Sole handed NHS contract holders

Accountants signing contract
Accountants signing contract

At a recent seminar that we attended, a high profile dental solicitor gave a very interesting talk and advised that he had been dealing with a very unfortunate set of circumstances in which one of his clients, a dentist, had passed away. 

The NHS contract was held in the dentist’s sole name. 

Due to the contract being held in this manner, on death, the contract reverted back to the NHS and was therefore not held by the deceased’s estate as the family anticipated. 

This impacted further on the deceased’s estate as they then had a dental practice with no NHS contract but with staff costs to fund and other liabilities, such as rent, etc. 

One option to deal with this matter is considering appointing a sleeping partner on the contract. 

Discussing with the solicitor, his comments were as follows:- 

I have to say that I quite understand the cautious approach, because you are playing with your principal asset.

 The reality is that this is something of a no brainer. 

If they don’t take on a sleeping partner with the protection of appropriate paperwork, then there is absolutely no risk on death of the sleeping partner seeking to take advantage, because there won’t be one, so there will be a slim risk of aggravation. 

On the other hand, if they don’t take this slim risk or put another way, a 99% tranche with no problem at all, then they will take a risk of a completely different nature. 

If the sole contractor dies, except where the NHS exercise its discretion to put the contract into the name of a related party, the contract will come to an end within 6 months. 

So there you have it, a slim risk of a tricky sleeping partner or you put your entire liability in the hands of NHS England, who may or may not exercise their discretion favourably. 

As to the paperwork itself, it is pretty simple.  It basically says a sleeping partner is a partner in name only and that all revenue and capital benefits under the contract are vested in the principal. 

Equally, it reassures the sleeping partner that if any liabilities arise under the contract, such as clawback, the liability is met by the principal. 

Hopefully, I think you will see it is important that we consider how we are going to proceed with this in order to protect your own and, in particular, your family’s position if anything should happen to you.

If you have any questions


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