Read our Head of Dental, Alex Hall's response to the suggestion that a principal is responsible for mistakes made by associates. This article was published by The Dentist magazine in March 2015.
In his article ‘Am I my associate’s keeper’ in the January edition of The Dentist, claims solicitor Christopher Dean pointed out a principal’s potential liability for negligent treatment delivered by associates. This unwelcome warning arises from the outcome of recent legal cases.
While it is correct to point out the dangers, the number of such cases in which principals will actually have a problem is likely to be very small. It is also not an entirely new issue as a principal will often have been liable in contract (the contract for treatment is between the practice and the patient) to the patient who could sue if the treatment provided by the practice (via the associate) falls below an appropriate level of care and skill. However, the issue only arises when an associate does not have their own insurance.
It is of course very rare for associates to carry on such irresponsible behaviour as treatment without professional indemnity (PI) membership. Most principals make thorough checks that associates have proper insurance in place. If you are not sure that this has been done, it is imperative that this be checked without delay. Checks on insurance need to be done both before a new associate starts work and on a regular basis thereafter.
In the legal case of Whetstone, referred to in the earlier article, the practice manager had repeatedly asked the associate for evidence of his insurance. The associate had ignored those requests, but the principal allowed the associate to continue working nonetheless and as a result the associate practised without insurance for nearly five years. It is of course a requirement of registration that satisfactory professional indemnity against claims of negligence is in place. This is not just the responsibility of the individual associate. To avoid potential liability for the associate’s mistakes the principal must have a robust system in place for ensuring that the associate is insured. There needs to be a clear understanding between principals and associates that no insurance means no work.
The written associate agreement must make this clear, allowing for immediate suspension or termination by the principal if PI membership or insurance is found wanting. Does failure of an associate to insure mean that the principal will have to pick up the tab for negligence claims against the associate?
Not necessarily. It is often possible that the principal can claim on his own insurance. Most defence organisations have very wide discretion on whether to cover claims. If they think that the principal is the victim of a straightforward oversight, insurers may be prepared to cover claims under the principal’s policy that would otherwise have been covered by the associate’s policy.
In Mr Whetstone’s case insurers felt that he had encouraged numerous claims from patients of his associate. Not surprisingly insurers were not sympathetic to Mr Whetstone’s request to cover him for those claims. Special care must be taken by principals who trade through a limited company or LLP, to ensure that both the company (or LLP) and they themselves are insured - it may well be the case that the principal’s own PI membership may not extend automatically to his company or LLP.
Are you really liable for the associate’s mistakes?
Apart from questions of insurance, there remains considerable scope for arguing that principals should not have liability for poor service delivered by associates. Much of the recent development in the law in the area of liability for other’s work has been developed through a series of cases concerning the churches’ liability for sexual abuse. In these cases even though the offending priests were not technically employees of the church they were found to be “akin to employees”. As a result the churches were found to be liable (vicariously liable) for abuse carried out by the priests. Although of course an entirely different area of activity, the principle of vicarious liability was, in the Whetstone case, applied to principals and associates in dental practices.
However, every case needs to be considered on its individual facts. As Christopher Dean points out in his article, the more control the principal has over the way in which the associate works, the more “akin to an employee” they will be and the more likely they are to be liable for their associate’s mistakes. There may well be cases in which vicarious liability cannot be established. This may especially be the case for example in relation to visiting specialist associates, who make their own appointments, have their own nurse, perhaps even hold their own NHS contract (such as for sedation, MOS and so on).
Can responsibility be delegated?
In his article Christopher Dean suggested that even if vicarious liability for associate’s mistakes did not apply the principal would still be liable. This follows the case of Woodlands v Essex County Council concerning the issue of non-delegable duties. In that case the Supreme Court held a school responsible for injuries sustained by a 10-year-old pupil at a school swimming session, organised and run by an independent swimming training company. The court held that the duty to look after the pupil could not be delegated by the school to the independent service provider. The judges commented that a similar rule may apply to hospitals and some other public bodies. There was however no specific reference in this case to the liability of dentists. There is very big difference between the average dental practice and a school or hospital. It is not all certain that the non-delegable rule would always apply to dental practices and it may well depend on the terms of the relationship between the principal and the associate.
- Regularly check associate’s insurance cover / PI membership, obtaining the certificate and receipt for the premium paid.
- Ensure the obligation to insure is covered in your written associate agreements, including a right to suspend or terminate immediately.
- Adopt written, signed associate agreements which contain terms designed to make clear that the relationship is far from “akin to employment” and then ensure that those terms are enforced in practice.
- If trading through a limited company or LLP, take special care, as your own PI membership may not cover legal actions against the Limited company or LLP.
- In the case of certain high value/high risk treatments where you feel there may be a risk of the associate fleeing abroad, consider taking a bond (a sum of money) from the associate at the outset and/or have an explicit right to retain all monies owed to the associate following termination, for use in case you are sued by the patient for the associate’s treatment.
- Consider a program of monitoring, checking the associate’s clinical work by way of a regular audit, to identify possible issues of negligence early.
- If the associate has no insurance try to persuade your own insurers to exercise their discretion to cover any claims. Be nice to them; at least initially.
- If neither the associate’s or your own insurance covers the claim, get specialist advice on whether you have liability for your associate’s work either on the “vicarious liability” basis or on the “nondelegable“ duty principle.
You can see the article in print here.