Dental practice litigation extends beyond personal matters like divorce to include partnership disputes, failed acquisitions, and employment conflicts. Each scenario involves significant time, money, and aggravation for dentists who often underestimate the litigation process.
The reality of dental litigation
It is rare for dentists or their practices to become involved in litigation except for personal matters. When it occurs, disputes typically involve partners, other dentists over potential practice acquisitions, or employees. These situations require substantial time commitments, financial resources, and these matters create tremendous stress for dentists.
The time required for litigation almost always exceeds dentists' expectations, especially for those without prior legal experience. Beyond the subject matter at hand, legal fees, expert witness costs, and court expenses create financial burdens that cause significant anxiety. The aggravation intensifies as cases progress because justice moves extremely slowly. Once in the legal system, delays occur with increasing frequency.
Reasons for the legal system's slow pace and high costs
Bruce Bryen, CPA, CVA.
Several factors contribute to the slow pace of the legal system in litigation. One main cause is that parties may realize their position is weaker than initially believed when litigation began. Advisers who prioritize their clients' interests over fees will explain both weaknesses and strengths, along with potential costs and time frames for completion. This reality check often shocks dentists.
After processing this information, dentists may request postponements to compose themselves and gather additional support for their case. For legal representatives, these delays are important to avoid presenting frivolous arguments that could incur the court's displeasure. The opposing party may face similar circumstances and require additional time to support their case presentation.
Financial constraints also contribute to delays. Attorneys and expert witnesses expect current payment and typically won't wait long for compensation.
Partnership disputes
When dentists dispute partnership agreements, the conflict usually centers on ego-driven questions about which partner is most important to the practice. Based on the governing contract, these disputes may require financial resources to resolve but should be relatively straightforward.
If the partnership agreement is properly written, production is key to the practice's success. The dentist with the highest production should be considered the most important partner.
When agreements lack production references, dental practice valuations help litigants and their advisers understand why production is key to partnership value and which dentist has the stronger position based on practice financials.
The dentist with lower production faces difficulty advancing their case and may resort to delaying proceedings, hoping the higher-producing partner runs out of financial resources to continue the lawsuit.
Unless extraordinary extenuating factors exist, the lower-producing dentist will struggle to prevail. However, if the higher-producing dentist presents a weak practice valuation with insufficient support, this weakness provides an opportunity for the lower-producing dentist to succeed, especially if their valuation provides superior support.
Employment disputes
Employees face significant challenges advancing employment disputes against dental practices and practice owners. First, they must establish a valid cause of action. Common issues include harassment, broken promises regarding salary increases or promotions, work hours, unclear job assignments, or patient-related problems.
The biggest problem often stems from a lack of written documentation between parties. Employment agreements with associates typically exist within contracts drafted and are reviewed by the dentist's attorney before execution by both parties. Associates also have opportunities to send employment agreements to their attorneys for review before signing.
However, written agreements with dental hygienists or dental assistants are unusual, creating a significant litigation problem. Without written documentation, neither the dentist nor the employee has proof to support their position. These agreements are almost always verbal, because neither party wants to invest the money or effort required for formal contracts.
Parties can rely only on verbal agreements between the dentist and employee regarding the point of contention. Verbal agreements have no more validity than the paper they're written on, which is to say, none at all.
Bruce Bryen is a certified public accountant with more than 45 years of experience. He specializes in providing litigation support services to dentists, with valuation and expert witness testimony in matrimonial and partnership dispute cases. Bryen assists dentists with financial decisions about their practice, practice sales, evaluating whether to join a dental service organization, practice evaluation during divorce proceedings, and questions about the future or financial health of dental practices. He can be reached at [email protected].
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