Most disputes between dental partners, or between a practice and an associate, come from the same handful of causes: disagreement over profit share, breach of a restrictive covenant, disagreement over admitting or removing a partner, and disputes on exit over how a departing partner’s share should be valued. Nearly all of them are made worse, and far more expensive, by not having a partnership or associate agreement that addresses the specific point in dispute. This post sets out the disputes we see most often in dental practices and the drafting that heads them off before they escalate.
It connects to our sub-hub on dental practice partnership agreements, and to our post on restrictive covenant enforceability, since covenant disputes are among the most common and highest-value disputes we see in this sector.
Disputes Over Profit Share and Contribution
A very common trigger is a change in one partner’s clinical output, whether through reduced hours, a period of illness, a shift toward more administrative or management work, or simply a change in how busy each partner’s list is, without the partnership agreement’s profit-sharing formula changing to reflect it. Under the Partnership Act 1890 default position, profits are shared equally regardless of contribution, and where partners have never displaced that default in writing, resentment tends to build quietly for a long time before it surfaces as an open dispute. The fix is a profit-sharing formula that is either reviewed on a set schedule, or built around objective, agreed metrics (sessions worked, UDAs delivered, private income generated) from the outset, so a change in circumstances triggers an agreed recalculation rather than a negotiation from scratch under pressure.
Disputes Over Long-Term Absence
Where a partner takes extended sick leave, maternity or paternity leave, or another form of long-term absence, and the partnership agreement is silent or relies on the 1890 Act default, that partner may remain entitled to a full, unreduced profit share indefinitely, while the remaining partners cover the clinical and administrative workload. This is one of the most common sources of real bitterness in dental partnerships precisely because there is rarely a villain, only a badly drafted or absent agreement. A properly drafted agreement should set out, in advance, how profit share is adjusted (if at all) during extended absence, what “extended” means in practical terms, and at what point the practice can begin the process of considering the partner’s position if the absence becomes genuinely unsustainable for the business.
Restrictive Covenant Disputes
Disputes frequently arise when a partner or associate leaves and either side disagrees about whether a restrictive covenant applies, and if so, whether it is enforceable. As we cover in detail in our post on restrictive covenant enforceability, UK courts apply a reasonableness test: the practice must show a legitimate business interest, and the restriction must go no further than reasonably necessary to protect it. Many covenant disputes could be avoided entirely with narrower, better-targeted drafting at the outset, rather than relying on a broad, unreviewed template clause that both sides only discover is unenforceable once it is tested. Where a covenant is genuinely well drafted, disputes are far more likely to resolve quickly because the outcome is predictable rather than contested.
Disputes Over Practice Sale and Valuation
When partners disagree about whether to sell the practice, or agree to sell but disagree about the price or the split of proceeds, the dispute often exposes gaps that were always there but never tested: no agreed valuation methodology, no clarity on whether goodwill is split equally or by capital share, and no mechanism for resolving disagreement other than each partner instructing their own valuer and hoping for the best. A partnership agreement that sets out, in advance, how a sale decision is reached (unanimous consent, majority vote, or a right of first refusal for remaining partners) and how any resulting valuation dispute is resolved (typically expert determination by an agreed independent valuer) removes most of the room for this kind of dispute to escalate into litigation.
Deadlock Between Equal Partners
Where a practice has two partners with equal shares and equal voting rights, a genuine disagreement on a significant decision, taking on new debt, admitting a new partner, or terminating the practice’s arrangement with a supplier or landlord, can leave the practice unable to make any decision at all. Without a deadlock-breaking mechanism (a casting vote, a requirement to mediate within a set timeframe, or a pre-agreed buy-out mechanism triggered by sustained deadlock), a genuinely stuck disagreement between two equal partners can paralyse the practice’s decision-making for months.
Disputes Over Clinical Responsibility and Liability
Where a complaint or a negligence claim arises from treatment provided by an associate, disputes can arise between the practice and the associate over who bears responsibility, and between partners over how any resulting liability or reputational damage is shared. The courts have confirmed that a practice owner’s duty of care to patients is non-delegable. In Breakingbury v Croad, a first-instance judgment handed down at Cardiff County Court in April 2021, the court held a practice owner liable for the negligence of an associate working under her, on the basis that the duty owed to patients could not be transferred away simply because the associate was self-employed. This makes it particularly important that associate and partnership agreements address indemnity, insurance requirements, and how any liability arising from clinical treatment is allocated between the parties, rather than leaving it to be worked out after a claim has already arisen.
How Well-Drafted Agreements Prevent Escalation
The common thread across nearly every dispute above is not that disagreement happened, disagreement between business partners is normal, but that the practice had no pre-agreed mechanism for resolving it, so a workable disagreement became an expensive, relationship-ending one. A well-drafted partnership or associate agreement should include:
- A clear, objective profit-sharing formula that is reviewed on a set schedule rather than left static indefinitely.
- Express provisions for long-term absence, setting out exactly how and when profit share is affected.
- Narrowly and carefully drafted restrictive covenants, tailored to the practice’s actual patient base rather than copied from a generic template.
- An agreed valuation methodology for goodwill and partner shares, ideally naming or describing how an independent valuer will be selected if needed.
- A mandatory mediation step before either side can commence litigation, giving both parties a genuine, lower-cost route to resolve a dispute before legal costs escalate.
- A deadlock-breaking mechanism for genuinely equal partnerships.
- Clear indemnity and insurance provisions addressing clinical liability arising from associate treatment.
What This Means for You
If your practice is currently in the middle of a dispute, the priority is usually to establish quickly what your existing agreement (or, if there isn’t one, the Partnership Act 1890 default position) actually says, since that determines your options and leverage from the outset. If you are not yet in dispute but recognise your agreement has gaps in any of the areas above, addressing them now, while relationships are still workable, is far cheaper and far less stressful than doing so once a disagreement has already hardened into a formal dispute.
We advise dental partners and associates both on preventing disputes through better drafting and on resolving disputes that have already arisen. If you are dealing with a partnership or associate dispute, or want your existing agreement reviewed before a disagreement escalates, get in touch with our dental practice team for a consultation, or call us on +44 207 566 1188, or email info@gurvelegal.com.
