Partnership disputes can occur for any number of reasons. Common issues that arise include finances, retirement, misconduct, performance and workload, breaches of a partner’s duty of good faith and breaches of partnership agreements.
Additional issues can also arise when a partnership is operating with no formal partnership agreement documenting the arrangement, as a partnership at will.
More often than not, a partnership dispute can have consequences wider than the partnership itself, for example in relation to property and assets held outside of the partnership, or other separate joint business interests.
Partnership disputes can be sensitive and there can be a lot at stake. In some cases, partners may be considering expelling or compulsorily retiring a partner. This can only be done when operating under a partnership agreement and if that agreement expressly sets out those powers. Partnerships at will have no such power and are governed by the default provisions of the Partnership Act 1890.
Partnership agreements can include a range of dispute resolution provisions. Often, a partnership agreement might not have the answer for every situation that arises, and the provisions can sometimes be interpreted in different ways - involving a third party can help to resolve any disagreements and differences in interpretation.
There are some practical steps that GP practices can take to try to avoid partnership disputes arising, and to help manage and resolve any disputes that do arise, for example:
If a partnership dispute does arise, there are many ways it can be resolved - through negotiation, facilitated discussions, alternative dispute resolution (for example mediation and arbitration) and court proceedings. We regularly assist with drafting and updating partnership agreements, and with resolving partnership disputes. We take a pragmatic and commercial approach when providing advice.