George McPherson successful in obtaining limitation directions following restoration of LLP to Register of Companies

On 29 June 2023 Simon Gleeson (sitting as a Deputy Judge of the High Court) granted the Claimant’s application for limitation directions in respect of a limited liability partnership, dissolved in November 2016 and restored to the Register on 18 October 2022.

The LLP (a former solicitors’ practice, which acted for the Claimant between March 2012 and April 2014) opposed the application. The LLP’s business was transferred in April 2014 to a limited company run by the same individuals as the LLP, with that company assuming the obligations of the LLP to the Claimant pursuant to a letter of transfer. During the period of the LLP’s dissolution, the Claimant (at that time represented by different solicitors and counsel) had purported to issue a claim form bringing claims in negligence against the LLP arising from work done during its retainer by the Claimant, but without first restoring the LLP to the Register of Companies. The claim form was then purportedly served on the LLP, at the offices of the limited company, the same offices as those previously used by the LLP. The claim form was validly issued and served on the limited company at the same time.

At a hearing on 18 October 2022, the LLP was restored to the Register following an application by the Claimant pursuant to Companies Act 2006 section 1029(2)(f) (which permits any person with a potential legal claim against an LLP to make an application to restore). Directions relating to the restoration of the LLP were then adjourned to be addressed in the negligence proceedings.

The issue that arose on the application was whether orders should be made deeming that the claim form had been validly issued and served on the LLP, at the time it was dissolved. The Judge ruled that they should and therefore granted the application based on (1) Companies Act 2006 section 1032(1) and (2) the Court of Appeal’s decision in Joddrell v Peaktone Ltd [2013] 1 WLR 784.

Section 1032(1) provides that the ‘general effect’ of an order by the court for restoration of a limited liability partnership is that ‘the LLP is deemed to have continued in existence as if it had not been dissolved or struck off the register’. In Joddrell, the Court of Appeal (Munby LJ) confirmed that the words used in s1032(1) meant that the issue and service of a claim form, purportedly effected during the period of dissolution, were rendered effective: see [42]-[48].

This decision provides an important reminder of the sweeping retroactive effect of a restoration order. This remains an indispensable tool for claimants pursuing claims against long defunct solicitor’s practices.

George McPherson, instructed by Marvin Simons and Steffan Taylor of Seddons, acted for the successful Claimant.