Five years ago, the High Court set a far-reaching precedent that practice owners, particularly those holding NHS contracts in England and Wales, can be held to be vicariously liable for the actions of their self-employed associates.
What happened?
A legal firm pursued former practice owner, Dr Raj Rattan, for compensation despite his indemnity provider being willing to respond on behalf of the three self-employed associates involved in the case. Judge Heather Williams QC concluded that, although the practice owner did not determine how the associates carried out the treatment, the practice owner was vicariously liable because the associates could not be said to be operating a truly separate business.
The practice owner was said to have dictated that associates provide treatment as Performers under the terms of the GDS contract, abide by the practice policies and procedures, work within the operating hours of the practice when nurses and receptionists were available, and leave the goodwill with the practice upon leaving their associate position.
The associates also relinquished the right to practise in the immediate vicinity of the practice on departure, or to treat any patients of their former practice whether or not they had ever treated them personally. They could not therefore be said to be operating a separate business.
Some commentators have incorrectly claimed that this decision can be extrapolated to all treatment in every practice and every practice owner-associate relationship. This is not true.
It only applies to NHS practice owners in England and Wales, as the judge did not feel she had to decide whether that non-delegable duty applied to purely private patients. Members in Northern Ireland and Scotland, while not immediately impacted by this decision, should be aware of the precedent which it may set for cases taken in their jurisdictions.
Practice owners cannot have it both ways
This is a worrying decision for many NHS practice owners. The arrangements Dr Rattan carefully and diligently set up reflect what practice owners do up and down the country, and have done for decades. The ‘control’ applied by Dr Rattan in his successful family practice, allowing the associates the clinical freedom they relished to treat patients as they saw fit within the guidelines and evidence-based clinical governance principles that he established, was in reality very light touch. Dr Rattan never saw or treated the patient himself.
Like any other practice owner who had invested heavily into a practice and its success, Dr Rattan was keen to protect the commercial interests of the practice and he can hardly be criticised for that. But that very protection simultaneously undermined any proposition that the associate was a free agent, operating a distinct business. The clear message for practice owners is that you cannot have it both ways.
Many high street practices operate in similar ways. The alternative universe offered by this judgement is far stricter oversight of the diagnosis, management and clinical care and treatment delivered by associates, alongside appraisals, rigorous audit and quality control in an NHS practice. That level of control is a factor that could point away from associate dentists’ self-employment status. Neither party probably wants this.
The only winners here are the claimant law firms.
Patients are not better protected
This case is not a victory for patients, as some have claimed. Dentists have a legal and professional obligation to hold indemnity, but in this case the lawyers deliberately chose to disregard this and pursue the practice owner instead. Indeed, this patient’s lawyers went after a dentist who never saw or treated her.
Legal gymnastics were applied in this case to show that practice owners have a non-delegable duty to every NHS patient who crosses the threshold of their practice. Our position is that the associate dentist who carries out negligent treatment and their indemnity provider should really be the only party claimed against.
Passing the buck helps no one. It is against both the public interest and the well-established professional and ethical obligation to take responsibility for one’s own actions. Associates could look for lower indemnity costs if the practice owner is to be held responsible. Patients, like this one, have a lengthy wait aiming for compensation. The only winners here are the claimant law firms.
Looking ahead
Currently, the GDC only requires registrants to hold adequate and appropriate indemnity for their own actions, not those of third parties. This may now be reconsidered. However, practice owners being held liable should be the exception not the rule.
This judgment should not be a passport for claimants' lawyers to bring lucrative actions against both the practice owner and the treating associate dentist in parallel proceedings which only serve to generate greater fees for themselves. What we have now is a zero-sum game where no one wins, not even the patient.
Our associate agreement was front and centre in the deliberations of the judge and it remains one of the mainstays of defining the relations and responsibilities of the practice owner and associate. We believe a number of problems can be avoided if an associate gives written authority for the practice owner to act on their behalf after they leave the practice, so we adapted the template to reflect this. Now our associate agreement gives members – practice owners and associates alike - some peace of mind in these changing times.
