UK: England and Wales: partners and the forfeiture of profits

Judgment was given yesterday in Hosking v Marathon Asset Management Llp [2016] EWHC 2418 (Ch). This is an important authority on the liability of fiduciaries and, in particular, partners and members of limited liability partnerships. At issue was whether the principle that a fiduciary acting in breach of fiduciary duty may lose his right to remuneration applied also to the right to a share in the profit of a partnership. Mr Justice Newey held that the right to profit was potentially subject to forfeiture and noted that whilst the principle had mainly been invoked in relation to agents, its rationale extended more widely; he noted also that the absence of a provision for forfeiture in the contractual documentation did not mean there was no scope for its operation.