The Supreme Court has ruled that LLP members are protected by whistle-blowing legislation paving the way for the first whistle-blowing case against a law firm.
Former Clyde & Co partner Krista Bates van Winkelhof alleged that she was ejected from the firm after blowing the whistle on alleged bribery and corruption by Kibuta Ongwamuhana, the managing partner of Clyde & Co’s Tanzanian associate firm Ako Law. Matrix Chambers ’ Tom Linden QC was instructed by Mishcon de Reya partner Joanna Blackburn to lead the case.
The court held that Bates van Winkelhof falls under the second category of definition of a “worker” in the 1996 Employment Rights Act because she was signed up to the firm’s Members’ Agreement under which she performed services for the firm which was neither her client or her customer.
Blackburn said: “We are delighted that the UK Supreme Court has endorsed our view that the law does protect partners in LLPs and we are pleased that after more than three years of legal wrangling, Ms Bates van Winkelhof’s claims can finally be heard in the Employment Tribunal.”
The case will have major ramifications for other LLPs. Taylor Wessing partner Shane Gleghorn commented: “This decision could be very significant for members of LLPs such as law firms, hedge fund companies and accountants, as it will decide whether partners of such companies are entitled to the same legal protection currently offered to employees.”
Blackburn added: “Partners are the people most likely to become aware of wrongdoing in LLPs but risked being at the greatest disadvantage with respect to protection. High profile collapses like Enron and Arthur Anderson demonstrate why we need partners to speak out if they spot wrongdoing. It is in everyone’s long-term interests for partners to have the same whistle-blowing protection that all other employees already enjoy.”
The firm had disputed the claim on the grounds that the London court had no jurisdiction to hear it because members of LLPs are not workers as defined by section 230(3) of the Employment Rights Act. The first instance Employment Tribunal agreed, but the Employment Appeal Tribunal overturned the decision.
The Court of Appeal (CoA) upheld the EAT ruling, stating that she could not pursue the whistle-blowing claims, but ruled that her pregnancy, sex discrimination employment case against the firm could continue (26 September 2012).
The firm had attempted to have the discrimination thrown out on grounds of jurisdiction. At the final court Clydes partner Nick Elwell-Sutton instructed Kobre & Kim barrister Andrew Stafford QC to respond to the appeal.
In a statement Clydes said: “We were surprised that the Supreme Court overruled the Court of Appeal’s decision. The court was not concerned with the merits of Ms Bates van Winkelhof’s underlying claims. Their decision was confined to the narrow point of whether a partner can be considered a ‘worker’ under the 1998 Act. The knock-on consequences of this judgment are potentially significant and far-reaching and could affect partnerships both large and small.
“We strongly deny Ms Bates van Winkelhof’s still untested allegations. We contend the process of her removal from the partnership was set in place before her pregnancy was known to the firm, and before her disclosures. Her refusal throughout to follow the dispute resolution mechanism available within the partnership agreement remains a disappointment.”
Whistle-blowing charity Public Concern at Work intervened in the case having instructed Serle Court’s John Machell QC and Adil Mohamedbhai and Littleton Chambers’ Jonathan Cohen. The lead partner was Clare Murray of CM Murray (20 January 2014).
Lords Justice Neuberger, Clarke, Wilson and Carnwath and Lady Justice Hale were unanimous in their ruling.
The legal line up:
For the appellant, Krista Bates van Winkelhof:
Matrix Chambers’ Tom Linden QC and Essex Court Chambers’ David Craig and Essex Court Chambers’ Claudia Renton instructed by Mishcon de Reya employment head Joanna Blackburn
For the respondents, Clyde & Co
Kobre & Kim barrister Andrew Stafford QC and Chris Quinn and Nicholas Goodfellow instructed by Clyde & Co partner Nick Elwell-Sutton
For the intervener, Public Concern at Work
Serle Court’s John Machell QC and Adil Mohamedbhai and Littleton Chambers’ Jonathan Cohen instructed by CM Murray partner Clare Murray