Practices hand out thousands to staff as quality points bonus
A legal battle by GPs against massive redemption penalties on their surgery loans is in danger of collapse.
Law firm Rubric Legal is warning it cannot take on the class action against the General Practice Finance Corporation unless more GPs agree to contribute to legal costs.
GPs have been hesitant to join the fight after the solicitors estimated the action against the GPFC, a subsidiary of Norwich Union, would cost £400,000.
Of 180 practices that contacted Rubric Legal about the huge penalties on their GPFC loans, just 27 have so far agreed to contribute to the legal action.
Satish Jakhu, solicitor at Rubric Legal, said the resulting legal bill of around £15,000 per practice would be prohibitive. He said: 'I'd love to take it forward but it's not viable at the moment.'
Rubric Legal had set a deadline of April 20 in a letter to GPs, but in a final plea Mr Jakhu said he could still proceed if half a dozen more practices signed up. He said he would look to cut some costs, such as using a senior lawyer instead of a QC.
It is estimated that around 4,700 GPs have loans from the GPFC, with redemption pen-alties in some cases topping £150,000.
Laurence Jackman, practice manager at the Coach and Horse surgery at St Clear, Wales, said the practice would sign up if a few others did too.
He said: 'If enough take part and the costs go down to as low as they say, then I'm definitely interested.'
Dr Ashok Jain, a GP in London who is facing a £122,000 penalty on a £287,000 loan, said he was still undecided.
He said: 'The situation is not clear and at the moment I just feel there is no way of knowing how much we will have to pay.'
But Dr Rachel Sykes, a GP in Bexley, Kent, who faces a £64,000 penalty on her £200,000 loan, said she was concerned legal costs could rocket once the case started.
She said: 'I'm starting to think that maybe the financial ombudsman may be a better bet in terms of cost.
'In my case I believe I have been mis-sold to and it would be good to get official confirmation of that before I do anything else.'
By Joe Lepper