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Partnership disputes – the early warning signs

Partnership disputes can be expensive, time consuming and destructive; not to mention unpleasant for all parties involved.

If you find yourself having to deal with a partnership dispute, the best protection for any practice is to have a valid partnership deed in place.

To help you spot the early warning signs of a potential dispute, we have pulled together a list of some of the most common causes of partnership disputes:

  • Underperformance: Partnerships are based on the principles of trust and fairness. Negative feelings can start to creep in, if there is a perception that one partner is underperforming. For example, if they are perceived as not pulling their weight, have a lack of attention to practice management responsibilities, or exhibit poor time keeping and organisational skills.
  • Money: Financial concerns are one of the most frequent causes of disputes. They can range from arguments over alleged financial impropriety, to non-property owning partners paying for building costs, the sharing of outside earnings, or the profit share to workload ratio.
  • Unacceptable behaviour: Disputes can arise when a partner is considered by others to be behaving in an unacceptable way. Examples of this include: bullying, harassment, discrimination, inappropriate use of computer systems (sometimes even during consultations) and self-prescribing.
  • Clinical concerns: Every clinician has a professional obligation to report any clinical concerns they may have. By themselves, these issues won’t necessarily lead to a partnership dispute. However, problems can arise when clinical issues are covered up, reveal a lack of insight, or if they put a partner’s GMC registration at risk.
  • Personality clash: Personality clashes can fester for years. Such disputes are usually best dealt with through mediation and the LMC can often help in such circumstances.  However, successful mediation requires that the partners in conflict demonstrate insight and work on changing their behaviour, which can sometimes be difficult.
  • Sickness absence: When a partner is frequently off sick, or takes a long period of sickness absence, this can contribute towards a feeling that they are not ‘pulling their weight’. A locum can be used to backfill but they will not be sharing any of the management workload, which means extra pressure is felt by the remaining partners.
  • Generational differences: Generational interests are sometimes not aligned. For example, a partner nearing retirement may be keen to preserve capital and minimise unnecessary change, whilst a younger partner may be keen to invest in new premises or different working patterns. Disputes of this nature can lead to issues with 24 hour retirement planning, or even age discrimination claims.
  • Surgery Premises: Incoming partners are showing less interest in buying into surgery premises than they did in the past. They are also often unwilling to sign up to a long lease. This can cause problems for other partners, who may be keen to move on or retire and are unable to divest themselves of the property interest.

Why your partnership deed is important

A well drafted partnership deed can help minimise the disruption caused by a dispute or avoid the dispute altogether. It will seek to anticipate many of the issues mentioned above and provide an agreed framework for resolving them.

For example, it can state grounds for expelling a partner; document the terms of absences from the practice; ensure that all partners have the right to 24 hour retirement; and specify a dispute resolution process.  Importantly, it can also prevent a partnership from being dissolved in the event of a dispute, as this can put the GMS/PMS contract – and therefore the practice – at risk.

Our recommendations

If you are unlucky enough to find yourself in dispute with your partners, then make sure you seek professional legal advice at an early stage. It is important that you know where you stand legally, so you can avoid doing anything which may compromise your position.  Fortunately, most partnership disputes will be settled without the need for litigation. In the meantime, please ensure you have a valid and up to date Partnership Agreement.

For more expert advice, download our free guide: ‘Top 10 tips for dealing with partnership disputes‘.

For more information about Partnership Agreements or disputes, please contact Daphne Robertson on 01483 511555 or email d.robertson@drsolicitors.com