Weaponising Data Subject Access Requests
If you find yourself in dispute with a partner or employee, then you may well find yourself in receipt of a Data Subject Access Request (DSAR). This is an increasingly common occurrence in civil and employment litigation and requires careful handling. In our experience many primary care practices do not have effective systems in place to deal with DSARs, which can then result in significant reputational damage and financial cost.
In this blog, we look at how and why DSARs are being used as a legal tactic in disputes, and how your Practice can minimise the risk of a claim arising out of one.
What is a DSAR?
The UK General Data Protection Regulation 2016 (‘GDPR’) provides data subjects with a right to access their personal data. Many practices do not realise that a DSAR can be made in any format, including orally, and can be made to anyone in the organisation.
The GDPR also provides data subjects with a statutory right to claim compensation from a provider where they have suffered material (eg medical bills, loss of wages) or non-material (eg distress, anxiety) damage. It has been established that non-material damage can include a data subject’s ‘loss of control over their personal data’.
Article 15 of the GDPR gives a data subject a further right to sue a data controller if they fail or partially fail to respond to a DSAR. ‘Fail’ includes responding late and/or not providing the mandatory information. Recent damages paid range from £750 for the ‘frustration’ felt by a data subject whose personal data had not been erased, to £18,000 awarded for distress following the inclusion of inaccurate personal data in a report.
Why are DSARs important?
DSARs, other than those held to be manifestly unreasonable or excessive, are a fundamental legal and human right that the Courts have held to be ‘purpose blind’. This has led to DSARs being used as a weapon by individual claimants and their solicitors to short-circuit the normal legal disclosure process. The hope is to pressurise a data controller into early and higher settlements by highlighting a breach and/or threatening civil action for compensation.
If poorly managed, DSARs can also result in claimants being given information to which they are not entitled, such as other people’s personal data, which would itself constitute a data breach. This then enables the claimant to increase the size of their own claim, and opens the possibility of further claims from new claimants. Unfortunately, the size of the likely awards means that some solicitors are prepared to act on DSARS and data breach claims on a no win/no fee basis, which simply encourages even more claimants to come forward. In this way a DSAR received on a small dispute can quickly snowball into multiple large claims against a practice.
Managing DSARs
Good DSARs management starts with processes and staff training. Since DSARs can be made to anyone in the practice, all staff must understand what to do if they receive one. This minimises the risk of a DSAR being overlooked. Practices should then have a single point of contact responsible for responding to DSARs, who is trained in the regulations and who has appropriate access to the relevant systems. They should also understand and manage the timelines for responding, and report directly to a responsible partner to enable quick decision-making. It would also be a good idea to know who you will approach in the event you need expert legal help.
Conclusion
The use of DSARs as a litigation weapon is increasing, as are the number and size of claims against data controllers. It is important that primary care practices have robust, formal procedures in place to ensure that:
- all staff can recognise a DSAR;
- all data search, collation, redaction and removal processes are GDPR compliant
- DPA exemptions are correctly applied;
- all non-disclosable information is withheld;
- any consents to disclosure are valid; and
- timeframes are strictly adhered to
Primary care providers who are uncertain about dealing with a DSAR should seek legal advice as soon as possible, particularly if there is a link to a known or potential litigation matter. If you would like more information about this or any other matter, please contact Nils Christiansen or David Sinclair on 01483 511555, email n.christiansen@drsolicitors.com
News
ARRS Chaos – How to avoid some of the ARRS employment traps
One of the underlying issues with ARRS resources is the challenge in deploying staff across multiple member practices. This sharing of resources cuts across the usual employment relationship where an employee works for a single employer, and across most employment laws and regulations which have a single employer arrangement in mind.
Because a PCN is a contractual construct (as opposed to a legal entity), it cannot employ staff in its own name. PCNs are therefore forced to come up with structuring and contractual workarounds to achieve the desired result.
These workarounds include:
- appointing a ‘lead practice’ to act as the employer;
- entering into a ‘joint employer’ arrangement;
- sub-contracting with a GP Federation or third party;
- incorporating the PCN.
