our specialist team at DR Solicitors are happy to answer any queries you may have about incorporating a GP Practice, and can also put you in touch with some expert accountants. Please contact us here or telephone 01483 511555.
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Thinking of closing a branch surgery?
There can be many reasons for wanting to close a branch surgery, including the premises not being fit for purpose, the lease coming to an end or it not being financially viable to continue to see patients from it. You might think that closing a branch surgery should be fairly straightforward, particularly if the patients can be seen at your main site just down the road and there are potential cost savings to be had for both you and the NHS. So what’s the issue?
Your obligations when closing a branch surgery
As the holder of a GMS or PMS contract, you are not permitted to close a surgery site without first going through a statutory process. Briefly, this requires you to:
- alert the ICB of your intentions and follow the agreed consultation guidelines
- consult with the LMC, the patient participation group and other stakeholders (such as local residents, other local GP practices, registered patients, local community groups, local allied health care professional organisations)
- submit a formal application to close the branch surgery to the ICB
Failure to do these things could put you in breach of your GMS contract.
Tips for a successful closure application
As far as the ICB is concerned a site closure will result in a major change to patient delivery, an alteration to your GMS service provision and potentially a change to the money you receive under your GMS contract once it is varied to reflect the closure.
Be as pro-active as you can in your formal application to the ICB. Time spent on the consultation process and collating all the relevant information to include in your application, will be time well spent. Try to present your application to close a branch surgery with solutions rather than problems. Provide as much information as you can about how your registered patients will be impacted – will they have better access, less wait for appointments, the benefit of extended hours, dispensing services etc.
Other considerations when closing a branch surgery
If closure is approved, don’t forget to consult with your staff and take advice if closure might result in redundancies or a change to their place of work or working hours. Getting it wrong can be a costly mistake.
If you lease your branch surgery, then you will need to bring the lease to an end. Even if you don’t have a written lease in place, you might still have an implied lease or protected rights under the Landlord & Tenant Act 1954 which need to be brought to an end in order to release you from your liabilities.
If the branch surgery is freehold and a partnership asset, then you will need to take tax advice and speak to your lender if there is a mortgage on it. Failure to do so could put you in breach of your mortgage terms. Remember that you will remain responsible for the branch surgery premises from the date of closure, when payments under the Premises Costs directions will stop.
Conclusion
If you plan well ahead, you can make informed and sensible business decisions that minimise risk. If you would like further advice on closing a branch surgery, terminating your lease or managing staff, then please contact us on 01483 511555 or email info@drsolicitors.com and we will call you back for a free initial chat.
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Webinar: The critical role of the Data Protection Officer
The statutory obligation on GP practices, GP federations and PCN companies to designate a Data Protection Officer (DPO) does not end with engaging somebody to undertake the role. GP Partners and company directors remain responsible for ensuring the competency of their DPO, and can be held liable if the DPO fails to properly undertake their duties.
Designating and supervising/undertaking the role of DPO is not straightforward and many GP practices and other primary care organisations are not meeting their statutory obligations. The ICO continues to offer advice to data subjects on claiming compensation as a result of a data breach or an infringement of their data protection rights, further increasing the risk of claims against GPs for data protection failures.
Hosted by our data protection and compliance specialist David Sinclair, this webinar provides:
- an update on the relevant statutory obligations
- top tips to reduce the risk
- steps to take in the event of a claim
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Patient’s fitness to drive and managing breach of confidentiality
As a GP, you are used to looking into the wider issues around a patient’s presenting complaint, such as safeguarding matters or a patient’s social circumstances and living conditions. However, one issue that could be over looked is a patient’s fitness to drive, and we are all familiar with the news stories of drivers suffering medical emergencies behind the wheel, often with fatal consequences.
In this blog, we look at what to do if you’re not sure about a patient’s fitness to drive and the steps you should take if you suspect that a patient will continue to drive after you have advised them not to.
Understanding your obligations around a patient’s fitness to drive
Often assessing fitness to drive will be explicit – you may be specifically asked by the patient, or the DVLA to consider this and all HGV Group 2 licence holders require a regular medical assessment.
GPs also have an obligation to consider fitness to drive matters even if the patient has not consulted specifically in relation to that, and when a patient has made you aware of a medical condition that could impact their fitness to drive.
Individuals driving when they should not can, and sometimes does, have fatal consequences. Many may recall the Glasgow bin lorry crash of December 2014 in which 6 people died and 15 were seriously injured. The driver of the lorry had fainted at the wheel and there was evidence in his medical records that he had previous episodes of unexplained fainting. Unfortunately, that information was not prominent in the records so the GPs that the driver presented to didn’t consider it a significant problem and took no action to stop him driving.
