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Under a contract for the delivery of dental services, a practice agreed with Dr X on the terms for handling retention fees. This agreement stipulated a mechanism for the holding and return of these fees. Specifically, 50% of the retention fees were due to be released to Dr X six months after the agreement ended, with the remaining 50% to be returned at the nine-month mark following the agreement’s conclusion.
Upon Dr. X’s departure, the practice failed to pay the agreed-upon retention fees within the contractual timeframe. Despite Dr. X raising the issue in writing, the practice did not respond or rectify the situation by making the necessary payments. This failure to resolve the matter led Dr. X to seek advice from MDS.
Our member instructed MDS after the practice failed to respond to their correspondence and release the retention fees. Our advisors began by conducting a thorough review of the matter and Dr X’s contract. Despite multiple reminders and without prejudice discussions attempting to secure the outstanding payments, MDS’s attempts to communicate with the practice did not result in any substantial response or payments. Consequently, the next step was to issue a Letter Before Action to the practice. This was done in accordance with the Practice Direction on Pre-action Conduct and Protocols, notifying the practice of their obligation to comply with the provisions and the potential for legal proceedings in the County Court for a breach of contract if they failed to do so.
MDS issued a Letter Before Action to the practice, outlining their breach of contract and the necessary steps for resolution outside of litigation. The practice was formally advised that, in accordance with established protocols, a full response was required within 21 days of the letter’s date. Failure to comply with these protocols by not responding would lead to legal proceedings being initiated against them.
The MDS legal team began preparing for a County Court claim on behalf of Dr. X, as the practice failed to respond within the stipulated timeframe. This preparation involved working closely with Dr. X to collect necessary documentation and information, determining relevant limitation deadlines, and providing corresponding advice.
Before filing the claim, MDS issued a final warning to the practice to which the practice responded to confirm that they had finalised Dr X’s pay and would be paying the amount as per the pay statement the same week.
The full payment was received by Dr X and they confirmed that they were happy with the outcome and for the case to be closed.
This case study underscores the critical necessity of written contracts and the clarity of their terms. It is essential that both parties share a mutual understanding and agreement regarding the included clauses and their respective obligations. Before signing, thoroughly reviewing and comprehending any contract is vital to ensure full awareness of its contents, as well as your rights and entitlements.
Maintaining clear written records of correspondence and agreed payment terms is crucial. As demonstrated in Dr X’s case, the comprehensive paper trail—including records of the initial terms, subsequent reminders and chasers, and the written Letter Before Action (LBA) with its defined deadlines and expectations—significantly strengthened Dr X’s potential claim.
You should always be fully informed and aware of all aspects of your contracts, if any issues or disputes arise, contacting your medical defence organisation as soon as possible is crucial to ensure you receive and benefit from all entitlements and all clauses in your contract are adhered to by all parties.
Find yourself in a similar situation? Contact MDS as soon as possible to discuss your situation, our team will support you in making the best decision for you and your patients. Call our office on 0300 30 32 442 or email or case managers at [email protected] mentioning your membership number.
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