In any business, there are times when taking expert legal advice is essential to avoid expensive complications and disagreements. In dentistry that necessity can be especially pressing, and the peculiarities of the system makes it vital that specialist lawyers are used.
While all industries can involve complicated contracts and property ownership issues, many of them are unique to dentistry. Legal experts who specialise in other areas of industry will not have encountered them before, and will not benefit from the specific experience and knowledge required to deal with, for example, the sale of a dental practice.
While larger corporate groups continue to expand, the dental sector still essentially consists of lots of small businesses, usually managed by the founder or founders. Dental practices can be owned and managed in a number of different ways: partnerships, expense-sharing agreements, or incorporated practices, for example.
Any sale of such a business, or an acquisition made by one, must be handled appropriately for the way the practice is structured. A legal expert who had extensive experience in, for example, the manufacturing sector would not be aware of the strategy required to transfer an NHS contract.
Employment status is often unclear in the dental sector, too. Many practitioners consider associate dentists to be self-employed. Though in some, if associates are considered to have employed status it raises significant issues, such as the entitlement to maternity pay, paid holidays and redundancy payments if their services are no longer required. A Properly advised buyer will require protection from claims arising from such issues.
The situation is further compromised if any General Dental Services contracts are held by associates, rather than by the practice principal. It is often the case that, for historical reasons, a practice may have more than one contract and this is sometimes held in the name of the associate. If this is the case, he or she might be entitled to financial consideration if the principal decides to sell the practice. The situation could be further complicated by any question over whether the associate is self-employed or an employee of the practice.
An increasing number of incorporated practices are coming on the market. Often when we carry out due diligence on such practices on behalf of buyers we discover that the incorporation is flawed as the seller’s advisors have not understood the very specific issues that need to be addressed when incorporating a dental practice and much work is then needed to remedy the position before the practice can be transferred.
All of these issues simply reinforce the need for a suitably experienced legal adviser.
Ray Goodman and John Grant of Goodman Grant Lawyers for Dentists – NASDAL and ASPD MEMBERS