- Application of director disqualification legislation to LLP members (Re Bell Pottinger LLP V Geoghegan)
- What are the practical implications of this case?
- What was the background?
- What did the court decide?
- Findings on the law
- Application to the case
- Case details
Restructuring & Insolvency analysis: The High Court has held that all members of an LLP are potentially subject to disqualification proceedings under section 6 of Company Directors Disqualification Act 1986 (CDDA 1986). The court rejected the first and second defendants’ argument that only those members of an LLP who sit on the management board (or who have a position within the LLP which is equivalent to that of a director of a company) fall within the CDDA 1986 jurisdiction. Furthermore, the conduct that can be relied upon in support of disqualification is anything that is done in the capacity of a member of the LLP. In so finding, the court dismissed the first and second defendants’ application to strike out (and for summary judgment on) the Secretary of State’s claim for disqualification orders against them. The case is of particular interest to those advising LLPs—a junior member of a large LLP who makes serious mistakes in their handling of a client matter may, potentially, be subject to disqualification proceedings. Written by Raj Arumugam, barrister at 5 Stone Buildings.
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