Frances Fitzgerald (Dublin Mid West, Fine Gael) | Oireachtas source

Amendments No. 125 relates to the insertion of a new Chapter 3 of Part 8. The new Chapter provides for the introduction of an option for solicitors firms and legal partnerships to operate with the benefits of limited liability within a limited liability partnership business model with protection for the consumer in the form of both professional indemnity insurance and ongoing regulatory oversight by the authority. The amendments include the introduction of an option for both ordinary solicitors' firms and legal partnerships which are partnerships between solicitors and barristers or between barristers only, as provided for under Part 8, to operate with the benefit of limited liability within a limited liability partnership model. It is proposed to allow such firms, subject to certain safeguards, to limit the personal liability of the individual partners of the firm for its debts, obligations and liabilities. This is in line with precedent in several other comparable common law jurisdictions in which partnerships have been changed to allow for LLPs.

On amendment No. 126, it should be noted that the LLP provisions are not at this stage being extended to cover multidisciplinary practice provisions. As it is considered that the business forms which may be assumed by MDPs when they come into being and, in particular, whether they should be able to operate in full as LLPs when some of the professions participating may not be otherwise entitled to avail of such partnerships, is something which should be covered in the research and consultation process. The specific features of the new regime for LLPs include a system of authorisation and registration subject to appropriate fees through the LSRA of those partnerships that wish to become LLP and the maintenance of a publicly available register of these. Protection will be provided for the consumer in the form of an obligation on the firms to have substantial professional indemnity insurance. We discussed the PII earlier. The authority will have the power to set higher limits for the personal indemnity insurance if it sees fit in respect of the legal firms operating as LLPs as opposed to traditional partnerships. The authority will be required to maintain a register of limited liability partnerships. It provides for automatic loss of the shield from personal liability for partners who are found to have committed misconduct or crime in certain circumstances.

There is a clawback provision where a partner takes money out of the business when its assets exceed its liabilities, ongoing oversight by the legal service regulatory authority with an option to direct compliance and enforce by recourse to the High Court as necessary to enforce compliance. LLPs will be required to notify clients and creditors upon registration and commencement as an LLP. In the event of an insolvency of an LLP, the property of the partnership will be available to the creditors. In addition, there is a new section 113 which outlines the procedures involved in the cessation of operations as a limited liability partnership. Amendment No. 133 inserts a new section that permits the authority to make regulations on the operation of limited liability partnerships.

Amendment No. 134 disapplies section 3 of the Registration of Business Names Act 1963 with regard to partnerships operating in this Bill. Instead, anyone changing name as such a partner will be covered by the relevant provisions of the Bill.

The final amendment in this section makes it clear that although section 27 of the Companies Act 2014 prohibits the use of the description "limited" in business names, in certain circumstances under the Bill, the description can be used for limited liability practices.