UK judges 'will reject LLP law'
Jersey limited liability partnerships, being promoted by two of the Big Six as an answer to curbing the litigation risks faced by partnerships, will be seen as a ‘sham’ by English judges should the law be tested in the courts, according to a leading lawyer.
John Dilger, immediate past president of the Law Society’s Revenue Law Committee and a partner at law firm Macfarlanes, claimed that if a Jersey registered partnership and its individual partners were sued for negligence while they still carried on their business in the mainland, an English judge would not listen to the argument that they are a Jersey LLP.
‘I think an English judge would say the whole thing is a sham, and you did it to avoid your creditors,’ said Dilger, ‘unless you wrote to each of your clients individually and said we are not liable, which would put them all off. It won’t wash.’
A UK-based version of LLP would allow partnerships to carry on as before and probably would work, he said.
Small firms are training fewer chartered accountants which could cause succession problems in the future, according to Mark Spofforth, chairman of the GPB. ‘For the first time this year, Coopers & Lybrand took on more students than all the firms with less than 10 partners,’ he said. General practitioners increasingly favour accountants studying certifieds exams.
Student chartereds absent for long periods on block release are less cost-effective for small firms.
