Most Common Mistakes That Lead to Lawsuits for Dental Practice Owners

For a dental practice owner, a lawsuit can have a devastating impact, both on company moral and on company finances. The longer you stay in business, the higher the probability that your company will be sued at some point in time. There is no surefire way to prevent every lawsuit; however, there are some common mistakes that dental practice owners make that increase the likelihood of a lawsuit. Avoiding these common mistakes will decrease your likelihood of becoming the defendant in a lawsuit.

  • Failing to hire a reputable attorney – probably the single biggest mistake that dental practice owners make is failing to retain the services of a reputable attorney. Yes, hiring an attorney to review contracts and provide you with legal advice will cost money that you may think is better spent elsewhere. In almost all cases, however, the money spent on an attorney now will save you considerably more down the road by dramatically decreasing the likelihood a lawsuit—a lawsuit that would cost much more to defend than to prevent.
  • Failing to document – regardless of the size of your business, or the type of business you own, documentation is both the key to success and an important element in preventing lawsuits. Every agreement you enter into should be in writing and signed by all parties. Every purchase and every sale should be documented. Communication with suppliers, advertisers, clients, and anyone else related to your business should be documented.
  • Failing to pay bills on time – This one may seem obvious but many small business owners struggle financially while trying to get the business off the ground. The result is often some creative juggling with accounts payable and accounts receivable. Creditors who do not know you personally are often quick to file a lawsuit if you get behind on a bill. This can damage both your company’s credit and your own personal credit if the business is a sole proprietorship.
  • Failing to understand employment law – An employer who does not understand at least the basics of federal and state employment law is almost certain to end up as a defendant in a discrimination, sexual harassment, or wrongful termination lawsuit. Failing to understand how broadly sexual-harassment is defined by the law, for example, can land an employer in court defending a sexual-harassment lawsuit.
  • Failing to respond to complaints — It is very rare for a lawsuit to be filed without an attempt made to settle the issue outside of court first. The attempt may be in the form of a telephone call, a personal e-mail correspondence, a conversation with an unhappy employee, or a formal demand letter. An employer who fails to respond to an informal complaint leaves the other party with no other recourse than to file a formal lawsuit.

As a dental practice owner if you can avoid making these five mistakes you will significantly decrease the odds of landing in court defending a lawsuit.