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Former partner

In 2007 I became a partner at a practice that had previously been single-handed. I did not sign a partnership deed. A few months later, my partner was suspended by the PCT. It then asked me to run the practice and paid a weekly locum allowance to the practice on top of the GMS funding. The practice operated with the help of various locums. My partner remained suspended for several months, then resigned. In the absence of a partnership deed, the accountant prepared accounts and divided the profits equally between us. Can you advise whether my ex-partner is entitled to seniority pay or does it belong to the practice? We did not inform the PCT in writing about how seniority payment should be distributed at the time of forming the partnership. Likewise should the locum allowance be divided?

At the time you joined the practice, presumably there had been some discussion over terms, including seniority payments, even though you did not get as far as signing a partnership deed.

While a partnership deed provides the weightiest of evidence of the agreement reached, other evidence may still be relevant.

If in fact there was no agreement about the seniority payment, I can confirm that as a matter of 'custom and practice' it is more usual for seniority payments to be treated as belonging to the individual concerned rather than to be pooled.

The question of the locum payments may be more uncertain as it is less likely you would have considered this issue in advance. That said, in the course of agreeing a partnership deed, it is one of the issues that should have been addressed. Perhaps there was discussion about it?

If not, once again, under custom and practice, it is more usual for the suspended partner to retain the locum payment (90 per cent of usual earnings) and the remaining profits to be applied first to discharging locum (and other) expenses, then divided among the partners. That said, a strict interpretation of the Partnership Act 1890, would suggest the accountant is correct to simply pool the locum payments with the other practice income and divide it equally.

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