The desired outcome is the same, namely a PCN resource who works across all the member practices, and where all the practices have the same or similar rights and obligations towards that member of staff.
Where to start? Identify the key responsibilities
The easiest way to achieve the desired outcome is to break down the various responsibilities associated with engaging staff, and agree which entity will perform it and how. Key responsibilities include:
- Recruitment responsibility
- Day to day management, eg scheduling & work allocation
- HR management, eg disciplinary and grievance procedures, annual review, agreeing pay and pay rises.
- Organising cover in the event of absence and deciding who will pay for it (ARRS does not currently reimburse this cost).
- Planning and paying for dismissal or redundancy
- Managing plans to restructure the PCN and deciding what should happen to the ARRS staff members
In a traditional employer/employee scenario, all of these responsibilities would sit with a single employer. By contrast, in a PCN the responsibilities can be shared amongst core network practices, or transferred, in whole or in part, to another organisation entirely. The answer will depend upon your structuring choices and could be any one of (1) to (4) above, but what is clear is that not all of the responsibilities need to reside in one place, indeed there may be differing optimal solutions for each different resource.
Case Studies
In our previous blog we gave some examples of resourcing problems that PCNs are encountering, and will now explore those further:
Q Who will cover my Clinical Pharmacist when they are on short term leave?
A Firstly, consider whether cover will be required for the duration of the staff member’s absence. This needs to be agreed between the practices, but full cover is more likely in the case of a clinical resource than a non-clinical one.
If cover is required, then who will provide and pay for the cover is a contractual question. Broadly, unless you’ve agreed amongst yourselves or with your supplier (in the event you’ve sub-contracted) that there will be cover, then the default position is there will be no cover.
If the employer is a lead practice, the answer should lie in your PCN Agreement or more likely, a Workforce Sharing Agreement.
If the employer is a GP Federation, Trust or similar, the answer should lie in the PCN sub-contract with that party.
Q My Occupational Therapist is under-performing and I want to move to an alternative provider – can I do so?
A This scenario clearly assumes that a third party is providing the occupational therapist. Subject to any termination provisions in the contract, you would normally be free to move to another supplier of services. However, if the occupational therapist is working exclusively for your PCN, then the switch may be a service provision change to which the TUPE Regulations will apply. The effect of this is that even if you were to move to another supplier, the under-performing occupational therapist is likely to automatically transfer to the new supplier and you could therefore still have the same person turning up for work.
In reality, this is likely to be resolved by discussion with the supplier and you will have to go through the contract management processes with that supplier. This will only be possible if you have a well drafted contract setting out the expected service levels and you are able to explain in what ways those service levels are not being met.
Q Who picks up liability in a redundancy situation?
A The answer to this is always the employer in the first instance. The employer may be able to recover the costs from the member practices but only if there is an agreement in place stipulating that they can do so. This would either be the PCN Agreement, a Workforce Sharing Agreement or a sub-contract depending on the structure.
Inevitably, this is something which is likely to be hotly contested so it is important that these documents are well drafted so that all parties are confident that they rely on them. Also bear in mind that any contractual promise is only as good as the party who has given it, so you will want to make sure you understand the financial standing of your contracting parties.
Conclusion
In summary, the use of ARRS resources is inherently complicated and goes against the normal way of employing staff. Our recommendation is that you analyse the key responsibilities and figure out which legal entity is going to be responsible for each of those and then critically, make sure that this is written into the relevant agreements. Those agreements could be a PCN Agreement, a Workforce Sharing Agreement or a sub-contract. The key is that these documents are well drafted and properly negotiated. Remember that these are all legally binding documents and are the only mechanism to achieve any of the above outcomes.
Once you’ve determined this, then the relevant employer must ensure that each contract of employment with a PCN resource reflects the unique arrangements have been made. It is unlikely that a standard ‘off the shelf’ employment contract will do this, so this will usually need some careful drafting.
As can be seen, working with an ARRS resources can be complicated and unfortunately, problems are likely to emerge. As always, the risks can be minimised by taking appropriate advice in advance.
