Liability for Partners Actions

[JamesL456]

Hi,

I have a theoretical question-

A partnership with two partners. One of them acts negligently in their role. Can the other partner - who individually has done nothing wrong - be blamed/action brought against him?

I am guessing the answer may depend on what kind of legal partnership they have?

 

[Bob]

... and probably also what the negligent action was?

 

[JamesL456]

(This is just an example to illustrate the scenario...)

Lets say they are builders - Bob & Carl Building Services (made up business name). The negligent partner, Carl, was responsible for building something that fell down the next day.

Would the aggrieved party be pursuing Carl personally, with Bob completely absolved of any blame?

My guess would be that if they are in an ordinary (non-LLP) partnership, Bob is not in trouble. But could Bob be liable if they are both in a LLP together?

Thanks

 

[Bob]

Surely as partners they would be jointly and severally liable for any damages arising out of work contracted to the partnership

 

[Bob]

Whilst this is American Law, it is a good example of joint and several liability
http://www.law.cornell.edu/wex/joint_and_several_liability

 

[JamesL456]

Now that you say that, I've just read something to similar effect...

"Under the law of England and Wales a partnership is not a separate legal entity from its members (in the same way that a company is a separate legal entity from its members, the shareholders).Each partner can sue and be sued in their own name. The use of the name of the partnership in legal proceedings is, effectively, shorthand for the names of the partners. A creditor of the partnership may thus opt to pursue any member of a partnership personally for partnership debts."

This surprises me if I'm honest. So with two people working together on an informal basis, under no legal company/LLP/entity whatsoever, one can be legally liable for the others' work if a judge decides their relationship falls within the definition of a 'partnership'.

 

[Bob]

I guess it depends upon who contracts with the customer. In your case if Bob and Carl give a joint quote for the work to be done, then they will effectively be acting in partnership and jointly and severally liable. If Bob acts as principal and engages Carl to work with him, then Bob would be liable whether he or Carl acted negligently in performance of the contract as Carl should have been under Bob's control. This is a very black and white answer and there are of course "50 shades of grey" in between

 

[Bob]

... and if you really are researching it, don't forget that it starts with the Partnership Act 1890 and the basic definition of a partnership is " Partnership is the relation which subsists between persons carrying on a business in common with a view of profit"

 

[JamesL456]

Excellent, thanks for your help