James Stewart of DR Solicitors acted for the GPs in the subsequent Fatal Accident Inquiry, and at that Inquiry criticisms were made that GPs did not appreciate the significance of a history of vasovagal syncope (ie fainting) that did not appear to have obvious triggers. Although the driver’s condition was not prominent in the records and the driver himself hid or minimised the problem, the Inquiry found that some of the GPs involved were not clear on their responsibilities as they relate to fitness to drive matters.
Carrying out your obligations
As the GMC guidance on fitness to drive states in its preamble:
“If a patient has a condition that could affect their fitness to drive, it’s their duty to report it. But as their doctor you have responsibilities as well”
The GMC guidance was updated in March 2023 and should be a GP’s first port of call if they have any concerns that a patient may be unfit to drive for whatever reason.
If a patient is assessed as unfit to drive, the first step is to advise the patient that they are not fit to drive and that they should report themselves to the DVLA.
Whilst many patients will accept that they are no longer safe to drive, others will be very resistant to any suggestion that they should no longer drive as it can significantly curtail their freedom and in some cases their livelihood.
Here it should be remembered that whilst doctors have a duty of care to their patients they also have duties to the public at large, as the guidance states:
“Doctors owe a duty of confidentiality to their patients, but they also have a wider duty to protect and promote the health of patients and the public”
The consequence of this wider duty is that if certain criteria are fulfilled, then a doctor can breach patient confidentiality and report a patient to the DVLA without their consent. Clearly this is going against one of the fundamental principles of the medical profession and should be a last resort.
As per the guidance:
“If it is not practicable or appropriate to seek consent, and in exceptional cases where a patient has refused consent, disclosing personal information may be justified in the public interest if failure to do so may expose others to a risk of death or serious harm. The benefits to an individual or to society of the disclosure must outweigh both the patient’s and the public interest in keeping the information confidential”
Such a fundamental breach of patient confidentiality should not be taken lightly and we would recommend taking professional advice before doing so.
Conclusion
Doctors should only report a patient to the DVLA without their consent when all the other options have been exhausted. Make sure you consult with the relevant GMC guidance very carefully before taking any action, as it lays out the various steps that must be undertaken before confidentiality can be breached.
As you might imagine, the patient involved may raise a complaint for breach of confidentiality, but you cannot allow the threat of a complaint deter you from your obligation to report.
If in doubt, doctors would also be well advised to take advice from senior colleagues or discuss with their defence organisation or discuss with DR Solicitors.
For further information about this or any other regulatory matter, please contact us on 01483 511555 or by email info@drsolicitors.com
News
Have you received a Section 25 notice from your landlord?
If yes, you need to read this…
A Section 25 notice is an important legal document that can affect a GP tenant’s occupation of the surgery premises. Ignore it at your peril because you could lose important legal rights under the Landlord & Tenant Act 1954 (L&TA).
In this blog, we take a closer look at the L&TA, including the benefits it offers tenants and the challenges you may face if your lease is excluded from the Act. We also set out some steps you can take to reduce the risk of losing your occupational rights when your lease is up for renewal.
What is the Landlord & Tenant Act 1954?
The L&TA is an important piece of legislation that governs the relationship between landlords and tenants of commercial premises. It was introduced to offer greater protection for tenants, and the rights and obligations covered by the Act will be in addition to any terms and conditions set out in your lease.
Is your lease inside or outside of the L&TA?
Check your lease to see if you are protected by L&TA. Unless your lease includes a specific clause contracting you out of the L&TA, then you are likely to be protected by L&TA. This will also generally be the case even if you do not have a formal documented lease in place but have been in occupation and paying rent for a number of years. Most GP practices in NHSPS buildings are protected by L&TA.
Inside the L&TA – benefits to GP tenants
If your tenancy is covered by the L&TA then you will benefit in a number of ways, including:
- You will have an automatic right of renewal. That means that even when the fixed term of your lease ends, you have the right to remain in occupation and to apply to the court for the grant of a new lease.
- If you and your landlord fail to agree on the terms of a new lease then the court can make key decisions, such as the length of the new lease and the rent payable. In our experience it’s very rare for a primary care lease to be litigated in this way.
- When it comes to the length of the new lease, the court is much more likely to agree to a time period requested by a tenant, than by a landlord.