If you would like to speak to an expert solicitor who can help you with your PCN Agreement, Workforce Sharing Agreement, employment contracts or third party sub-contracts, then please call Daphne Robertson on 01483 511555 or email d.robertson@drsolicitors.com
News
PCNs – the new phase of Managing Growth
PCNs have now successfully established themselves, and are beginning to find their place in the NHS. They have usually engaged a number of ARRS resources, are normally delivering the COVID vaccines, and have, in general, achieved more in the last 2 years than many people believed possible. With 99% of practices now members of a PCN, many of the key organisations in healthcare are talking about how PCNs can deliver for them and their patients. In many ways it is hard to describe PCNs as anything other than a great success.
Take a step back for a moment to June 2019, when PCNs were set up. The focus was on getting the whole of England moved simultaneously into PCNs so it was done quickly, informally and with little consideration to structure and future-proofing. During this ‘Establishment’ phase, this informality was a strength and not a problem: risks were generally manageable and the money involved was not huge. However as PCNs have matured, the problems with this informality are becoming clear as PCNs are finding it challenging to scale-up. To continue to grow successfully PCNs are having to find new, more formal ways of working.
In our opinion PCNs now need to move on from the ‘Establishment’ phase, and into a new phase of ‘Managing Growth’
What are the key issues to be resolved in the phase of Managing Growth?
1. The models of engaging the ARRS resources need to be formalised properly. Some of the scenarios that we are seeing frequently, include:
- who will cover my Clinical Pharmacist when she’s on maternity leave?
- my Occupational Therapist is under-performing and I want to move to an alternative provider – can I do so?
- our Health & Wellbeing Coach has been shielding. We need him back in the Practice but the Federation (who provide him) says they will continue to support him to work from home. What are my options?
- we have a PCN Social Prescriber from a third party provider. She doesn’t fit in and is rude to patients, who have complained, so we’ve told the third party provider that we don’t want her any more. She has now alleged that we are discriminating against her – something we strongly refute. The third party provider also says we’ve got to pay for her until they find her somewhere else to work.
- who picks up liability in a redundancy situation?
Whilst you’re never going to stop these tricky employment scenarios occurring, the questions they are raising do not always have clear answers due to contractual uncertainty. The ideal position would have been that the questions were thought through beforehand and the answers built into contracts, but unfortunately most PCNs simply didn’t have the time to give this enough thought, and they now need to do so if they want to move into the Managing Growth phase with confidence. We will explore this further in a separate blog.
2. PCNs are going to have to develop management structures characteristic of a well-run business. For many PCNs, this is likely to lead to a decision to form some form of incorporated entity which will be run as a captive shared service centre. Such a company will act under instruction from the PCN, but will have separate legal form and therefore be able to better manage and contain risks. This could be a modified Federation or a separately incorporated PCN Company. If you missed it, you might be interested to view our V-blog on the subject of incorporating your PCN.
3. PCNs and Federations need to figure out how to work together. Federations have typically been around longer and already have contracts and resources in their name. Some have been more successful than others but they are all GP-led, local businesses. PCNs have all of the ARRS money to spend and are seen as the point of integration for future services. There is a risk that the two entities compete with each other, when usually the best answer will be reached through collaboration rather than competition.
How Federations and PCNs work together will undoubtedly differ on a case by case basis and we have seen a variety of different models emerge, but what is clear is that if PCNs and Federations are allowed to compete, neither is likely to be as successful as they would be if they collaborated.
We will discuss the different models for Federations and PCNs to work together in a separate blog.
Next Steps
In conclusion, PCNs have become victims of their own success. Unless they quickly move into the Managing Growth phase and update their management structures and contracts to reflect working at scale, they are likely to find that problems begin to emerge. The list of potential issues is long: is there sufficient financial control around the PCN funds?; are there hidden tax liabilities such as VAT?; is the staffing model clear and documented?; the list goes on.
In our view, the Managing Growth phase means looking at PCNs with a commercial mindset, and ensuring that they are managed and operated as efficiently as a well-run practice. Care must be taken to ensure that PCNs do not develop a ‘mind of their own’, but there is no reason why this should happen if proper governance structures are put in place.
