Further developments in non-delegable duty of care & vicarious liability

On 19 April 2020 HHJ Harrison in the County Court at Cardiff handed down judgment in the case of Breakingbury v Croad (unreported) 2021. Whilst the case concerns the provision of allegedly negligent dental care to the claimant, the trial of preliminary issues focussed on whether the dental practice owner, Mr Croad, owed a non-delegable duty of care to his practice’s patient, (the claimant) and/or whether, as owner of the dental surgery he was vicariously liable for the actions of the Associate dentists he engaged to perform NHS dentistry at the surgery.

The judge’s conclusions were surprising to many and have stimulated much discussion within dental forums and amongst insurers of those providing dental services.

It is worth noting that although the judgment post-dated the High Court decision on an alleged  non delegable duty of care in a primary healthcare context  (Jaida Mae Hopkins (a minor) v Akramy (1) Badger Group (2) and NHS Commissioning Board [2020] EWHC 3445 (QB) ), there appears to have been no reference to that case. Readers may recall that we highlighted the Hopkins case in a prior blog.

Although not arising in the exactly the same context, the High Court decision in Hopkins that a statutory non delegable duty of care did not attach to the NHS Commissioning Board involved might, on the face of it, be thought likely at very least to have carried some influence – if it had been cited – in analysing the same issue in respect of the provision of NHS dental services via the contractual matrix in this case. However, the case does not appear to have been considered and the judge in Breakingbury instead drew “reassurance” from the imposition of a non delegable duty of care in the unreported county court case Ramdhean v The Forum Dental Practice.

In analysing these cases it is important to remember that a judgment of the County Court is not binding. County Court judges must however follow decisions of higher courts. Whilst perhaps surprising, therefore the outcome of the Croad case need not be followed in subsequent cases.

Background

The Mr Croad’s practice’s contracts with its Associate dentists were, it seems, in the form of the template British Dental Association contract, although the actual documents were not available to the court and the terms of the agreements made are unclear.  The claimant had elected to proceed with a claim in relation to dental injury arising from care she received at the practice against Mr Croad as practice principal claiming he was liable for the acts or omissions of the Associate dentists who had treated her.

Proceeding with a claim in this way is unusual as a claimant will generally pursue the individual treating practitioner, (most often a self-employed contractor) and who arranges his or her own indemnity cover  for the consequences of their acts or omissions in the performance of their treatment of patients. The claim concerned dental  treatment provided between  2008 to 2012  at Mr Croad’s practice. Mr Croad had not provided any treatment to the claimant personally. He had in fact retired from dental practice in 2000 but continued to own the Fountain Dental Care Practice where the alleged negligent treatment  took place until 2012 when it was sold.

It is understood that he had no insurance in place to cover a claim for injuries resulting from an alleged breach of a non-delegable duty of care or vicarious liability for the actions of the associate dentists he engaged to perform the General Dental Services contract (GDS contract) which he entered into with the Local Health Board. The Court started its analysis of the legal position by looking at the GDS contract itself and the arrangements made to discharge the obligations under the GDS contract in the light of the alleged non delegable duty of care. There was no analysis of the provenance of the duty to provide NHS dental services further than that. It might be helpful to look at that now.

The Statutory Duty to provide General Dental Services

The duty to provide NHS dental services in Wales  is contained within the NHS (Wales) Act 2006, the format and wording of which closely follows that of the NHS Act applicable in England and which was considered in relation to the provision of primary care services in the Hopkins case.

Section 1 requires the Welsh Ministers to provide or secure provision of services to secure the improvement of physical and mental health and the prevention, diagnosis and treatment of illness.

Section 3 (1)(c ) makes it clear that the duty extends to the provision of NHS dental services are provided under a GDS contract and are to be regarded as provided by the Welsh Ministers.

Part 5 of the Act deals with the provision of dental services. In Wales it is the Local Health Board which enters into GDS contracts with those who are to provide the dental services.

Section 59  sets out who is eligible to enter into GDS contracts, who are;  (a) a dental practitioner; (b) a dental corporation ; (c) two or more individuals practising in partnership, one of whom at least is a dental practitioner and the others must effectively be NHS employees or healthcare professionals engaged in carrying out NHS services.

Section 63 makes it clear the a dentist may not perform any primary dental service for which the Local Health Board is responsible unless he is included in a list maintained under the regulations by a  Local Health Board

Section 63(2) (b) provides that a Local Health Board is responsible for a dental service if it provides the service, or secures its provision, by or under any enactment.

A similarly worded provision exists in the NHS Act 2006 in relation to the provision of primary medical services, but the reference to the commissioning body’s responsibility is not referenced in the Hopkins judgment.

In Hopkins it was agreed that it is not necessary to look at the common law where there is an applicable statutory regime . It would seem that in Croad, as in the Hopkins case, the duty being discharged was in fact a statutory one, which was delegable by the Welsh Ministers to the Local Health Board. The Local Health Board then entered into contracts for the performance of its duty with providers.

In so doing so one might assume the statutory duty has been appropriately delegated to the person or body under the GDS contract.

The GDS contract

Paragraph 101 of the GDS contract requires the contractor or contractors to provide primary dental services for his or her patients.

Much was made in the Hopkins case regarding the distinction between the use of the words provide or secure provision of services used in section 1 of the NHS Act and simply provision of services. It was held that as the duty was to provide or secure provision of services, that duty had been appropriately discharged by the NHS Commissioning body entering into the contract with the Out of Hours provider of primary healthcare services.

