In a perfect world, dentists their associates and their hygienists would work alongside each other in perfect harmony.
For those principals in the fortunate position of having this relationship based on mutual respect or even friendship, it is sometimes easy albeit erroneous to assume that a verbal working agreement will suffice. However, it is important to formalise this working relationship in a written agreement, not only in order to resolve ambiguity and eliminate confusion in the practice, but also to provide all parties involved with a legal point of reference should any disputes regrettably arise. In addition these agreements provide evidence of the terms of the relationship should that ever be challenged by HM Revenue and Customs.
An Associate’s agreement is necessary where one dentist practices under licence from another. Both dentists are independent contractors, but not partners or expense sharing principals. A well-drafted associate agreement will cover issues including ownership of goodwill, financial arrangements, fee assignments, bad debts, termination, non-competition and dispute resolution.
Without written associate and hygienist agreements in place, a practice is exposed to all manner of potential difficulties, which can be dealt with effectively by the provision of a professionally drafted contract with the help of a solicitor. Consider how you would deal with an associate or hygienist who was away from work due to ill health, or how you would address their underperformance of UDA targets. Should a colleague propose to set up a practice in competition with your own, or if they produce negligent work, you need a legal safety net to clarify everyone’s duties and obligations.
It is important to note that there is no one size fits all solution to the agreements between practitioners and their associates and/or hygienists. This is because different contracts are needed for different practices from those who are exclusively NHS, to private practices, to those specialising in cosmetic and restorative dentistry. Expert solicitors will always consider the unique situation of the individual practice before drawing up an agreement.
Associate and hygienist agreements usually cover but are by no means limited to the following points:
- A barring-out clause is a common inclusion in an associate agreement in order to prevent unfair competition from a rival practice being set up in the near vicinity. However, this needs to be fair to be enforceable as the courts work from the basic principle that contracts restraining trade are not to be enforced unless reasonable as to duration and geographic scope. What is deemed as ‘reasonable is different in every case. Consideration needs to be given to emergency arrangements, for example in the case of the death or serious illness of an associate and what will happen to their patients as a result.
- Safeguards must be put into place in case the practice should run into financial difficulties.
- Expense sharing and profit sharing agreements, which avoid disputes.
- Any NHS Allowances for maternity pay, sickness leave and pay, and course allowances must be taken into consideration.
- The potential pitfalls of fee assignments should be addressed. Here, money earned by the associate is paid directly by the BSA to the practice principal, who then pays the associate by taking off their own percentage and laboratory fees.
- Rights and responsibilities of partners.
- Shared practice premises, equipment, employees and/or other expenses.
It is always advisable to consult experts on the range of options available and have them analyse your particular situation to find the best arrangement for you. They are experienced in tailoring agreements to the specific needs and requirements of each unique practice and aim to build up a good relationship with the client. This enables them to advise all parties on the most advantageous arrangements for them in the long run.
Ray Goodman of Goodman Grant Lawyers for Dentists
For more information please contact Ray Goodman on 0151 707 0090 or by email RNG@goodmangrant.co.uk