The High Court has ruled that a practice should be responsible for a complaint to the Legal Ombudsman about a sole practitioner firm it had acquired, dating from before the acquisition. 

London firm Kerman & Co sought a judicial review after being informed that the ombudsman had jurisdiction to deal with a complaint arising from service given by sole practitioner firm PS Levy & Co to the Emanuel Davis Trust. Peter Levy had provided service to the trust between 1995 and 2010 and in 2012 joined Kerman & Co as a consultant.

Levy had confirmed he carried out all the work that was subject to the complaint and that Kerman & Co had not been involved.

But lead ombudsman Gary Garland told the firm in late 2013 that it had taken on matters that were ongoing through the merger and reopened them as Kerman & Co files. He noted the firm had agreed with Levy to 'take over his practice lock, stock and barrel'.

The Honourable Mrs Justice Patterson (pictured) said the issue centred on ombudsman scheme rules which provide that a complaint is not affected by any change in the membership of a partnership. The key issue was in the interpretation of a rule that refers to a person 'ceasing to exist'.

The firm said it was in the public interest that poor service was dealt with, but there was no public interest in a complaint being upheld against Kerman & Co in relation to matters that had nothing to do with it.

Patterson said the question remained whether the 'continued existence' of Levy affected the position.

'As Kerman & Co LLP received the benefit and goodwill of the business it cannot be unfair, in my judgment, if they also have to accept the burden,' she said.

'The phrase "ceasing to exist" has to be read in context. In my judgment, it means the cessation of the firm or legal entity subject to the regulatory regime and/or if different (and I do not think that there is a difference) the "authorised person". It is unrealistic to read the statutory provisions as referring to an individual human being.'

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