Dental practice owner liable for alleged negligence of self-employed dentists (CA)

The recent Court of Appeal decision in the case of Hughes v Rattan [2022] EWCA Civ 107 will be of interest to everybody in the dental sector, whether you are a practice owner, associate dentist or professional adviser.

The case considered whether a dental practice owner was liable for the allegedly negligent acts (and omissions) of the associate dentists engaged by the practice as a result of either owing a non delegable duty of care towards the patients of the practice or being vicariously liable. As many will be aware from commentary on the decision in the High Court in this case last year, vicarious liability most commonly arises in an employment relationship. For example, a practice owner is very likely to be vicariously liable for the negligence of its receptionists and dental nurses committed in the course of their employment.

This case related to the first part of a two stage test which needs to be satisfied in order for the employer or person / company to be vicariously liable. This is whether there is a relationship between the practice owner and associate dentist which gives rise to vicarious liability. The question was whether the associate (in this case) was carrying on business on their own account or whether the services they provided were akin to an employment relationship). The status quo is that no vicarious liability arises for the acts and omissions by a genuinely independent / self-employed contractor in carrying out the work or providing the services they were engaged to do.

However, the practice owner was found to have a non-delegable duty of care towards the patients, notwithstanding the self-employed status of the treating associate dentists. Therefore, whilst the practice owner may not be vicariously liable, a similar liability can arise as a result of the negligence of the treating self-employed / independent contractor (associate dentist). The two principles are distinctly different but nevertheless risk of liability, as demonstrated by this case, can arise for a practice owner. The risk of this liability is heightened in the absence of an associate agreement to refer to or having one which does not contain adequate contractual protections under the associate agreement.

There are five factors needed to be satisfied to put the non-delegable duty on the practice owner (established in a 2013 case):   

1. The claimant is a patient or child or is otherwise especially vulnerable or dependent on the protection of the practice owner against risk of injury.
2. There is an prior relationship between the patient and practice owner which places the patient in the custody, charge or care of the practice owner and from which it is possible to place a positive duty on the practice owner to protect the patient from harm.
3. The patient has no choice over how the practice owner chooses to perform the obligations;
4. The practice owner has delegated to a third party (i.e. Associate Dentist) some function which is an integral part of the positive duty assumed to the patient, and the third party is exercising, for the purpose of the delegated function, the practice owner’s custody or care of the patient and the element of care that goes with it.
5. The associate dentist has been negligent not in some collateral respect but in the performance of the function assumed by the practice owner and delegated to the third party.

In the case referred to above, the treatment referred to was pursuant to an NHS GDS Contract with associates engaged to perform UDAs (“units of dental activity”) and the associates entered into associate agreements under the terms of a widely used standard BDA model agreement. As is standard under these agreements, each associate held professional indemnity cover for negligence claims, was responsible for their own work and clinical audits, had clinical control over the dental treatment they provided, paid their own tax and national insurance contributions and received no sick pay or pension. Not unusually, the post-termination restrictions made reference to “patients of the practice” given the goodwill of the practice and patients is said to belong to the practice owner hence the extremely high value consideration attached to goodwill in the sale and purchase of dental practices.

The claimant patient in this case claimed to be a patient of the practice and not “on the list” or a patient of a particular dentist which again is not unusual for an NHS patient at least.

Whilst the practice owner in this case had been found to be vicariously liable last summer in the High Court, the Court of Appeal did not uphold the decision on this. The outcome could have been very different if the associates in question had not enjoyed clinical freedom, flexibility to choose their own hours and been permitted to work for other practices.

In considering whether the practice owner was under a non-delegable duty of care to the patients in relation to treatment received at the practice, it was noted as being of relevance that only the practice / practice owner’s name appeared on treatment plans, the description of patients as “patients of the practice” in the Associate Agreements and the post-termination restrictions imposed on each associate dentist in question.

Comment

This case is also notable because it is the first time the Court of Appeal has considered non-delegable duties of care beyond hospital treatment. It is now the case that dental practice owners owe such a duty to patients and only contractual protection can put some protection in place for the practice owner, in that regard.

The case is also an illustrative reminder of the factors the courts consider in determining or considering whether an individual is employed or a self-employed contractor. The primary focus of the courts when looking at the vicarious liability point, was the contractual documentation. From reading of the judgement, this was far from clear cut and the decision far from emphatic.

It is our opinion that dental practice owners take stock and ensure their associate agreements reflect the reality of a self-employed relationship between the parties (as set out above – contractual documentation was poured over in detail by the courts in this case) and therefore no vicarious liability arising. The absence of a bespoke and well drafted document in a similar case in the future could be of significant consequence to the practice in question.

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