Ruling highlights risk of personal liability of partners in dental practices

The preliminary hearing for the case centred on the issue of whether Rajendra Rattan, a principal dentist and practice owner, could be vicariously liable in a personal capacity for the alleged dental negligence of associate dentists working within his practice. Rattan had conceded that he could, in principle, be vicariously liable for the negligent acts of his employed dentists, but contested whether he could be personally liable for the negligence of the self-employed associates engaged to provide dental treatment to the patients of his practice.

It has long been established that employers are capable of being vicariously liable for the negligent acts or omissions of their employees. However, whether a defendant to litigation can be held vicariously liable for the negligent acts of an independent contractor – in this case, the self-employed associates – in part depends on whether that relationship is found to be ‘akin to employment’.

In the preliminary judgment for this case, the High Court found that the relationship between Rattan and his associate dentists was ‘akin to employment’, and consequently that Rattan was capable of being held vicariously liable for the tortious acts of the associates he engaged to work in his practice. A trial is to be held to determine whether or not any negligence was actually committed in this case.

Crucially, the court held that the fact Rattan’s associate dentists were self-employed and each held their own professional indemnity insurance did not preclude a negligence claim being validly brought by a patient against Rattan in his capacity as the principal of the dental practice – notwithstanding the fact that he had never personally provided any treatment to the patient in question.

The judgment itself does not establish any new principle of law but does illustrate the direct application of vicarious liability to partners and principals in the dental sector in a profession where many practitioners may have believed they were covered against that risk by virtue of the fact that their associate dentists held professional indemnity insurance.

The risk of exposure to practice owners and partners for the dental negligence of their associate dentists can be significantly mitigated through appropriate insurance and robust contractual protections in the agreements used to engage associates. Investors and partners in the dental sector should seek legal advice in light of the preliminary judgment in this case to discuss how revisions to their template associate dentist agreement could be made to ensure partners are afforded maximum protection from personal liability should any claim of negligence arise.

Co-written by Anthony Hollands of Pinsent Masons.