Preparing For The Worst – Death of an NHS Contractor

It is widely known to NHS dental contract holders that there is no right for a contractor to sell, assign or otherwise dispose of the benefit of any rights under the contract. This has not, however, prevented NHS practice owners in the main from selling their practices.

But what happens on the event of their death?

A dentist who has spent time and effort building up a practice is naturally going to want to be able to pass its value on to their family, much like they would with anything else they own – and why not?

So, if you are a practice owner, have you thought about how you would do this? 

A new policy released by NHS England in March 2014 states that on the death of an individual contractor, a contract will terminate 28 days later unless the family or personal representatives take steps to prevent this. If you were honest with yourself, how much knowledge does your family have of the business of dentistry? Would they know if you held a GDS or PDS contract? Would they even know where to find your contract? Even if you kept your family involved in the affairs of your business, 28 days coupled with the grief of their recent loss does not leave much time to organise your affairs.

The 28 day period can be extended by engaging the Local Area Team (LAT) and your contract manager. Your personal representatives should give notice in writing to the LAT of your death, together with a request to extend the contract for a further six months after the expiry of the 28 day period. This allows a total of seven months reprieve before the contract is terminated. 

If there are associates or performers at the practice then the LAT must also be informed of this. If there are no dentists at the practice able to perform the UDAs under the contract, then the LAT can be informed of the intention to engage a dentist to assist with the provision of UDAs.

Having assisted dentists buying or selling NHS dental practices for over 25 years at Goodman Grant, we know that the average time for the sale of an NHS practice is six months. This is strictly on the basis that a buyer has already been found and the principal dentist is on hand to deal with the onerous amount of sector specific enquiries.

In the event of your death, it is highly unlikely that your family will be able to complete the sale of your practice within that time frame. Luckily, if they can find a dentist to take over the contract then the LAT can be notified of this, allowing a further six months to deal with the affairs of your practice. This extension will need to be agreed between the LAT, your family/legal representatives and the incoming dentist. This should be sufficient time for a buyer to be found and for the practice to be sold.

HOWEVER, all of this can be avoided with a little forward planning. 

The strict timescales detailed above do not apply to a contract held by more than one dentist. On the death of one partner, the contract will not be at risk of automatic termination. The contract will continue to be held in the name of the surviving dentist who should notify the LAT of the death of the other dentist. 

Before you rush ahead and add another dentist to your contract you must assure yourself that you have adequate protection to ensure that the incoming dentist does not run off with your goodwill! 

It is therefore crucial for you to have provisions in place by way of a Partnership, which can deal not only with the issue of ownership, but also ensures that the dentist you have taken into partnership will cooperate in any sale. By taking this step you can ensure that if the worst happens you need not lose the goodwill value of your practice.

The partnership agreement requires specialist drafting and should only be carried out by a legal team with intricate knowledge of the GDS regulations. They will also need to give 28 days notice to the LAT of your intention to take on a partner and advise you in relation to amending your CQC registration.

For further information on Goodman Grant’s bespoke partnership service including CQC registration please contact Hewi Ma.

Hewi Ma of Goodman Grant Lawyers for Dentists

For more information call Hewi Ma on 0113 8343705 or email

hm@goodmangrant.co.uk

www.goodmangrant.co.uk


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