Our Professional Practices team have particular expertise in advising general medical practitioners on the terms of their medical partnership agreements and on partnership issues generally.
It is extremely important in our view that general medical practices which are structured as partnerships do have a properly drafted medical partnership agreement in place and that this is kept up to date as circumstances change. The BMA Guidance on this subject contains similar recommendations.
Various problems can arise in practice if there is either no partnership agreement in place or if the agreement is inadequate or has not been updated to include new partners or other changes. For example, if the practice does not have a written partnership agreement then a "partnership at will" can arise governed by the archaic provisions of the Partnership Act 1890. This can have unwelcome consequences such as giving any partner the right to dissolve the partnership on notice or triggering an automatic dissolution of the partnership on the death of a partner.
If a new partner joins the practice but does not formally sign up to the partnership agreement then it may be difficult for the existing partners to hold that new partner to the terms of that agreement if there is a dispute in the future.
Where the practice includes partners who are not general practitioners then some of the provisions in the Partnership Agreement may not be appropriate to them. Ideally the agreement should make clear where particular provisions only apply to some of the partners but not all of them.
Although many of the issues which apply to medical partnership agreements apply equally to other types of professional partnership, there are particular aspects which are unique to medical partnerships which need to be considered. For example, the terms of the partnership need to be considered in conjunction with the practices’ GMS or PMS contract and the implications if a partner retires or dies. The agreement also needs to make clear which income will be treated as partnership income as against the personal income of individual partners, and likewise which expenses will be charged to the practice or to an individual partner. Particular arrangements apply for the funding of pensions under the NHS scheme which will apply to the partners and staff of the practice and these need to be properly addressed in the partnership agreement. Very often medical partnership agreements will include particular provisions for study leave, sabbaticals, maternity leave and other absences with the requirement for locums to be appointed to cover. These arrangements and the funding implications arising in each case all need to be considered.
Many GP practices will own the freehold of their surgery although the capital value and any associated loans may sometimes only be held by some of the partners in the practice rather than all of them. It is essential that the partnership agreement clearly sets out how a partner’s interest in the surgery will be dealt with if he or she retires or dies so as to avoid disruption to the practice but also to ensure that the outgoing partner receives a fair value for it. This may involve giving the continuing partners an option to purchase the outgoing partner’s interest at market value based on specified criteria or assumptions.
Our Professional Practices team not only include lawyers who have expertise in drafting partnership agreements and other ancillary partnership documentation, but also lawyers with experience of dealing with partnership disputes should an issue arise which the partners cannot easily resolve between themselves.
We also have specialist lawyers covering areas such as tax, property, pensions and employment law all of which are relevant for general medical practices.
"A first class job - many thanks for guiding us through the maze of legal procedures. It was a tremendous effort on your part."
Mr Philip Kennedy - Managing Director
Eschmann Technologies Ltd