We will be covering more on this subject in future blogs, but in the meantime, if you have any queries relating to your PCN, please get in touch with Nils Christiansen on 01483 511555, email n.christiansen@drsolicitors.com
News
The importance of keeping your staff policies and training current and relevant
How up to date is your staff training really? Take a moment to answer these 5 questions:
- Do you have policies and procedures dealing with equality and diversity, for example in your staff handbook or intranet?
- When did you last review and update your policies and procedures?
- When did you last provide training to all staff, including your Practice Manager?
- Have you provided refresher training?
- Do you know how to investigate a complaint of discriminatory treatment?
If you have answered ânoâ, ânot sureâ or âover six months agoâ, you should read onâ.
A recent decision in the Employment Appeals Tribunal raises the question of what is considered ‘reasonable’ when it comes to employers providing ongoing training to employees. In the case of Allay (UK) Limited v Gehlen, a colleague made racist comments to Mr Gehlen, who was of Indian origin. These comments were heard by and reported to other colleagues, including two managers, but nothing was done. Allay (UK) Limited sought to defend the claim brought against it by relying on section 109(4) of the Equality Act 2010, which states that an employer can defend a claim resulting from otherwise unlawful discriminatory actions of an employee, if it can demonstrate that all reasonable steps were taken to prevent employees from committing discriminatory acts. Here, the employer pointed to its policies and procedures on equality and harassment and training given to staff in 2015.
Allay (UK) Limited’s defence failed. Although the training clearly informed staff about what to do should harassment or discriminatory behaviour occur, at least three members of staff were aware of the racist comments made to Mr Gehlen and did nothing about it. The perpetrator tried to pass off the comments as banter. The Tribunal said that this showed that the training was âclearly staleâ and that refresher training was a reasonable step which the employer could and should have taken, even though Allay (UK) Ltd was a relatively small employer. The failure to take this ‘reasonable’ step meant that they could not rely on the defence which required them to have taken all reasonable steps and compensation was payable to Mr Gehlen.
What steps should an employer take?
You may wish to review your current employee training schedule to make sure that it properly meets your requirements and provides for regular refresher training – then make sure the refresher training is undertaken.
Your policies and procedures should be reviewed regularly to ensure they are up to date both in terms of the law and relevance to your Practice. Do not rely on generic, off-the-shelf policies that are unlikely to reflect accurately your Practice’s specific needs. Similarly, your staff handbook should be bespoke to your Practice, to show that you have really considered the needs of your Practice and the policies adopted.
Conclusion
Achieving the standard required to rely on the defence is possible and within reach of all our primary care clients. If you would like to find out how we can help you make sure that you do not unintentionally cut off this potential line of defence, please contact DR Solicitors by email info@drsolicitors.com or call 01483 511555
News
Integrated Care Systems Consultation: Very little time to respond
NHS England recently issued a consultation on significantly extending the role of Integrated Care Systems (ICSs) in the NHS. The proposals are very far reaching for Primary Care as well as other NHS providers, and the consultation is set to close on 8 January 2021 so time is short.
What are the Proposals?
ICSs have been around for a couple of years now, and bring together CCGs, Trusts, Councils and other NHS Organisations to ‘take collective responsibility for managing resources, delivering NHS standards, and improving the health of the population they serveâ. To date ICSs have been collaborations between existing organisations rather than creating anything new.
At heart, the proposals in the consultation paper are to put the ICSs on a firmer footing by introducing new legislation. There are 2 options presented, and it should be noted that ‘Doing Nothing’ is not an option. The implicit conclusion must be that the current organisation of the NHS in England is no longer considered fit for purpose. The options are:
Option 1: a statutory committee model with an Accountable Officer that ‘binds together’ current statutory organisations
Option 2: a statutory corporate NHS body model that additionally brings CCG statutory functions into the ICS.
There is a clear preference in the paper for Option 2. Under this model the current GP-led CCG model would disappear and CCG functions would move into ICSs. ICSs would instead be governed by a board consisting of representatives from the ‘system partners’, including, as a minimum, representatives of NHS providers, primary care and local government.
