Responsibility or liability?
When it comes to complaints or claims of negligence, do practice principals have a legal responsibility for the actions of their associates?
Dental practice owners are often proud to take responsibility for those who work in their establishments. However, when it comes to the issue of negligence, that obligation can become a matter of contention. Some argue that the complex topic of ‘vicarious liability’ will become increasingly relevant to the dental profession.
Vicarious liability is where, under certain circumstances, one party becomes liable for the actions of another. For example, an employer may be held civilly or criminally liable for the negligent or unlawful acts of an employee, even though the employee can be shown to have wilfully disobeyed the express instructions of the employer.
Neil Taylor of Taylor Defence Services (TDS), who is qualified in both dentistry and law, believes that vicarious liability is an area where most litigation in dentistry will exist in years to come. “The issues have always been known to lawyers and those dealing with law,” he said. “In dentistry, there is the conception that associates are self-employed and provide services on the basis of no contract or contracts that suggest an associate is not employed.”
He suggests this throws up several issues. Namely, are associates employees of owners or principal dentists when working in dentistry? What are the contractual rights and obligations between three parties: the patient, the principal dentist/owner and the associate dentist? What recourse does the patient have in law to seek damages for negligent acts?
According to Taylor, the issue is whether an associate is employed, not what type of indemnity they have; however, TDS urges principal dentists to consider their associates have in place “claims made” policies with retroactive cover and indemnity to principles clauses rather than discretionary “claims occurring” memberships.
Although the law regarding vicarious liability has been known for many years, it seems that until April 2014, there was a grey area in some minds as to why it should apply in dentistry.
The absence of case law made it difficult for dentists to predict the court’s reaction to any attempt to impose vicarious liability for the actions of associates. The judgment of HHJ Richard Seymour QC in Whetstone v Medical Protection Society Ltd  in the England and Wales High Court on appeal contains the first detailed examination of this issue.
Between 1998 and 2009, Mr Whetstone, the principal dentist, engaged Mr Sudworth as an associate dentist. A contract was drawn up in 2008 which stipulated the associate was self-employed. Allegations by patients of negligent treatment by Mr Sudworth were made in early 2009. The patients intimated claims against Mr Whetstone on a vicarious liability basis. Mr Whetstone sought indemnity from the MPS (Dental Protection Ltd).
In considering if Mr Whetstone was vicariously liable for the actions of Mr Sudworth, the judge examined the contractual relationship between the two dentists. He observed: “… there was a degree of artificiality about the Sudworth contract. It had been carefully constructed so as to ensure that, as between themselves, Mr Whetstone and Mr Sudworth were not in an employment relationship. However, to the outside world, unaware of the actual terms of the Sudworth contract, how some of those terms worked was likely to create a different impression.”
Judge Seymour cited clauses of the contract which, among other things, determined the policies Mr Sudworth was to follow, the uniform he was required to wear, the hours he was to keep, his holiday entitlement, how fees were fixed, collected and distributed, how he would not be able to treat his own patients wherever he liked, and not be able to treat his own patients after the termination of the contract.
Concluding the relationship was one “akin to employment,” Judge Seymour observed: “In no meaningful sense was Mr Sudworth an independent dental practitioner merely taking advantage of premises provided by Mr Whetstone. Mr Sudworth could not decide of his own choice when to work, or what to charge for his services. When the Sudworth contract came to an end, he could not take ‘his’ patients or their records with him.”
Taylor said the issue is becoming more prevalent as pursuing solicitors will not care who has caused the alleged negligence – they will stipulate that their client, the patient, contracted with the surgery or the limited company. Pursuing solicitors have begun to plead in court that the patient’s recourse in damages is against the surgery, owner or limited company as the associate is employed.
He maintains the solution is simple: all associates ought to have an indemnity to principals clause inserted into a policy of insurance such that if a patient decides to sue an owner or principal, then it falls back on the associate or the person deemed to have caused the negligent act. If the patient sues a limited company separately from the principal or the associate, then the company ought to look at corporate liability cover to protect the company.
Vicarious liability is an issue that has been carefully considered by organisations that offer dento-legal advice and professional indemnity. MDDUS is one such and its chief executive, Chris Kenny, said: “While all dentists have a legal and professional responsibility to maintain appropriate indemnity, principal dentists cannot afford to take this at face value. They should ensure that indemnity arrangements are maintained for any and all associates, partners and other staff employed or engaged in their practice.”
