Partnership Disputes

Our Partnerships Dispute Resolution team regularly provide advice to partnerships and limited liability partnerships (LLPs) as well as individual partners across a wide range of business sectors. At the outset of your instruction, we will offer you high quality partner and counsel-led advice in our first meeting. We review your partnership dispute and give you and/or your partnership the correct advice at the outset, when it matters the most.

Our multi-disciplinary practice will advise you as to the different forms of resolving your dispute. Most partnership disputes can be resolved by us with clever strategy and negotiation at the outset using alternative dispute resolution without resort to litigation. However, where ADR cannot provide the requisite result for our clients, our specialist Business Disputes solicitors will guide you through litigation in order to protect your legal rights and achieve optimal financial results.

We aim to add value to our case management and advisory work for clients by our knowledge of their trade or profession; we have expert knowledge of trade sectors such as large-scale Property Development, Wholesale Cash and Carry, Commodities and Diamond trading, Aerospace, Overseas development, Travel, Internet and other Retail. We regularly act for high net worth private clients and companies in high value litigation.

How to resolve a partnership dispute

Given that a general partnership and limited liability partnership (LLP) gives all partners equal rights within the partnership, when a dispute occurs it can often be difficult to resolve given that the parties all have equal bargaining positions and equal rights and duties.

It is essential to seek legal advice from a Partnership Dispute Resolution specialist at an early stage of a conflict with a fellow partner. Our lawyers will advise you on the optimal way to settle your dispute:

  • Conflict resolution through negotiation and/or settlement with the other partners;
  • Analysis of the partnership agreement to ensure maximum protection of your rights;
  • advising on the merits, preparing for and presenting your best case at any arbitration to resolve the dispute;
  • expert advice on mediation. For example, one dispute involved our lawyers taking part in a 24 hour mediation with another central London top 10 law firm. We mediated and ensured the successful conclusion of the dispute and our client was delighted with the optimal settlement we secured.
  • Our team are expert litigators, and in cases where a dispute cannot be resolved via ADR, our lawyers have market-leading experience of handling multi-million pound litigation and bringing complex claims to settlement.

What is a partnership?

A partnership describes the legal relationship that exists between two or more persons carrying on business with a view to a profit. Partnerships are not a separate legal corporate entity and partners individually themselves generally have unlimited liability. In essence, in a traditional partnership, each partner acts as an agent on behalf of all the other partners. This is important because an individual partner (when contracting with third parties) is acting on behalf of all of the other partners and can bind them to a contract without their express agreement.

Partnerships are wither governed by the Partnership Act 1890; or established as a limited partnership under the Limited Partnerships Act 1907 or established under the Limited Liability Partnerships Act 2000 as a limited liability partnership.

What is the partnership agreement?

If you trade as a partnership, it is likely that you will have entered into a partnership agreement tailored to your circumstances, which sets out the rights and obligations of you and your fellow partners.

In a partnership dispute, ordinarily the terms of the partnership agreement will be interpreted in order to resolve the dispute. However, in circumstances where there is no partnership agreement which defines the relationship then the terms of the Partnership Act 1890 will automatically apply by default.

What is the default position in partnerships? When can disputes arise and how can they be resolved?

The following represents the default position under the Partnership Act, all these terms can be varied by agreement between the parties, but they are demonstrated here to illustrate the types of scenarios where a dispute can arise. Our Partnership Disputes lawyers will provide tailored advice depending on your individual circumstances and depending on the terms of your partnership agreement (if any):

  • all profits and losses are shared equally between the partners. Partners must also consider whether any can draw on account of profits or whether some profits should be used to invest in the future of the partnership.
  • all partners are joint and severally liable for all the debts accrued by the partnership. The crux of this means that any partner can be sued individually or jointly.
  • all partners owe each other fiduciary duties. Therefore a claim can be issued which alleges that, for example, a partner has not promoted the success of the company or that there is a conflict of interest and one partner is competing with the partnership without the consent of the other partners. Another example could be the failure to render accounts that are true and failure to deliver up profits received.
  • restrictive covenants need to be considered because in the absence of a terms in a Partnership Agreement, a departing partner could technically start a competing business.

Our Partnership Disputes Practice Areas

Our Partnership Disputes Resolution team can advise on issues which commonly arise in a partnership, including:

  • Advising on breaches of partnership/LLP members’ agreements;
  • Conflicts of interest e.g. competing with the partnership business without consent;
  • Enforceability of restrictive covenants;
  • Breach of fiduciary duties;
  • Failure to render true accounts and deliver up profits received;
  • Fraud by a fellow partner;
  • Partner expulsions/removal;
  • Tracing of a Partnership assets;
  • Unlawful discrimination and other employment claims;
  • Winding up or dissolution of the Partnership; and
  • Partnership accounts and valuation issues.

City of London Partnership Dispute Resolution Solicitors

Our leading Partnership Dispute Resolution Solicitors and Barristers provide bespoke legal advice. We invite you to contact us so one of our legal team can assess your dispute. We can subsequently provide urgent help, advice or representation from our expert team of leading business dispute resolution lawyers. We regularly advise companies, directors, shareholders, partners and sole traders on all legal business disputes. Call or email us to start the process of instructing us; our Business Disputes Resolution team are waiting to help.

To contact a leading London Business Disputes Lawyer ☎ 02071830529