Expulsion

partner disputes - whistleblowing

£3.4m LLP member whistleblowing claim permitted to proceed

ByPeter Garry

Losses resulting from expulsion following whistleblowing can be very substantial, and there is no statutory limit on the amount of compensation that can be awarded.

But in some cases the expulsion of the whistleblower may:

  • be based (at least on the face of the expulsion documentation) not on the whistleblowing, but on different, lawful grounds, or
  • be achieved by way of resolution of the other members under the terms of the LLP deed, under provisions requiring no grounds to be stated.

In such circumstances it may be argued by the continuing LLP members that the chain of causation between the whistleblowing and the whistleblower’s loss brought about by the expulsion of the whistleblower has been broken, and that accordingly no recoverable loss arises.

The Court of Appeal decision earlier this year in Wilsons Solicitors & others v Roberts brings such scenarios sharply back into focus.

LLP + no LLP members’ agreement = litigation

LLP + no LLP members’ agreement = litigation

ByPeter Garry

The recent case of Eaton v Caulfield & others (an unfair prejudice petition brought under section 994 of the Companies Act 2006, coupled with a just and equitable winding up petition under section 122(1)(g) of the Insolvency Act 1986) highlights the difficulties faced by LLP members who do not have an LLP members’ agreement setting out their…

Capital retention woes

Capital retention woes

ByPeter Garry

“… Possession being nine-tenths of the law, a partner/member in this position may have to sue to recover his capital …” A worrying trend has been emerging.  It has become much more common for partners and LLP members leaving professional practices to have difficulty extracting their capital. Typically professional practice governing agreements provide for capital…

Senior partner-itis

Senior partner-itis

ByPeter Garry

“… Typically the senior partner becomes complacent about the fabulous hand of cards that life has dealt him and starts to presume that he can do no wrong …” It may come as no surprise that amongst professional practices that have no provision in their partnership deed for regular senior partner elections, an unusually high proportion…

The 10 most important partnership or LLP deed clauses

The 10 most important partnership or LLP deed clauses

ByPeter Garry

…Recessions bring out the worst in people… A recession has a way of exposing weaknesses in legal drafting. As practices try to respond to the economic climate, management teams consult the fine print of their partnership deed or LLP members’ agreement, and may find it wanting. This article describes and explains the importance of a…