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How to ... Deal with partners falling out

Try to resolve differences, because the price of splitting up a practice can be high.

Acrimonious partnership splits can be expensive and unpleasant. So when partners fall out, take action quickly to resolve problems or negotiate an amicable parting of the ways.

Update the partnership deed
The partnership agreement should cover the worst-case scenario and include a dispute-resolution procedure.

All the current partners' names should be listed together with any changes in the way work is carried out. For example, include clauses to take into account changes to the GP contract (see box).

Justin Cumberlege, a solicitor specialising in primary care at London firm Carter Lemon Camerons (www.cartercamerons.co.uk), says: 'If you start with a well-drafted partnership deed, you're going to be a lot further ahead in reaching an amicable settlement.

'If you have a problem, the first thing you should do is turn to your partnership deed which, hopefully, will have the solution.'

Get help quickly
Your LMC can provide a mediator to help you discuss the issues and find out if the partners can overcome them. 'You might find that there are pressures outside the business which are causing problems within the business,' says Mr Cumberlege.

He cites childcare difficulties as an example, adding that there could be a relatively easy solution.

Binding dispute resolution
If relationships become irreparable and partners cannot agree amicable or mediated separation, you may need to use a binding dispute resolution procedure: arbitration or going to court.

Many deeds stipulate that arbitration must be used, but this is expensive because you pay for legal representation plus the arbitrator's time. In a court case, at least the judge's time is free.

Mr Cumberlege says: 'Both parties could agree that arbitration is too expensive.'

Disputes about money
Seeking advice from an independent medical specialist accountant, who can give an opinion on normal accounting treatment can be helpful.

Jenny Stone, a partner at accountants Ramsay Brown & Partners (www.ramsaybrown.co.uk), says: 'At some practices the senior partner may be very friendly with the practice accountant. So having somebody independent who can look at the figures and give their opinion might help resolve a problem without going to solicitors.'

Performance issues
Disagreements can arise around perceived performance issues. Some partners may think another partner's standards of care are not high enough. Or a partner may have a health problem that is affecting their performance. In these cases, speak to your LMC, says Dr John Grenville the secretary of Derbyshire LMC.

'Don't be surprised if the LMC suggests the primary care organisation (PCO) should be involved,' he says, explaining that clinical governance may need to be considered and, in severe cases, the GP referred to the GMC.

Avoid litigation
In some instances partners just do not get along, take up uncompromising stances and start court procedures.

Dr Grenville says: 'They start litigating and they lose loads of money. Never let it get to that stage because it takes an awful lot of time and money.'

Splitting the practice
If there are going to be major changes in the provision of services, such as the partnership splitting down the middle or a partner moving on to practise elsewhere, the PCO must be involved. With PMS practices, the PCO may decide to withdraw the contract altogether.

With GMS practices, if one partner splits off, their former partners get the whole patient list, but if a two-GP partnership splits, the PCO will decide which GP will keep the GMS contract, or whether to withdraw it altogether.

A cautionary tale
Lynne Abbess, a partner at solicitors Hempsons (www.hempsons.co.uk), dealt with one practice whose deed was up to date to the extent that it listed all of the partners. She relates that there had been no partnership changes since the late 1990s, but the practice had not updated the deed in light of the new GMS contract.

One of the partners was not doing anything towards achieving quality framework points and for some time the other partners had discussed how to get rid of this GP. They found an expulsion clause in their partnership deed which said they could ask a partner to go if this is in the partnership's best interests.

They served a notice of expulsion on the GP, but received a letter from his solicitor saying it was an invalid notice and he would be claiming damages. The dispute cost the other partners £50,000 in legal costs and paying the GP to leave on top of buying out his premises share.

This could have been prevented by updating the deed to spell out under the partnership obligations clause what each partner was required to do to maximise the business's income.

Failure to comply could be grounds for expulsion. The deed could also have included a clause which would have entitled them to serve notice on a partner requiring them to leave without having to justify any ground.

Ms Abbess says: 'The new contract was an ideal time for people to update their deeds, but a lot didn't take the opportunity to do it.'

Jennifer Taylor

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