Legal firms 'go offshore' to avoid litigation
Thursday 02 May 1996
Dibb Lupton Broomhead, the Leeds-based firm that has expanded aggressively recently to make a mark in the City, has appointed KPMG, the accountancy firm that has incorporated its audit arm, to carry out a feasibility study on the issue, while Linklaters & Paines, one of the most respected firms, has asked a working party of senior partners to report on the matter in the next few weeks.
Other firms, including the leading City establishment Freshfields and the national firm Eversheds, are understood to be investigating it.
The news comes as Clifford Chance, the City's largest firm of solicitors, with more than 200 partners, is facing a C$1.3bn (pounds 610m) claim from four Canadian banks that suffered heavy losses in the collapse of Canary Wharf in London's Docklands. Clifford Chance, like other firms, is keeping the issue under review in the wake of the Law Society's recent relaxation of its rules on incorporation, but is not yet planning anything specific.
The claim is thought to be the biggest suit against a London law firm made public, but one partner said there were many others that were settled without being reported. "Nobody likes to see another firm being sued, because you think 'There but for the grace of God go I'," he said.
However, these claims have not yet reached the level of those in the accountancy profession, where suits following the collapses of such organisations as the Bank of Credit and Commerce International, the Maxwell empire and British and Commonwealth caused serious concern in the profession.
Late last year the partners of Binder Hamlyn, which is now part of the US-based Arthur Andersen organisation, faced bankruptcy after a case involving the purchase of a company by ADT went against the firm.
While KPMG has opted for partial incorporation to deal with this problem, fellow "big six" accountancy firms Price Waterhouse and Ernst & Young have banded together to help the States of Jersey develop a law under which partnerships can limit their liability in much the same way as limited companies. Under the arrangements being proposed, the firm would remain liable for all its debts, but individual partners would not face losing personal assets, such as houses, because of the negligence of other partners.
Both Dibb Lupton and Linklaters will be looking at the Jersey option, but Terence Kyle, managing of partner at Linklaters, pointed out it was difficult to come to a conclusion about the implications of that route since the situation was "still a moving target".
Nigel Knowles, Dibb Lupton's managing partner, suggested the firm's main motivation in changing its status was financial. It wanted to meet long-term investment requirements out of retained profits and also to be able to "properly remunerate all the staff" and give them a share of the profits.
Comment, page 19
- 1 Cara Delevigne addresses awkward interview on Good Day Sacramento
- 2 Model's video shoot on the beach interrupted by sudden landing of a group of illegal migrants
- 3 The difference between a psychopath and a sociopath
- 4 MH370: Boeing 777 wing that could match missing plane found on the French island of Reunion
- 5 Living in Spain and commuting to London 'cheaper than actually working in London'
Kate Winslet thanked 'particularly horrible' girl who bullied her at school after Titanic success
Israel accused of killing 75 children during day of 'carnage' and war crimes in Gaza war
Australia to impose 24-hour curfew on all cats to protect endangered species
Walter Palmer: Cecil the lion killer revealed to be American dentist
MH370: Boeing 777 wing that could match missing plane found on the French island of Reunion
Yvette Cooper: Our choice is years of Tory rule under Jeremy Corbyn – or a return to a Labour government
Labour leadership contender Jeremy Corbyn says 'we can learn a great deal from Karl Marx'
I am the Jeremy Corbyn supporter that many will tell you doesn't exist
Public anger after French sunbather beaten up by gang for wearing a bikini in Reims park
Labour leadership: New poll shows party is now even 'less electable' than under Ed Miliband
Calais crisis: For desperate migrants it is 'England or death' as they brave dogs, riot police and speeding trains
£30 to £32k : Guru Careers: We are seeking a Trainer / IT Trainer to join an a...
£25000 - £35000 per annum: Recruitment Genius: This privately owned Fencing Co...
£17000 - £22000 per annum: Recruitment Genius: If you answer yes, this company...
£18000 - £25000 per annum: Recruitment Genius: This world leader in Online Pro...