Under Option 2, ‘many commissioning functions for which NHSE is currently responsible could be transferred or delegated to the ICS’. Critically, it also anticipates allocating ‘combined population-level primary care, community health services and specialised services population budgets to ICSs under this option. There is no doubt that these proposals are very far reaching and, if adopted by the government, will see a radical change to the NHS in England. They will also open the door to a very different role for primary care and we will analyse these changes in a separate blog.
How to respond?
The Consultation poses 4 questions, and asks for responses by 8 January 2021. The questions are all framed as ‘Do you agree thatâ’ so you will need to be clear in your answers if you actually disagree with any of the statements. The four questions are:
1. Do you agree that giving ICSs a statutory footing from 2022, alongside other legislative proposals, provides the right foundation for the NHS over the next decade?
2. Do you agree that option 2 offers a model that provides greater incentive for collaboration alongside clarity of accountability across systems, to Parliament and most importantly, to patients?
3. Do you agree that, other than mandatory participation of NHS bodies and Local Authorities, membership should be sufficiently permissive to allow systems to shape their own governance arrangements to best suit their populations needs?
4. Do you agree, subject to appropriate safeguards and where appropriate, that services currently commissioned by NHSE should be either transferred or delegated to ICS bodies?
Quite how NHSE expects to receive carefully considered responses to such far-reaching proposals in a tight timescale in the midst of a Covid pandemic, during the flu season, and over the Christmas period is not explained. Although we would obviously recommend that readers respond by 8 January if they can, we would suggest that if you would like to respond but feel that the deadlines are too tight, as a minimum you notify NHSE of this so that later representations may possibly be considered.
If you wish to discuss the impacts of any of these changes on your practice, PCN or federation, please contact Nils Christiansen on 01483 511555, info@drsolicitors.com
News
FREE: DR Solicitors Covid Collaboration Agreement Template
As a small token of our appreciation for the commitment shown by everyone in primary care throughout the pandemic, we have produced a DR Solicitors Covid Collaboration Agreement template which is free to download here.
Our template is based on the NHS national template which many of you will already be familiar with, but with recommended amendments and guidance notes to assist when drafting. As with any template, you will still need to apply some thought when completing it, but this will hopefully enable more PCN Groupings to feel confident about completing their Covid Collaboration Agreement themselves.
We have sadly lost many GP clients to Covid during 2020, and they have of course left behind families and local communities who miss them greatly. We hope that by sharing some of our knowledge in this way we can play a small part in bringing this pandemic to an end as quickly as possible. Thank you to all of you from everyone at DR Solicitors.
News
The Covid-19 Vaccination Collaboration Agreement
The Covid-19 Vaccination Collaboration Agreement: Aim for Pragmatism not Perfection
The deadline for GP practices to commit to the Covid-19 Enhanced Service specification was midnight on 7 December. Signing up committed Practices to work together to deliver the vaccine in ‘PCN Groupings’, and to sign ‘Covid-19 Vaccination Collaboration Agreements’.
Covid-19 Collaboration Agreements must be signed by all member practices before administering the vaccine, so most PCN Groupings have less than a week to perform this next step.
NHS England has published a template Covid-19 Collaboration Agreement, but the document is 9000 words long and includes nine mostly blank Schedules for practices to complete.
Since the Covid-19 Collaboration Agreement will create a binding contract between practices it would normally be advisable to seek legal advice before signing it. But with over 1250 PCN Groupings across the country and less than a week to go this will be impractical for most. So what should practices do?
The key is to be pragmatic. There is not enough time to create a perfect contract, so focus on the most likely problem areas. These are money (Schedule 5), decision making (Schedule 7), and indemnities (Clauses 34-40 as well as Schedule 4.1 Clause 10).
Where a PCN Grouping has an identical membership to an existing Primary Care Network (PCN), it should be possible to leverage the current PCN governance and cross-refer the collaboration agreement to a well-drafted PCN Agreement. This will greatly simplify the process.
Where PCN Groupings are not identical to PCNs, or existing PCN governance is poor, it will be more difficult. These Groupings will essentially have to create a new PCN from scratch over the next few days, which is a near-impossible ask. These Groupings may simply have to ‘agree to agree’.
