UK’s wealthiest financier Michael Platt sues own lawyer for professional negligence

Michael Platt, the UK's wealthiest financier, is taking his former lawyer, Malcolm Gammie KC, to court for professional negligence. The lawsuit was filed in September after Bluecrest, Platt's hedge fund, was embroiled in a long-standing dispute with HMRC regarding the tax treatment of earnings from senior traders and partners under a so-called partner incentivisation plan (PIP).

Gammie, a senior tax barrister, represented Bluecrest, Platt, and their former chief financial officer in various tribunals. The Court of Appeal ruled in 2023 that senior traders and partners must pay income tax on the PIP instead of a lower corporation tax rate. Gammie's legal approach was criticized in the judgment, particularly his analogy comparing the PIP to a partner withdrawing capital.

The Commercial Court has heard issues related to tax treatment, the use of bank and credit card statements dating back 17 years, and the potential for intrusive inquiries. The trial's purpose is to determine if Gammie negligently failed to advise Platt and Dodd to use Swiss tax residency arguments during the HMRC dispute, potentially resulting in a lost opportunity to argue differently.

Judge Mr Justice Stanley allowed the bank statements to be included in the trial but emphasized the need for careful consideration in their disclosure and deployment. The ruling by the UK's Supreme Court in July, which taxed LLP partners as employees rather than self-employed profit-sharers, has led to a nearly £200 million tax bill for Bluecrest, causing concern for other LLP users in the professional services sector.

Both Gammie and HMRC declined to comment, while Bluecrest has not yet provided a statement. A trial date has yet to be determined.