- If your lease payments are linked to the DV’s assessed rent (as all GP surgery rents should be), a court is unlikely to permit a new rent which permits a landlord to break this link, or indeed to permit the introduction of new or significantly varied service charges.
What is a Section 25 notice and what happens next?
If you have a protected tenancy then it will automatically continue under the same terms once your lease has expired unless you or your landlord serve a notice under L&TA bringing the tenancy to an end.
With surgery leases, landlords often use the Section 25 procedure as a positioning tactic and to preserve the value of their property portfolio. Examples are that they want you as a tenant but they want a new lease in place with a higher rent; or they want you to engage in settling a service charge debt. You can read more about the NHSPS service charge disputes here. As a GP tenant with guaranteed rent reimbursement, you are in a good position to negotiate and we have helped many clients reduce their historic service charge debt in return for entering into a new lease. However, you need to be strategic. Whilst it’s usually better to have your lease terms written down in a lease so there is certainty, sometimes there’s a good reason not to want a new lease in place – maybe there’s a merger coming up, retirements, or a new development on the horizon. All this needs to be thought through when deciding how to respond to a Section 25 notice.
There are strict time requirements as to when a Section 25 notice can be served and it must be served on the correct people. We can check this for you – if there are errors the notice may be invalid.
Negotiating a new lease
Once the Section 25 notice has been served on you, your original tenancy will come to an end on the specified termination date. If your landlord has confirmed that they do not oppose the grant of a new lease, you have a strict deadline within which to negotiate and agree a new lease. The deadline in the Section 25 notice can be extended by mutual agreement and it is not unusual to see a number of extensions being agreed while the terms of the new lease are negotiated and the lease is being approved by the District Valuer. All extensions must be agreed in good time before the deadline and in writing. If that deadline passes and no extension has been agreed with your landlord and you have not made an application to the Court (see below), then you will lose your right to seek a lease renewal from the Court under the L&TA. Here at DR Solicitors we manage these Section 25 dates very carefully so as not to compromise a tenant’s position.
If your landlord will not extend the deadline or in circumstances where a new lease cannot be agreed, we can make an application to the Court and that application must be made by the date specified in the Section 25 notice. That’s why you must not leave it too late before asking the landlord for an extension. If an application to Court is necessary a much more extended and complicated procedure is involved, with those proceedings lasting a number of months and quite probably more than a year, unless a lease is agreed along the way. Those proceedings are also costly and to be avoided. It is therefore usually in everyone’s best interests for lease terms to be agreed without the necessity of an application to the Court. I’m happy to say that it’s highly unusual for us to have to make a Court application for a GP lease.
Outside the L&TA – difficulties for GP tenants
If your lease excludes the rights under the L&TA, then there are some key issues you may face:
- When your lease comes to an end on the specified termination date, you will have to vacate the surgery regardless of the impact on patients. Plan ahead! Diarise the lease termination date and get in touch with us to discuss next steps at least 12 months ahead of time. The nearer you get to the lease ending, the weaker your negotiating position with your landlord
- It will be entirely up to your landlord whether or not they decide to offer you a new lease; if they do, then it could be on very different terms to your previous lease including terms which are not going to be approved by the DV. For instance the rent demanded under the new lease may be more than what the District Valuer is prepared to approve and authorise.
While you may be keen for your lease to be protected by the L&TA, your landlord may prefer it is excluded. This means it could become an important part of your negotiations. The arguments for and against excluding it will depend on many factors, including the buoyancy of the current rental market, and your future plans and those of your landlord.
Protecting your practice
The L&TA is a particularly complex area of law, with strict procedures that have to be followed to the letter, or you risk losing your protected rights. Unfortunately, even a seemingly trivial technical error in the processing of notices given in accordance with the L&TA can cause them to be invalid, resulting in some serious and potentially very costly problems for the practice.
We recommend you always seek assistance from a legal professional at least a year before your lease is due to expire (whether or not you wish to renew the lease or bring it to an end) and in the event that you receive any notice from your landlord seeking to terminate or change the terms of your occupation (such as a Section 25 notice).
If you are thinking of leaving a GP partnership then make sure your name comes off the lease when you leave otherwise you could receive an unwelcome Section 25 notice in the post. The partnership deed should also contain robust leasehold succession planning in it to ensure the surgery lease is always in current names.
As with all contract or lease negotiations, it is advisable to seek the advice of an experienced legal team, who can advise you on your specific case and personal circumstances.
For more information about this, or any other legal issue relating to your practice, please contact Daphne Robertson on 01483 511555 or d.robertson@drsolicitors.com