Admissibility of partnerships between veterinarians and business economists

• 05.04.2022
• Sven Jan Arndt
• no comments

Background:
Veterinarian Susanne Arndt operated three small animal practices in the Karlsruhe area, typically as a sole proprietorship. With increasing growth, she wanted to convert them into a limited liability company (GmbH). However, the German Transformation Act (Umwandlungsgesetz) requires a registered legal form for this (even if it's just a registered merchant). The latter isn't possible for a self-employed professional, as they aren't considered merchants. Therefore, the only option was to establish a partnership – consisting of self-employed professionals (in this case, the veterinarian and a business administrator). The partnership was founded and registered with the Mannheim Local Court (AG Mannheim).

The case:
The Baden-Württemberg State Chamber of Veterinary Surgeons applied for the dissolution of this company pursuant to Section 21a of the Professional Code of Conduct, as its code of conduct stipulates that a partnership is only permissible between veterinarians. Paradoxically, it simultaneously suggested to the two partners that they could implement their project as a limited liability company (GmbH) instead!

The decision of the Federal Court of Justice (BGH) of 15 February 2022 – II ZB 6/21 – Higher Regional Court (OLG) Karlsruhe / Local Court (AG) Mannheim:
„"A partnership between a veterinarian and a business administrator is permissible under the Baden-Württemberg Chamber of Health Professions Act."“

The Federal Court of Justice's (BGH) reasoning:

The professional code of conduct of the LTK BW is not a formal state law, which is why the BGH was able to decide without involving the BVerfG.

Section 21a of the Professional Code of Conduct violates the priority of Section 30a Paragraph 1 Sentence 2 of the Baden-Württemberg Chamber of Health Professions Act (hereinafter: HBKG BW), according to which veterinarians may run a practice jointly with persons who belong to a state-approved training profession in the health sector, a natural science profession, or a social education profession, in accordance with Section 2 Paragraph 1 No. 3 HBKG BW.

The interprofessional associations of chamber members permitted by the HBKG BW cannot be restricted by the chambers' statutes.

Therefore, there are no public interest considerations that would preclude interprofessional collaboration with a business economist (among other things due to Art. 12 para. 1 GG – freedom to practice one's profession, but also §30a HBKG BW is not to be understood as conclusive).

Such cooperation does not contradict the purpose of the HBKG BW, because "the definition of permitted forms of professional practice should ensure compliance with professional obligations in healthcare activities in all legal forms of organization "It could be enforced."“

At this point the The reasoning behind the verdict is interesting., because it goes on to say:

„"The legislator intended to fundamentally exclude commercial medical practice. Commercial activity is defined as partnerships and legal entities, but not members of the liberal professions… which include business administrators… Only for medical practice within legal entities has the legislator established detailed requirements in Section 30a Paragraph 2 of the Baden-Württemberg Health Care Act (HBKG BW) to exclude commercial medical practice."“

And this is particularly interesting when you take a closer look at this paragraph:

§ 30a (2) HBKG BW:
The professional activity of a healthcare provider for a legal entity under private law presupposes that

1. The company's purpose is the exclusive performance of medical professional activities.,

2. all shareholders are persons as defined in paragraph 1 sentence 2,

3. the majority of the company shares and voting rights are held by chamber members in accordance with Section 2 Paragraph 1 Numbers 1 to 3 or Number 5 and company shares are not held on behalf of third parties,

4. at least half of the persons authorized to manage the business are chamber members in accordance with Section 2 Paragraph 1 Numbers 1 to 3 or Number 5,

5. a third party does not participate in the company's profits,

6. sufficient professional liability insurance exists for the legal entity under private law and the professionals working therein and

7. It is ensured that the medical professional activity is carried out by the chamber members in accordance with Section 2 Paragraph 1 Numbers 1 to 3 or Number 5 on their own responsibility, independently and not commercially.

Further details are regulated by the respective professional code of conduct.„

If one follows this passage of the HBKG BW, to which the Federal Court of Justice (BGH) explicitly refers – what does this mean for chains like Evidensia or Anicura in Baden-Württemberg? Shouldn't the Baden-Württemberg State Chamber of Veterinary Surgeons intervene immediately and ban them?

Furthermore, the Federal Court of Justice's statements on the subject are extremely interesting. Duty of confidentiality of the veterinarian:

„"Finally, a veterinarian (§ 2 para. 1 no. 3 HBKG BW) – unlike the chamber members further covered by § 30a para. 1 sentence 2 … does not possess a right to refuse to testify pursuant to § 53 para. 1 no. 3 StPO. In contrast to the other chamber members … a veterinarian does not have a special relationship of trust with his client, which includes and requires the protection of legitimate confidentiality interests (cf. BVerfGE 38, 312, 323 f.)."“

Conclusion from our perspective:

• Not everything that state veterinary associations write in their professional codes of conduct is untouchable.
• The State Chamber of Veterinary Surgeons of Baden-Württemberg has received a clear mandate, based on the explicit reference to Section 30a Paragraph 2 of the Baden-Württemberg Animal Welfare Act (HBKG BW), to review the chains operated by financial investors in this region and to take appropriate action.
• We are eager to see if this will happen and thus ensure legal certainty!