PRACTICE MATTERS  PARTNERSHIP AGREEMENTS A


GP partnership is a formal business arrangement and the terms under which it operates should be clearly


documented. A recent English Court of Appeal case has highlighted the risks that can arise when a GP partnership does not have an up- to-date partnership agreement in place. In the particular case described below, the lack of an agreement meant that there were very limited rules governing the partnership, including how it could be ended. The legal interpretation in each situation will depend on the specific facts, and specialist advice should be sought. However, the Court’s judgment provides an interesting overview of key issues and reinforces the strong recommendation to have a current partnership deed in place, reflecting any changes in the partnership.


SETTING OUT TERMS Disputes within a GP partnership can arise for many different reasons. Common causes include conflict between property owning and non-owning partners (landlord/tenant disputes) and when partners retire or are removed from the partnership. A signed and up-to-date partnership


agreement or partnership deed is a key document to record the terms on which a GP partnership operates. It sets out the arrangements between the partners and what should happen in a range of scenarios, such as when a dispute arises or a partner leaves. However, the reality is that many GP partnerships change and develop without having a current, or indeed any, partnership deed in place. This can arise when new incoming partners are negotiating over appropriate terms or, simply because limited


DEED OR


Solicitor Daniel Kirk considers the value of having a partnership deed in light of an English Court of Appeal case involving a dispute among GPs


available time and the demands of the ‘day job’ mean that a partnership deed was not considered or completed. A partnership agreement should be seen as a “living document” and kept up-to-date with all changes affecting the partnership. Having a deed in place does not prevent disputes occurring but it reduces the risk by giving greater certainty about the agreed terms within the partnership.


CHEEMA V JONES: BACKGROUND Although most partnership disputes do not end up in court, they can nevertheless be time consuming, costly and stressful for those involved. The lack of a partnership deed made this even more so in the case of Cheema v Jones. A summary of the case is interesting as it shows how things developed into a significant dispute due to a lack of clarity on partnership terms.


Dr Cheema, a salaried partner, was invited


to join a partnership with Dr Jones when another partner retired. They signed a written partnership agreement on 8 April 2016. Dr Cheema and Dr Jones then discussed taking on three new partners to expand the practice.


There was one formal meeting between four of the five proposed partners on 21 April 2016 and solicitors were instructed to prepare a draft partnership deed. The GMS contract was varied to a partnership of five with effect from 1 July 2016 and the GPs started working at the practice but the draft partnership deed was not finalised. Partnership meetings were held in July and August with all five partners but in August 2016, Dr Cheema and Dr Jones fell out over allegations concerning Dr Cheema’s fitness to practise. He was refused access to patients and sought a court injunction to allow him to return to work. The relationship between Dr Cheema and the other partners broke down. A dispute arose over the nature of the partnership in place. Either that: (i) the Dr Cheema and Dr Jones partnership of 8 April 2016 remained in place; or (ii) a new partnership between the five GPs arose as a ‘partnership at will’. A ‘partnership at will’ can arise where the partners have not agreed other terms. Here the Partnership Act 1890 applies and incorporates very limited terms into the partnership, such as any partner can


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SPRING 2018  ISSUE 18


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