The government has made its first firm commitment to introducing limited liability legislation in the UK.
Ian Lang, the Trade and Industry Secretary, said in a parliamentary written answer last week that he would publish proposals for legislation before Easter, but did not reveal whether partnerships would have to disclose more financial information in return for limiting their exposure to claimants.
Lang added that even if partnerships registered for limited liability offshore, they would still be required to file the same financial details as would be required under UK registration.
Several of the Big Six accountancy firms have been considering registering under Jersey's new limited liability legislation. The bill is yet to get approval from the Privy Council, and City law firms, keen to limit their liability, are watching developments closely.
Giles Henderson, senior partner of Slaughter and May, said: “We will have to wait and see what the disclosure requirements are. We are watching developments. I think that it is reasonable for the Government to enforce equal disclosure on and offshore. I wouldn't expect this firm to think that it could move to limited liability offshore and escape obligations that it would face in the UK.”
John Rink, managing partner of Allen & Overy, said: “I welcome this. I have always said it is a nonsense that in order to get the protection we need to go to Jersey.”