In the end the Covid-19 vaccine needs to be delivered regardless of any contractual niceties. You should obviously try to agree as much as you can this week, but focus on the most contentious points and write down whatever has been agreed. You may also want to expressly agree that you will revisit any contractual gaps once vaccination is underway, and set out the process for doing this.
With a little luck and goodwill, no Covid-19 Collaboration Agreement will ever be relied on in a dispute between the parties. Whilst contracts are important public health is vastly more so, and we are all hugely indebted to our primary care clients and everyone in our NHS for your enormous dedication and sacrifice through this difficult time. Thank you and good luck with administering the vaccine over the coming months.
If you would like to discuss any particular concerns regarding the Covid-19 Collaboration Agreement, then please don’t hesitate to contact Daphne Robertson at d.robertson@drsolicitors.com or call 01483 511555.
News
Healthcare Professionals: be careful what you indemnify
Healthcare Professionals – be careful what you indemnify
With the increase in collaborative working and working at scale it is becoming common for the owners of a primary care practice to be asked to provide indemnities, say in a sale or purchase contract or in a merger agreement. But what does giving an indemnity actually mean, and what are the risks to you?
What is an indemnity?
An indemnity contract arises when one person takes on the obligation to pay for any loss or damage that has been, or might be, incurred by another person. It is therefore a promise to make a future payment.
Why might you be asked to give one?
Over the centuries the English Courts have developed common law rules for assessing liability for breach of contract. These rules attempt to strike a fair balance between the interests of the party in breach and the party which is the victim of the breach. The factors which determine such balance include remoteness of causation, foreseeability of loss and mitigation of loss. By asking you to give an indemnity, the other party is attempting to move the balance in their favour.
A 1996 judgement by Lord Hoffman explains the difference in assessment of damages by common law rules and by indemnities:
“A mountaineer about to undertake a difficult climb is concerned about the fitness of his knee. He goes to a doctor who negligently makes a superficial examination and pronounces the knee fit. The climber goes on the expedition, which he would not have undertaken if the doctor had told him the true state of his knee. He suffers an injury which is an entirely foreseeable consequence of mountaineering but has nothing to do with his knee.”
Using the Court’s common law rules for assessing liability, there would have been no liability against the doctor because, although they were negligent, the negligence hadn’t been a factor in the subsequent injury, which was caused by a mountaineering incident unrelated to the knee problem.
If there had been an indemnity in place the Courts might well have found the doctor liable not only for the injury but also for the costs of the expedition, the rescue and all the medical treatment. This is because if the doctor had made the correct diagnosis the mountaineer would never have gone on the expedition in the first place, and therefore wouldn’t have suffered the subsequent injury, paid for the expedition or needed to be rescued.
So should indemnities ever be accepted?
There are certain areas where they’ve generally become accepted by lawyers as being appropriate – such as in a Practice merger and relating to TUPE transfers. Typically, the disposing practice agrees to indemnify the acquiring practice for any employment claims arising during the period before the transfer.
Legal advice should always be sought before binding yourself into an indemnity. A good solicitor would review the wording of the indemnity to ensure it is not unduly onerous. For example, in the case of TUPE transfers, an indemnifying practice should retain the right to defend and settle the claim itself, rather than simply committing to pay whatever is being asked of them by the other party.
Conclusion
Negotiation of contracts generally has little to do with what’s fair or unfair and much more to do with the negotiating strength of the parties. Often any party of whom an indemnity is requested is in such a weak bargaining position that they find it difficult to resist the request.
Although it’s easier said than done, it’s always better to negotiate from a position of strength. In the context specifically of GP practice mergers, if you can see a time in the next few years when it’s going to be necessary to find someone to take over your practice, do it sooner rather than later and try to keep a ‘Plan B’ in the background throughout.
If you have any questions about indemnities or any other queries relating the running of your primary care practice, please don’t hesitate to get in touch with one of our specialist team of expert solicitors. Please call 01483 511555 or email d.robertson@drsolicitors.com
News
NHS Property Services: Is the end in sight for GP tenancy disputes?
