The proposals have already been condemned by MPs and even some accountants as looking suspicious and not above-board. But the Institute of Chartered Accountants says that going offshore in this way does not break ethical guidelines. It accepts that the firms have been forced to consider such moves by a rising litigation problem, emphasised by last week's pounds 105m High Court judgment against Binder Hamlyn.
Neither firm is commenting ahead of the announcement. However, it is understood that Jersey is ready to introduce legislation it has developed with the co-operation of E&Y, led by Ian Brindle, with a view to allowing large professional partnerships to limit their liability. At present in Jersey - as in mainland Britian - limited liability is only open to sleeping partners, or those that have absolutely nothing to do with the running of the business.
It is understood that the change being proposed is based on the law in Delaware, the US state, and will lead to the introduction of a limited liability partnership status. The move would have to be approved by the island's government and ultimately the Privy Council. Insiders are hopeful that the process can be completed by the end of next year. It is thought that Jersey believes acting in this way will enhance its standing as an offshore financial services centre.
The development, which follows KPMG's announcement earlier this year that it will incorporate its audit division to protect itself from large law suits, has been under discussion for several months.Reuse content