One question arises, which is what happens to  the statutory duty when appropriately delegated to an individual, corporate or partnership by means of the GDS contract? Mr Croad did not perform the services himself, nor do corporates, but they enter into contracts with dentists on a self-employed basis to perform them. On the strict wording of section 101 of  the contract is this permissible since it does not include the words ‘or secure provision’, it only refers to ‘provide’?

Also, what is the effect of section 63 (2) (b)? Is it that the Local Health Board can contract for the provision of the statutory duty but that it remains responsible for the service provided?

Perhaps this potential difficulty arises as a result of a drafting error in the GDS contract itself and reference simply ought to have been made in paragraph 101 to provision or securing provision of services.

What is also not clear is why the common law cases in relation to a non-delegable duty of care were explored in Croad at all given that the duty to provide NHS dental services is a statutory one and apparently delegable in part at least.

It is also unclear if the Croad case is to be appealed, but it is arguable that the consideration of a non delegable common law duty of care was not in fact necessary.

The appropriate question may in fact be, was the practice owner able to discharge the duty on him under the GDS contract by delegating the performance of the duty to the Associate dentists? If he was then surely he has done all that was reasonable and he should bear no liability for the negligent actions of the treating dentist.

Vicarious liability

Miss Breakingbury also alleged that Mr Croad was vicariously liable for the acts of the Associate dentists he engaged to perform the treatment and that, although not employees, they were in a relationship with the practice ‘akin to employment’.

The Associate’s contractual terms

As stated above the arrangement at Mr Croad’s practice, in common with the vast majority of dental practices in the UK was that Associate dentists were engaged on contracts for services and were accordingly responsible for their own tax and National Insurance payments.

The BDA template contract used at the practice referred to the practice owner granting the Associate ‘a non exclusive licence and authority’ to carry on the practice of dentistry at the premises and surgeries of the practice owner which does not seem consistent with an employment arrangement.

There is also reference in the contract to a certain number of units of dental activity the Associate is required to fulfil.

The contract contains a restrictive covenant in relation to solicitation of patients to another practice during and after the agreement and makes it clear that the Associate is to remain liable for all dental medical or clinical negligence on the part of the Associate in the performance of the contract.

The fees generated for services performed were split on a 50/50 basis between the Associate and the practice to reflect the cost of provision of the practice equipment and staff which fell to the practice owner. In respect of laboratory fees these would be split 50/50 between the practice and the associate.

It is important to recognise that under these terms the practice owners and the treating dentists generally consider the arrangement to be one of self-employment. The law in relation to vicarious liability has however been evolving in recent years  and the courts have provided some guidance as to when vicarious liability might be imposed out with the traditional employer/employee relationship where it is unclear what the nature of the relationship really is.

Lord Phillips in Various Claimants v Catholic Welfare Society [2013] 2AC 1 (the Christian Brothers Case) described the law of vicarious liability as ‘being on the move’ and set out 5 reasons which might make it just fair and reasonable to impose vicarious liability if there is doubt:

  1. The employer is more likely to have the means to compensate the victim than the employee and can be expected to have insured against that liability
  2. The tort will have been committed as a result of an activity being undertaken by the employee on behalf of the employer
  3. The employee’s activity is likely to be part of the business activity of the employer
  4. The employer, by employing the employee to carry on the activity will have created the risk of the tort committed by the employee
  5. The employee will, to a greater or lesser degree, have been under the control of the employer

In the case of Barclays Bank Lady Hale emphasised that the question is whether the tortfeasor is carrying on business on his own account or whether he is in a relationship akin to employment.

In interpreting this scenario the judge in Croad appeared to consider that the relationship was unclear and went on to consider the 5 reasons (or incidents) set out in the Christian brothers case. In doing so he laid emphasis on Mr Croad being the provider of dental care (presumably referring to the GDS contract) No reference was made to the performer and the requirement to be on the Local Health Board’s list.

The setting of targets also seemed to resonate with the judge which was interpreted as sufficient to form the basis of vicarious liability. The judge did not seem to consider that the fee splitting arrangement reflected any sharing of risk and reward nor that, although the practice benefitted from the fees from his or her work to the extent of 50%, the rest was for the benefit of the Associate.

There was no consideration of the indemnity arrangements and that in fact the practice, had no indemnity in place. That is perhaps not surprising given the terms of the contract with the Associates, and the fact that the Mr Croad had ceased practice himself in 2000 and sold the practice in 2012.

Finally, there was seemingly no consideration of whether it was in all the circumstances fair, just and reasonable to impose vicarious liability on Mr Croad.

Commentary

The Croad case has caused some consternation among those who provide and contract for the provision of NHS dental services.

The difficulty is in relation to the relationship that the vast  majority of practitioners and dental services providers consider they have, and the indemnity arrangements put in place to cover the potential liabilities arising under those arrangements to patients injured during the course of dental treatment.

If practices and practice owners are indeed found to have either a common law or statutory non delegable duty of care to patients, or be vicariously liable for the acts and omissions of Associates engaged on contracts for services, there is a possibility that injured patients may go uncompensated by reason of the fact that the indemnity arrangements are simply not in place to cover the potential liability.

Further High Court authority providing clarity on the statutory duty to provide dental services and also on vicarious liability would be very welcome. If there is indeed a drafting error in the GDS contract this should probably be reviewed.

In the meantime practice owners and associates would be well advised to review their contractual arrangements with Associates and ensure appropriate indemnities and insurance cover is in place and that details of these are kept. It would also be wise for practice owners to ensure that they keep themselves updated on the whereabouts of former associates in case a claim transpires. In order to be able to successfully defend a case brought against practice owners of course the witness evidence of the treating practitioner is vital.


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