NHSPS put itself back in the spotlight recently, by announcing its intention to increase service charges and facilities charges for GP practices who request changes associated with Covid-19. This will undoubtedly add fuel to the many ongoing disputes over demands for increased service charges. The vast majority of our GP clients who occupy NHSPS owned and managed buildings have been living with a stalemate for the last couple of years, which is causing a variety of problems as time marches on.
The DHSC recently published its review into the current state of NHSPS. You can read the summary here and in this blog, we look at what the recommendations might mean for practices occupying NHSPS buildings.
- For readers who have been hoping that NHSPS would just go away, I’m afraid that won’t be happening anytime soon! There was found to be no benefit in divesting NHSPS of its functions, but rather a recommendation that it align itself more closely to the commissioner footprint and work more closely with NHSE. Having your commissioner and your landlord work more closely together could work either way for practices. One possibility would be that NHSE, as the ultimate funder, agrees to pick up a greater share of the disputed costs. Perhaps more likely though, is that NHSPS and NHSE will put increased pressure on practices to ‘pay up’ by turning the tenancy dispute into a GMS/PMS contractual dispute. This is one to watch carefully.
- NHSPS have been told (again) to regularise all their tenancies. This means that the pressure on GP tenants to sign up to leases will continue, but unless there is a resolution to the service charges issues most practices will continue to be reluctant to sign anything.
- The DHSC recommends that NHSPS “must make progress in customer sectors not currently engaged and ensure that agreement of FM-service and specifications, utilities and management charges are also covered”. In other words, the issues around increased service and facilities charges must be sorted out.
Readers may be aware of the ongoing High Court test case brought by the BMA on behalf of 5 GP Practices to challenge the legitimacy of some of the claimed charges. Whilst this has probably temporarily chilled NHSPS’s enthusiasm for chasing ‘arrears’, and some Practices may also have paused the process for reaching agreement on claimed charges pending the outcome of this test case, the case is unlikely to resolve soon.
The problem for practices though, is what to do about the large NHSPS liabilities now sitting on their balance sheets? As partners come and go this liability becomes a larger share of their capital accounts. We are seeing retiring partners ask why should they leave their capital behind for a liability that no-one believes is really owed? Practices should check to ensure that this question is fully addressed in their Partnership Deed, or alternatively create a separate agreement with retiring partners.
- Potentially the most significant recommendation is ‘to explore & implement changes to the funding mechanism where it will not fundamentally undermine the user-pays model, including central funding of management fees, elements of structural and external maintenance and greater use of direct payment of property costs by commissioners‘. This suggests that there may be opportunities for doing deals where the commissioner pays some or all of the service charges – both historic and possibly ongoing – as a means of breaking the deadlock.
Whilst the offer of somebody discharging your historic service charge liability (and possibly some of the future costs) might be tempting, it is likely that it will come with the strings attached including that you sign up to a new lease. We are very wary of the small print on this one!
So, has our advice to affected clients changed? In short, no. Practices should normally only sign up to a new lease once they are happy with the terms and once any historic service charge issues have been resolved. Even then, Practices need to understand their current legal position as regards their occupation of the premises before being able to make an informed decision about what does and does not constitute a ‘good deal’. This is a complex area and one with lasting financial implications for the sustainability of the practice.
When you are ready to start negotiating with NHSPS we strongly advise you seek specialist legal advice, but in the meantime, practices should agree and document how they will deal with the claimed service charge liabilities as the partnership changes over time.
We have a team of specialist property and partnership solicitors who all have deep expertise in advising primary care professionals on their premises issues. If you would like to speak to one of the team, please call Daphne Robertson on 01483 511555 or email info@drsolicitors.com
News
PCN Incorporation: The Why and the How
PCNs were set up at great speed last year. They were usually established as a cost-sharing arrangement between practices that had signed the PCN DES. This has worked well but problems are beginning to emerge as PCNs gain scale. This video blog examines the various emerging issues, and explains how incorporating a PCN can address many of them. It also explains the steps you will need to take to incorporate your PCN.
There are currently very few incorporated PCNs, but many of our PCN clients see this as a logical next step in their development. Watch this vBlog to understand why.