ACCC vs Orthodontists

The ACCC has instigated legal proceedings against three Associate Orthodontists practising in Tasmania. Whilst there has been some noise on this matter in the media generally and from the ADA, there has been little articulation of the wider impetus and rationale of the ACCC in pursuing this case.

Drs Ranu and Ors have had several associate agreements in place for some 15 years which included direct reference to and a quantification of, pricing, client referral, retention and allocation and also the geographical area in which they could practice, including strong restraint provisions. Further, the agreements went on to outline methodology preventing other Orthodontists setting up competing practices in Northern Tasmania.

The ACCC's argument revolves around section 45 of the Trade Practices Act 1974 which states:

If a provision of a contract made before the commencement of the Trade Practices Amendment Act 1977:

a) is an exclusionary provision; or

b) has the purpose, or has or is likely to have the effect, of substantially lessening competition;

that provision is unenforceable.

The ACCC's case is clearly that they interpret the fee and trade provisions in the Doctors' Associate agreement to be anti-competetive. A directions hearing is set down for Justice Heerey in the Federal Court on 16 October 2007. We will keep you updated on the progress of the case.

What does this mean for your practice?

In essence, all associateship practices should be reviewing their agreements and business practices for what may be construed to be anti-competitive clauses or behaviour.