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by Andrew Broadbent
16 May 2017

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Blog: Agreements and contracts in a changing world

NHS England’s blueprint for service transformation, Next Steps on the Five Year Forward View, has a number of implications for primary care, including the creation of GP practice ‘hubs’ covering patient list sizes of 30,000 – 50,000 patients. Andrew Broadbent, a solicitor in the hlw Keeble Hawson litigation and dispute resolution team, looks at the potential impact of the new arrangements on practice partnership agreements and supplier contracts

A partnership agreement setting out the obligations, responsibilities and restrictions for partners is essential to the smooth running of any GP practice.

Although a surprisingly large numbers of practices operate without a formal partnership agreement, or one that is up to date, it doesn’t mean there is no agreement at all.

In the absence of any written agreement, a GP partnership is governed by what’s known as a ‘partnership at will’ under the Partnership Act 1890, which may be unlikely to reflect the intentions and requirements of a particular partnership, particularly one working in an NHS that is changing so quickly.

That’s why we would always recommend that practices draw up their own bespoke partnership agreement and, importantly, that they treat it as a living document that has to be kept up to date to avoid it becoming contrary to the intentions of the partners.

In recent weeks NHS England has made it clear that it wants to see practices across the country come together to form collaborative ‘hubs’, covering a larger patient footprint of up to 50,000.

It is not yet clear exactly what shape these hubs will take or what the governance architecture will be, but in my view now is the time for practices to review their existing partnership agreements and start thinking about what impact any new working arrangements could have on the way their operate as a business.

Having acted for a number of clients who have got into difficulty because they have failed to update their agreements to reflect changes, it would be sensible for practice managers to be considering issues such as:

  • Whether working with other practices might require updated performance measures for partners;
  • Whether current dispute resolution procedures are adequate and could be adapted if necessary to cover potential conflicts with other practices in the same hub;
  • Whether there are any implications for the financial performance of an individual practice.

At the same time, I believe now is the perfect opportunity for practice managers to review the suite of other agreements, such as supplier contracts, held by the practice in order to understand if:

  • Existing supplier terms and conditions will be affected by any new working arrangements;
  • Notice periods on contracts need to be reviewed to bring them in line with potential future changes such as shared contracting;
  • Termination agreements are in place and under what circumstances they can be triggered;
  • There are any liability limitations that could impact on a practice’s finances in the event of a contract change.

Our experience of working with GP partners and their practice management teams is that often the day-to-day tasks of delivering patient care can leave little room for reflection about the shape of things to come.

However, we would always advise practice managers to build in sufficient time to ensure that their contracts, including their partnership agreement, stay relevant by reflecting the latest policy and legislative changes.