A shocking court case highlights why some indemnity policies will not keep you safe from claims and damages.
The dental profession was rocked by the news this week that a practice owner in Wales was found to be liable for damages and costs - more than two decades after his retirement.
“The outcome has caused understandable anxiety among dentists.”
Dr Croad, a retired dentist and practice owner, was horrified to receive a claim from solicitors relating to treatment provided by two self-employed associates working in his practice before he sold it. He has had to defend this case out of his own pocket and faces further potential costs in any civil claim by the patient in relation to the treatment provided by the associate.
The outcome has caused understandable anxiety among dentists, many of whom are calling us for answers and support. To address your concerns, it is important to understand more about the case and why the judge ruled in the claimant’s favour.
The Breakingbury v Croad County Court judgement (19 April 2021) represents another shift to hold practice owners responsible for the care provided by their self-employed associates.
In this case, two associates treated patient Lynda Breakingebury in the practice owned by Dr Croad. This allegedly negligent treatment was carried out between 2008 and 2012. Dr Croad retired from dentistry in 2000 but owned the practice until 2012. The claim was made against him some seven years after he sold the practice.
The judge’s decision was not about the civil claim in relation to the dental treatment but a preliminary issue of whether a “non-delegable duty of care” existed between the practice owner and the patient and/or vicarious liability for the acts and omissions of the treating dentists in delivering care to a patient whom he had never seen or treated.
A non-delegable duty
This legal term describes a duty which cannot be discharged by entrusting its performance to another agent even if that agent is apparently a competent independent contractor. In such a situation, vicarious liability can be imposed on the party that has a non-delegable duty in certain circumstances, when it is fair, just and reasonable to do so (outlined by Lord Sumption in Woodland) and they become liable for that wrongful act even though they themselves do not commit the act personally. This is common in an employer-employee relationship.
The upshot of this judgement is that the practice owner becomes liable for any damages and costs awarded as a result of the civil claim that will follow by the patient in due course, assuming that the substantive claim is successful, unless this judgement is appealed.
The judge made reference to another dental case in a County Court and found his own findings consistent with that judgement though neither of the cases automatically sets a precedent for future judgements. But it does indicate that the law could be moving with regard to the issues of non-delegable care and vicarious liability on cases involving healthcare and in other arrangements.
Interpreting the judgement
The non-delegable duty is said to have arisen in this case partly because the practice owner had a commercial contract with the NHS to deliver activity (UDAs) and the Provider had delegated that duty to achieve those targets to the associates. The practice introduced patients to the associate who could choose to treat them (or not) whilst the practice retained the goodwill. As a result, the judge concluded that the practice had an overarching obligation to ensure that the dental services provided were safe and met the expected standards set by the NHS commissioners.
“The judge concluded that the practice had an overarching obligation to ensure that the dental services provided were safe.”
Whilst this practice was in Wales, this is not dissimilar to the expectation that the CQC has for Registered managers in England under the Health and Social Care Act 2008 (Regulated Activities) Regulation 2018 that the practice is safe, effective, caring, responsive to people’s needs and well led. Private practices owners might arguably have a similar non-delegable duty depending on the governance and contractual arrangements in a practice.
With regards to the UDA targets set and accepted by the associates, the practice was exerting control that, in the view of the judge, was sufficient to form the basis of vicarious liability and is to be regarded as “akin to employment”.
The judge concluded that the non-delegable duty of the practice owner existed even where the associates were responsible for their own tax affairs and own indemnity arrangements.
Whilst the judge did not refer to it, the owner’s “control” can also be demonstrated by the equipment and materials made available for use by the associates, wearing of a uniform, adherence to practice policies, practice clinical audits, performance reviews, working from a price list, fees being paid to the practice account and controlling the appointment times that can be worked in the practice by associates.
Questions raised by this case
- What can practice owners do to protect themselves from vicarious liability claims like these, long after you have retired and sold your practice?
- Why have the dentists, who actually did the allegedly negligent treatment, not been added as named co-defendants in this case?
The judge made it clear that there was nothing to stop Dr Croad from seeking indemnity from the associates but he would have to do that himself.
There are some answers
The BDA has been alert to the threats facing the dental profession and the challenges of modern practice. There is no simple solution to this developing legal challenge which encompasses public policy, statute and case law, NHS contractual agreements and standard business arrangements in delivering services to patients in primary dental care.
“BDA policyholders have the peace of mind of knowing that the policy covers all practice owners as they have vicariously liability covered.”
BDA Indemnity policyholders have the peace of mind of knowing that the policy covers all practice owners as they have vicariously liability covered under a contract of insurance with their standard policy under Section 6. The extension will only not apply in respect of legal liability:
a) when that individual was acting outside of the terms and conditions of their employment or contract or
b) where applicable, the Policyholder did not make reasonable efforts to ensure that individuals held appropriate cover.
Practice owners should be in strong position to mitigate the risks of vicarious liability claims against them if they have our cover, have our associate agreements in force and their associates have appropriate professional indemnity arrangements (preferably contractual, non-discretionary and occurrence-based) in place throughout the time they are working at the practice.
It’s a sad situation that we learn from another’s misfortune. But we should all consider the need for robust contractual cover – preferably one which respects the pleasures and pitfalls of modern dentistry.
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Blog: What is the difference between occurrence-based indemnity and claims-made indemnity – and does it matter?
Blog: What is vicarious liability? Kevin Lewis
Head of BDA Indemnity
The BDA’s indemnity policy is arranged by the British Dental Association and underwritten by Royal & Sun Alliance. The British Dental Association is an appointed representative of Lloyd & Whyte Ltd. Lloyd & Whyte Ltd is authorised and regulated by the Financial Conduct Authority (FCA). The FCA does not regulate the advice you receive with regards to advisory, case management and indemnity support provided by the BDA.