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What are pharmacy owners’ options if under economic duress by locums?

Inspired by a tweet, David Reissner considers what pharmacy owners can do if they find themselves held under economic duress by locums

My eye was caught by a recent post on Twitter.

Hopefully, this kind of conduct by locums is exceptional, but it raises some questions of contract law.

Read more: Contractors mull options as 'growing minority' of locums cancel shifts last minute

If someone enters into a contract, it is legally binding. Written contracts usually give locums the right to send an alternate. This is to preserve the locum’s self-employed status. In theory, a court might order the locum to honour the contract, but this is not a very practical remedy. If there is no right to send an alternate, a court would not normally order the locum to fulfil the contract.

For example, in the 1891 case of Whitwood Chemical Company v Hardman, Mr Hardman was a manufacturing chemist. He entered into a five-year contract to manage the Whitwood factory. The Whitwood company learned that Mr Harman was in talks to work for a rival business. They tried to get a court order to make him continue working for them, but this was refused. The court said that the remedy for a breach of contract was to claim damages to compensate the owner for any loss. In the case of a locum pharmacist who backs out of a contract, that may include claiming the higher cost of engaging another locum at last-minute rates.

Contract law also has something to say about a someone who, having entered into a contract, tries to back out unless a higher fee is paid. It is called economic duress.

For example, in the 1984 case of B&S Contracts v Victor Green Publications, B&S had agreed to erect exhibition stands for Victor Green at Olympia. The contract said B&S would be paid £4,500. Eleven days before the exhibition, B&S said they would pull out unless Victor Green agreed to pay £9,000 for the work. Victor Green agreed to this, and the exhibition stands were erected. After the exhibition, Victor Green paid only £4,500. B&S sued for the remaining £4,500. The court held that because of the late notification that B&S would pull out of the contract, Victor Green had no choice but to agree to pay the increased price. In other words, they acted under duress and were entitled to withhold the extra payment that had been demanded.

So, if a locum who has entered into a contract decides to back out, perhaps because they can get more money working somewhere else, it would probably not be practical to seek a court order, requiring the locum to fulfil the original engagement. However, if the owner has to pay another locum at a higher, last-minute rate, the owner could claim the additional cost from the locum in damages. And if the locum demands a higher fee at the last minute, an owner who agrees to pay it because they have no choice can still withhold the additional sum or reclaim it afterwards.

Litigation is best seen as a last resort, but blacklisting is not necessarily a good alternative. A pharmacy owner is free not to use a locum again. However, an owner who shares with others information about a locum who has backed out of a contract will have to be careful not to say anything defamatory and make sure that any shared information does not breach GDPR.

David Reissner is Chair of the Pharmacy Law & Ethics Association

Are contractors and/or locums keeping to their rate agreements? Share your views on the C+D Community

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