GP partnership disputes: key considerations

POSTED BY ROB DAY | 11 JULY 2023

| 1 min read

Disputes between partners are often complicated, time-consuming, costly and stressful for the individuals involved. Even at the best of times, relationships between partners can be intense and pressurised. Add a global pandemic and spiralling pressures on general practice and it’s no surprise that we’re seeing a rise in disputes within GP partnerships.

In this article, we set out our approach to managing a dispute – a robust Partnership Agreement is the key but when you find that is not in place or it doesn’t provide a clear solution, we explain what you need to consider going forwards.

Key considerations

What’s the problem?

Sounds an obvious question but we need understand the specific issues giving rise to the dispute. Does it concern partner absence, conduct issues or personality clashes for example?

What tends to be the best approach, and can save a huge amount of time, is the preparation of a chronology of events covering the key acts, omissions and communications between the partners. This helps distil thinking and can be used as a reference point when it comes to considering the stage of the dispute, the duties and obligations that may have been breached and the likely next steps.
What are the obligations/duties?

Armed with the chronology of events we would then look to see if the acts or omissions of the partner(s) constitute a breach of any express or implied duties and/or obligations under the Partnership Agreement or in law generally (such as the duty to act in good faith).
Is there a Partnership Agreement in place?
Yes
- A review of the terms is required to assess whether the issues encountered represent a breach of those terms and (if so) what can be done about it.
No
- The dispute would need to be handled with exceptional care as the partnership is likely to be considered a “partnership at will” and governed by the Partnership Act 1890 with its less than helpful provisions when it comes to the expulsion of partners (in that this is not something it allows without bringing the partnership to an end) and/or dissolution (which any partner can do by serving notice of dissolution on the other partners).
Is there a dispute resolution procedure?

Only relevant if a Partnership Agreement is in place; we would always consider what provisions exist when it comes to handling the dispute. Whether the agreement provides for mediation, arbitration or some other dispute resolution mechanism, we would always look at both the provisions that must or indeed may be followed in order to try and address the issues giving rise to the dispute and/or those that must or may be followed if a partner ultimately challenges any decision to suspend or expel a partner.
Is there a right to expel a partner?

This is only relevant if there is a Partnership Agreement in place, we would look to see whether any of the acts or omissions constitute grounds upon which the partner(s) could be expelled from the partnership.

In short, is there an express provision in the Partnership Agreement which stipulates that the acts/ omissions of the partner(s) constitute a ground upon which they can be removed?
Is there a “green socks” clause?

Beyond looking at whether the acts or omissions of the relevant partner(s) constitute grounds for expulsion given the express terms of the Partnership Agreement (usually called “fault grounds” for expulsion), we would look to if there are provisions enabling a partner or partners to be removed from the partnership on non-fault grounds. This is often called a “green socks” provision (as you could effectively remove a partner for the colour of their socks) but generally this is used where the acts and/or omissions of the relevant partner(s) are insufficient to constitute a ground to expel on fault grounds but are considered sufficient enough to constitute an irreparable break down in the relationship between the partners.
Is there a right to suspend a partner?

Before taking any formal steps to expel, it may be appropriate for a partnership to investigate allegations that give rise to an actual or potential partnership dispute. This may include, without limitation, allegations of impropriety or misconduct.

Partners may only suspend one of their number if there are express provisions within their Partnership Agreement allowing them to do so. It would be essential to consider if such a right of suspension exists and if so, what conditions apply. This may include, the length of suspension, the ability to refuse them access to practice premises, the ability to cut access to their emails, the ability to prevent interaction with staff members whilst on suspension etc.
What process must be followed to suspend/ expel a partner?

Assuming there is a right to expel/ suspend, we would be mindful to check that the correct process is adopted to instigate the same. Does a meeting of partners need to be called? If so, is there a set process for calling that meeting (notice requirements, time frames, locations etc.). This is important if we are to ensure that the decision is not capable of challenge on procedural grounds.
What is payable to an outgoing partner?

Whilst more of a post expulsion / removal consideration, we would always factor in whether there is certainty on what would ultimately be payable to any outgoing partner or at least how that will be determined.

This is an important point as it goes to the heart of whether a further bone of contention could arise even after a partner or partners are successfully removed, and if so, what can and/or should be done to address the same.
Can we compel outgoing partners to sign documents?

Again, more of a post expulsion/ removal consideration, we would be careful to check whether outgoing partners can be compelled to sign documentation (such as contractual variations required by Integrated Care Boards) to realise a position where contracts and assets vest in the names of the continuing partners. If an outgoing partner refuses to sign such documentation (which is not uncommon given the circumstances that usually give rise to their departure), we would be keen to check whether provisions exist within the Partnership Agreement which allow one or more of the continuing partners to sign on the outgoing partner’s behalf as their attorney.
Is there an ability to strike a deal?

This is usually considered only after we have full visibility of the facts (and have considered the above); an obvious consideration is whether the dispute could be brought to an end more swiftly by offering a financial or other deal to partner(s).
Navigating the road to dispute resolution

If a partnership dispute does arise, there are many ways to resolve it whether it is through negotiation, facilitated discussion, mediation or arbitration and court proceedings.

Handling a dispute can be a stressful experience that needs careful planning and an ability to respond quickly as facts evolve.

Get in touch

We can support you with:

Your partnership dispute – we’ve supported several partners/partnerships in successfully navigating their disputes
Revisiting your Partnership Agreement to ensure it’s up to date and sufficiently robust to withstand a partnership dispute

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Every piece of content we create is correct on the date it’s published but please don’t rely on it as legal advice. If you’d like to speak to us about your own legal requirements, please contact one of our expert lawyers.

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Rob Day

Partner
Rob Day

Partner
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GP partnership disputes: key considerations

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