UK: Veterinary Brief - January 2013

Last Updated: 12 February 2013
Article by Jenin Khanam


Welcome to our first Veterinary Brief. We hope to keep you up to date with snippets of interest on veterinary regulation and law.

Vets beware restrictive covenants

The High Court has held that it was not appropriate to grant an injunction restrainng a retiring vet from setting up a competing business following her resignation from her previous practice in breach of restrictive covenants. The opposing parties had been partners. Their partnership deed contained a restrictive covenant that said a retiring partner could not practise within a 10-miles radius for a period of 3 years. The partnership then became a limited company and the partners were directors. Draft employment contracts were drawn up which included a similar restrictive covenant but for a period of 12 months. The contracts were never formally executed. The remaining former partner applied for an injunction to prevent the retiring partner from setting up a competing business, relying on the restrictive covenants in the partnership deed.

The Court held that the covenants remained enforceable. However, it would be inappropriate to grant the injunction as it would have the effect of preventing the retiring partner from working at all.

Vets should therefore ensure that they take legal advice on the terms of any restrictive covenants including the consequences, and must ensure that all documents are correctly executed especially if the nature of the practice is changing from a partnership to a company or vice versa, to avoid any uncertainty in event of a dispute or enforcement proceedings.

Fitness to Practise

A vet recently faced disciplinary proceedings by the RCVS following a covert investigation by a television production company. An undercover reported witnessed that no blood pressure monitor was used during an operation on a cat but noticed that a charge for the monitor was later included in the bill.

It was alleged that the vet had dishonestly included a charge for the use of a monitor where no blood pressure monitor was, in fact, used. The vet admitted that no blood pressure monitor had been used, but denied that he had been responsible for including the charge for it in the bill.

The Disciplinary Committee heard evidence from the vet, the reporter and also received numerous testimonials as to the vet's honesty.

Crucially, the undercover reporter had not seen the vet inputting the cost of the monitor onto the computer. She said that she overheard a conversation where the vet was instructed by a partner of the practice to include a charge for the equipment, but she failed to record the conversation. The vet denied having this conversation. The Committee found that, whilst there were discrepancies in his previous written witness statements (not least because the vet hadn't obtained legal advice at the outset and didn't understand the consequences of providing a statement), it could not be sure that the vet had entered the charge for the blood pressure monitor. It therefore dismissed the allegations against him.

A Warning on Flood Risk Insurance

A 2008 Agreement between the Government and the Association of British Insurers provides for flood insurance to be available for most homes and small businesses (including most veterinary practices), even where the property is at a "significant" risk of flooding (i.e. where flooding is expected once in every 75 years), so long as there are plans to reduce that risk below significant levels. This benefits hundreds of thousands of properties throughout England and Wales.

Faced with huge losses from recent claims, decreased flood defence investment and climate change, the insurance industry says it cannot afford to maintain insurance obligations. After 30 June 2013 insurers will not be subject to any specific commitment but have agreed to explore other options.

Whilst the Government is considering proposals, it is likely that the flood insurance market will start to more accurately reflect the risk to individual properties. Premiums will no doubt increase. Insurance may be restricted or even unavailable for more of the high risk properties.

Property owners, investors and lenders should review their potential exposure. The Environment Agency's flood risk maps do not provide property specific information or advice, and currently only deal with certain flood risks. Independent flood risk reports using better data and risk models to more clearly predict the potential risks are available from Ł30. These add a useful level of knowledge before engaging a more expensive expert.

Negotiations to buy or sell premises should take account of flood risks and the cost of insurance. Where a property becomes uninsurable or expensive to insure, the landlord could become liable for loss of rent, repair costs and alternative accommodation – depending on the lease terms. Tenants would still have to make provision for their contents and business continuity.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

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Jenin Khanam
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