He emphasised that this can be a problem for principals where a partner or associate dentist has ‘claims-made’ indemnity (which is typical for most insurers), since a certificate of insurance becomes invalid if premiums are not maintained, and insurers will usually only pay if a claim is notified to them within a tightly prescribed period.
“Principals who are members of MDDUS can rest assured they have access to indemnity for their vicarious liability in relation to practice managers, nurses and other ancillary staff. Confirmation that any associate dentists are also members of MDDUS will provide principals with reassurance of adequate indemnity for claims arising, even after associates leave the practice.”
MDDUS welcomes the spotlight being shone on this area, he added. “While the legal issues are important to appreciate, our message to our members is that we remain abreast of these developments and have continued to innovate and build in features to their membership, so they can rest assured that we will continue to provide adequate and appropriate indemnity.
“The developments in this area of law have come thick and fast over the past few years and we see this trend continuing as claimant law firms seek to use this to their advantage. Unfortunately, this is likely to mean that more of our members are involved in claims relating to their employed staff.”
Meanwhile, Kevin Lewis, director at Dental Protection, said: “Practices vary greatly and, as a result, their potential exposure to vicarious liability will differ. For this reason, we encourage our members to contact us directly if they have any specific questions regarding vicarious liability and their practice.”
He went on to offer general advice to practice owners to help minimise their potential exposure to vicarious liability claims. This included making sure that all members of the dental team operate within the limits of their competence and/or legally permitted scope of practice, and having a written agreement with registered and non-registered personnel they employ, and any other registered health professionals with whom they work.
He advised that it should be a condition of employment or any other contractual relationship that adequate and appropriate professional indemnity is maintained by every registered healthcare professional at all times.
Echoing this, Chris Kenny said that whenever possible professional indemnity should be occurrence-based, and that if the indemnity takes the form of ‘claims-made’ insurance, it should include ‘run-off cover’ in perpetuity, without this depending on further premiums.
It is important to see documentation confirming that professional indemnity has been renewed annually and payments have been honoured. Equally, owners should keep copies of documentation that show these checks have taken place and the necessary indemnity was in place at all times.
Finally, he added that practice owners should “Do everything possible to reduce the likelihood of complaints and claims being made against themselves, or the person in respect of whom they might be held to be vicariously liable.”
The GDC Standard 1.8 of Standards for the Dental Team states: “You must have appropriate arrangements in place for patients to seek compensation if they suffer harm.” The onus is on practitioners, principal practitioners, limited companies and corporate bodies to decide if the cover they purchase is sufficient to meet that test.
When an associate becomes an employee
The issue of when an associate can be deemed an employee is central to the issue of vicarious liability. This is a topic that has been considered by Dawn Dickson, Employment Partner at Davidson Chalmers in Edinburgh.
She said: “A common assumption made by those working in dental practices is that a written agreement between the practice and associate dentist saying the associate is self-employed is enough to protect the practice from any claims that the associate is indeed an employee.
“Unfortunately, that is not the case and it is not just what is written down (although a good associate agreement is needed) but the day-to-day treatment of the associate that is important; many different factors determine if a dentist is in reality employed or self-employed.
“It is only when something goes wrong in the relationship that the status of an associate is put to the test, so the key thing is to ensure that the relationship practices intend to create at the outset is the one that is actually created.”
Dawn outlined key legal principles that need to be taken into account in deciding whether an associate dentist is employed or self-employed:
- personal service
- the written contract
- mutuality of obligation, and
- the right of substitution (someone truly self-employed should be able to send along a substitute to fulfil the terms of their contract.)
She recommended that practices and individuals review their associate agreement and working practices.
“People need to be clear on the type of relationship they wish to create and that should be reflected in a well drafted contract. Practices must adopt working practices to suit each relationship.
“Think about matters such as how dentists are paid, the degree of say they have in how and when they work, the degree of a dentist’s integration into the business, the provision of equipment, the responsibility for providing a substitute, the financial risk taken by their associates, the management of the performance and conduct of their associates, and the payment of professional costs.”