Disqualification proceedings against LLP members

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The Secretary of State brought disqualification proceedings against two members of an LLP. The two members applied to strike out the proceedings by questioning whether Regulation 4(2) of the LLP Regulations 2001 in substituting “member” of an LLP for “director” in the CDDA, intended to include junior members of a large LLP who had no involvement in the management of the LLP within the purview of disqualification? If Parliament did not, where do you draw the line?

The court concluded that:

  • All members of an LLP are potentially liable to face disqualification proceedings
  • There is no qualification to the jurisdiction over all members of an LLP under section 6 of the CDDA that the member has to be on a management board or at a level equivalent to a director of a company
  • The conduct that can be relied on is anything that is done in the capacity of a member of the LLP
  • The test for unfitness is the same as in relation to companies – ie, it makes the member unfit to be concerned in the management of a company or an LLP
  • There is no line drawn in the legislation, and there is no justification for implying such a line, as to the relevant conduct that can be relied on by the Secretary of State.

In the matter of Bell Pottinger LLP [2021] EWHC 672 (Ch)

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