A trip to the High Court
A number of articles have been appearing in the dental press and elsewhere, which refer to the case of Whetstone v Medical Protection Society Limited (sued as Dental Protection Limited). These are for the most part opportunist advertorials either from the “no win - no fee” law firms, or from those looking to sell professional indemnity insurance policies, both of whom see this as a massive issue that they can profit from. But the very fact that the case is being mentioned and discussed in the dental press has prompted people to ask us what it was all about – hence this article.
This case was heard over six days in the High Court, at the Royal Courts of Justice in London in March 2014. The recent articles tend to refer to the case only in outline, because once you get into the detail all is not quite what it seems at first sight. We should perhaps start by explaining that Dental Protection/MPS actually won the case at trial, with costs awarded in our favour, and this decision was upheld when the appeal process was finally exhausted in January 2015.
The claim was complex in its construction, but the relevant part for the purposes of this article is that a practice owner (Mr Whetstone) failed, over a period of 2½ years, to ensure that an associate working in his practice had any professional indemnity in place. Faced with the possibility of having to replace a lot of his associate’s work free of charge, he decided to write to a series of patients, admitting liability and suggesting that instead of suing the associate who carried out the treatment, they should sue him personally so that he could then seek assistance from Dental Protection under his own membership. Mr Whetstone even gave the patients the contact details of a named lawyer who was prepared to conduct the litigation on behalf of the patients, naming himself as the defendant.
The proposed claims amounted to over £300k, being the alleged cost of private “remedial” treatment that Mr Whetstone was proposing to carry out himself – or through other associates working in the practice. Mr Whetstone’s own practice had therefore determined:
a. that the associate’s treatment had been negligent (no independent party has been asked or given the opportunity to verify this, nor even that Mr Whetstone’s proposed treatment was actually clinically necessary)
b. what form any remedial treatment should take, and
c. what private fees the patients would be charged for that treatment.
As a result of this, Mr Whetstone was expecting to receive what amounted to a “blank cheque” from Dental Protection.
The proposed claim was further complicated by the fact that many of the patients in question were registered with the practice owner (Mr Whetstone) himself as Denplan capitation patients, and all of their monthly payments were paid into Mr Whetstone’s practice account rather than to the associate directly - so it was Mr Whetstone’s responsibility to carry out any necessary treatment anyway under the Denplan Care capitation contract. He was not entitled, under the terms of the Denplan Care contract that was still in force, to charge the patients anything more than the laboratory costs involved – let alone sums in excess of £300k.
Some of the recent reportage leads readers to believe that Dental Protection simply refused to assist a member who was entitled to expect that he/she would be indemnified for claims arising from treatment he had carried out. That is certainly not the case, not least because Mr Whetstone had not himself provided any of the treatment in question, but instead wanted to be paid (by Dental Protection) for subsequent treatment. This was a most unusual if not unique situation – a very different one from a situation where a patient sues the dentist who actually carried out the treatment and also different from a situation where a practice owner unwittingly finds himself/herself being sued on the grounds of vicarious liability for the negligent acts and omissions of an associate. Had we acceded to Mr Whetstone’s demands for us to pay him for the remedial treatment work and his legal costs, it would have been other Dental Protection members whose subscriptions would have been subsidising Mr Whetstone and his large practice in circumstances which most dentists (and more pertinently, dental members) would find unreasonable. In a sense, Mr Whetstone was seeking to profit from his associate’s lack of indemnity and his own failure to check that suitable arrangements were in place.
The judge clearly shared this view and in the judgement he was highly critical of Mr Whetstone’s actions in encouraging the patients to sue him personally, so that the claims would be directed towards Mr Whetstone’s own current (paid up) indemnity arrangements, rather than towards the associate’s non-existent indemnity arrangements. The judge expressed his views in no uncertain terms, adding that this single action by Mr Whetstone gave Dental Protection every justification for refusing to exercise discretion in Mr Whetstone’s favour.
It is important to note that these same actions on the part of Mr Whetstone would also have invalidated almost any contract
(policy) of professional indemnity insurance, so it is nonsensical for anyone to suggest or imply that Mr Whetstone was ‘let down’ in some way because he happened to have a discretionary indemnity arrangement. In fact, there would be several reasons why most insurers would have rejected any claim made by a practice owner in these circumstances, including (but
not limited to) standard exclusion clauses relating to co-operation and conduct that Mr Whetstone’s actions would have activated.
In all the (highly exceptional) circumstances of the Whetstone case, the Judge ruled that the working arrangements in that particular practice, at that time, were such that Mr Whetstone was vicariously liable for the negligent acts of his associate. Contrary to some of the opportunistic articles that have appeared in the dental press, this decision did not set any kind of new legal precedent and nor did it change in any way the law as it relates to vicarious liability, which is well established. This is simply the latest in a long line of cases (each determined on its own particular facts) involving business relationships of many different kinds in many different fields (including relationships between dental practice owners and associates), where matters of vicarious liability have been debated.
In most other cases involving whether or not a dental practice owner is vicariously liable for the negligent acts and omissions of a self-employed independent contractor associate dentist, the practice owner would be seeking to demonstrate that he/she has no such vicarious liability. What made Mr Whetstone’s claim so unusual, if not unique, was that he was trying hard to demonstrate the reverse, and thereby establishing that he was personally liable for his associate’s negligent work – in the hope that could then claim this cost from Dental Protection. For this reason, any attempt to extrapolate from a single, isolated decision in a wholly exceptional case, to make a sweeping statement that it would apply to any and every case, is obviously not justifiable.
Misleading
Yet in a recent article from one of the partners in a “no win – no fee” law firm (published even before the Appeal decision was handed down, such was their rush to get into print) it is misleadingly stated that as a result of the Whetstone case: “practice owners are now responsible, and potentially legally liable, for treatment provided by every associate they employ, and have ever employed, including those who have long since departed from their practice.”
This is somewhat sensationalist, as is the statement in the same article that the GDC requires registrants to carry indemnity not only for their own acts and omissions, but also for those of any other dentists with whom they work (which is certainly not the case). Practice owners are referred to page 53 of Dental Protection’s Annual Review, which clearly sets out some simple steps that practice owners can and should take in order to protect themselves against claims made against them on the basis of vicarious liability, and explains how Dental Protection can continue to support them if those steps are taken.