Updating your partnership deeds
First published in Practice Management in May 2021
Justin Cumberlege, a partner in the healthcare law firm Hempsons, highlights what needs updating in partnership deeds
There have been significant changes in GP primary care and these impact on the terms of the partnership deed.
The introduction of the clinical negligence scheme for GPs (CNSGP) provided by the NHS means that you need to ensure the partners are doing work under the practice’s NHS contract (GMS, PMS or APMS) – otherwise there is no professional indemnity insurance cover unless separate cover has been taken. There needs to be agreement on how and when additional insurance is to be taken out.
The NHS England Protocol on Sickness and Parental Leave pays for locum cover, which should be taken into account to allow GP partners to have more generous and sympathetic terms in the partnership deed if they are sick or take maternity, paternity or adoption leave, as locum cover is paid by the NHS for their absence.1 It is possible such cover is not sufficient, so consideration of top-up insurance should be given. Banking requirements and financial governance should be reviewed. With most payments taken online, the requirement to have two signatures on cheques is of little effect and you need to ensure that there is an effective procedure in place to authorise electronic transfers.
Primary Care Networks (PCNs) have increased the liability of partnerships as they participate in the PCN, and the partnership deed ought to have provisions to allow a partner to be the clinical director, and for partners to take on other roles which takes up their sessional consulting time. The deed should specify whether the partnership will employ PCN staff; in particular, those under the Additional Roles Reimbursement Scheme, or how it is decided. Many practices are thinking of the benefits of working at scale and merging or expanding Updating your partnership deeds Justin Cumberlege, a partner in the healthcare law firm Hempsons, highlights what needs updating in partnership deeds the practice. If every partner has a veto on such plans, it may hold back the development of the practice so it is advantageous to have a decision-making process which allows for a more adventurous approach if that is the ethos of the practice.
On retirement, with income flows becoming more complex and pension contributions taking time to catch up, the partnership deed needs to provide for a fair allocation of such receipts and expenditure after the retirement date, while having transparency and a cut-off date. Also consider whether or not ‘step down’ provisions should be included, where more senior partners are permitted to reduce the number of their sessions.
It is best to have a separate Declaration of Trust to cover property ownership, but that must dovetail with the partnership deed, and if retirements and recruitment are being contemplated (which they should) then agreeing how the property is to be considered for the future is important, taking into account the values of property and the ability for new partners to borrow large sums.
Reference
1. NHS England (2017) Protocol in respect of locum cover or GP performer payments for parental and sickness leave. PDF link HERE. (accessed 20 April 2021)