The measure due to be debated in the States of Jersey legislature tomorrow has been developed with the aid of big six accountancy firms Price Waterhouse and Ernst & Young.
If approved, it will allow large professional firms registering in the Channel Island to protect the personal assets of partners by becoming limited liability partnerships in much the same way as their US counterparts have done by setting up in the state of Delaware. The Isle of Man and Guernsey are also thought to be planning their own versions of the law.
But the fact that large firms of architects, surveyors and lawyers have expressed interest in following the leading accountants offshore has alarmed Deputy Prime Minister Michael Heseltine, who is known to be concerned that it could reduce the standing of the City of London as a financial centre.
At recent meetings organised by the Cabinet Office between representatives of the large firms - including KPMG, which has responded to the problem by turning its audit arm into a limited company - and government officials it has been indicated that ministers might be prepared to amend the law.
At present, limited liability partnerships are allowed subject to tight restrictions that render them difficult to operate.
The development is encouraging to the accountancy profession, which saw its lengthy campaign for a change in the law receive a setback earlier this year, when a Law Commission feasibility study commissioned by the Department of Trade and Industry concluded that there was no case for reforming the concept of joint and several liability.
Any initiative by the Government - which could come as early as this week - is unlikely to stop the firms' current plans. One spokesman said the development was "good news", but change could take up to five years to introduce. In that time, a firm could face the "catastrophic claim" they all feared.