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Practice owners and dentists remain at risk after Appeal Court judgment

Both parties have claimed victory following a judgment handed down on Friday 4 February 2022 from the Appeal Court in the Hughes v Rattan case

Len D'Cruz
Len D’Cruz Head of BDA Indemnity

This followed from a High Court judgment where the judge found that the practice owner had a non-delegable duty to patients who attended his practice and that he was also vicariously liable for the negligent actions of self-employed associates who treated patients in the practice despite not ever treating them himself.

The three Appeal Court judges were asked the simple question - was the practice owner liable for the acts and omissions of self-employed associate dentists either through a non-delegable duty of care, or though vicarious liability? One or the other places the liability with the practice owner.

The judges agreed with the High Court judge that the practice did have a duty of care to the patient.

Vicarious liability

Having carefully considered the argument put to them by barristers representing Dr Rattan and the patient Mrs Iris Hughes, the judges agreed with the High Court judge that the practice did have a duty of care to the patient.

Having concluded that they didn't need to decide on the second ground (vicarious liability) but having been asked to do so, the Court examined whether the relationship between the practice owner and its self-employed NHS associate dentists with a BDA template contract could be "akin to employment".

If so, then the practice would be liable on both counts i.e. of having a non-delegable duty to the patient as well as a vicarious liability.

After reviewing the arguments put forward by Dr Rattan's counsel the judges concluded, on balance, that the High Court judge was wrong to conclude that the associates were an integral part of Dr Rattans business and were not running a business of their own.

They decided that on the basis of a number of factors, that in the present case, the relationship was not akin to employment. Some of these factors included the associate dentist being free to work at the practice for as many or as few hours as they wished, to work for other practice owners, exerting no control over clinical judgements made by associates, the free choice to select their own laboratory, paying their own tax and having their own professional indemnity insurance and buying their own uniforms. Because of the freedoms the associates arguably had in this practice, Dr Rattan was not vicariously liable for their actions if they carried out negligent treatment.

It remains unclear however, whether this case is sufficient to argue that a purely private practice owner escapes the NDD.

A victory for practice owners?

On the face of this it sounds like a victory for common sense and endorsement of the age-old relationship that has existed for many decades between a self-employed associate and a practice owner. The actual answer is - it depends on many factors, not least how much "control" is exerted on the associate individually or collectively.

For example, Dr Rattan unusually set no UDA targets for his associates and whilst he like many other practices owners and corporates give their associates clinical freedom, no paid holidays and no fixed hours, the degree to which this is applied will vary from practice to practice. The test of vicarious liability therefore is contingent on all these separate elements with some factors pointing the opposite way depending on how a practice is run. This judgment does not therefore set a precedent necessarily on this issue because it is a balancing assessment peculiar to each individual practice.

Equally, whilst it appears this case implies that practice owners have a non-delegable duty (NDD) to every patient who walks through the door of their practice whomever they see, the arguments concluded in favour of this position revolve to some degree around the fact that this was an NHS patient treated under the GDS contract where the Provider had wide-ranging contractual obligations that effectively created this NDD. There were other well accepted legal tests from a Supreme court case applied by the judges that supported this argument.

BDA Indemnity has been aware of these risks from the very start and includes vicarious liability cover into the insurance policy for all policyholders, practice owners and associates alike.

Further clarity is still needed

It remains unclear however, whether this case is sufficient to argue that a purely private practice owner escapes the NDD, because such a large element of this duty flows from the construction of the NHS GDS contract.

Furthermore, will it not apply to an NHS patient who is to have a purely private course of treatment like adult orthodontics, implants or facial aesthetics. And what of the patient having an NHS course of treatment with a private element mixed through it? So further clarity is still needed, and such clarity can only be determined by the courts.

Whilst both parties decide whether to appeal that part of the judgement in which their submission to the Court of Appeal did not succeed, the peril still remains for practice owners, and it is simply this:

If you are a practice owner, you may well be deemed to have a non-delegable duty to patients who come into your practice which you cannot discharge by contracting with a competent and fully indemnified dentist to treat those patients. That duty in law remains solely yours. As stated above it is still nevertheless case and fact specific.

It should be obvious too that the practice owners(s) will be individually liable but so will the partnership they may practice under or the limited company entity that they might have. The judgment made reference to this (Para 70).

It is estimated that 15-20% of dentists in the U.K. operate under a limited company structure for tax efficiency and to protect their NHS contract.

Be aware of not having specific entity cover

"BDA Indemnity has been aware of these risks from the very start and includes vicarious liability cover into the insurance policy for all policyholders, practice owners and associates alike."
It is very likely that unless you have specific entity cover which names the limited company, your personal professional indemnity with a defence organisation, for example, will not cover you in the event of a patient suing the practice entity. This is also true of most insurance contracts which have a named dentist as the policyholder entitled to be covered under the terms of the policy.

Increasingly this tactic being adopted by some law firms is to bring the claim against the practice owner only, rather than pursuing the individual treating dentists. This is not necessary, since all the treating dentists are legally required to have their own personal indemnity. This approach is also illogical as practice owners and limited companies/entities are not required by the GDC to hold indemnity to cover the negligence of dentists working in the practice.

BDA Indemnity has been aware of these risks from the very start and includes vicarious liability cover into the insurance policy for all policyholders, practice owners and associates alike.

We're here to help

We have been working hard with our insurers RSA to plug this new gap that has materialised with regards to entities being the subject of a claim. This includes associate dentists who have limited companies as well. There are criteria that apply to this policy, the details of which will be available soon.

Sadly, whilst the lawyers fight out these arcane arguments and the no win-no fee lawyers fill their pockets, the elderly patient Mrs Iris Hughes who is the subject of this claim, some four years later has not had her claim settled. It is quite possible that her lawyers have been involved in responding to negotiations with the defence organisation on behalf of the four dentists who actually treated her, but they have rejected this to pursue a claim against the only person in this scenario not to have seen the patient let alone treat her.

One wonders who is actually looking after her best interests.