The UK’s wealthiest financier, Michael Platt, and his hedge fund are suing their former lawyer for alleged professional negligence and preparing for a trial.

The claim was filed in September last year against Malcolm Gammie KC, a barrister at One Essex Court, following the billionaire and his firm being in a long-running dispute with HMRC over the tax treatment of earnings on senior traders and partners at Bluecrest under a so-called partner incentivisation plan (PIP).

Gammie, a senior tax barrister, represented Bluecrest, Platt, and Bluecrest’s former chief financial officer and partner, Andrew Dodd, in the First Tier Tribunal in 2017 and then in 2021 at the Upper Tribunal.

When the case reached the Court of Appeal in 2023, the judges ruled that senior traders and partners at the firm must pay income tax on the incentive plan rather than a lower corporation tax rate, which Bluecrest had been paying.

In the judgment, the judge had criticised Gammie’s legal approach, pointing to an analogy which Gammie drew between the PIP incentive plan and a partner who withdraws capital from the partnership and describing it as “not exact” and “apt to mislead.”

In a case management conference on Friday ahead of a trial, the Commercial Court heard issues concerning tax treatment in relation to the incentive plan after Platt’s decision to move the hedge fund’s operational headquarters from London to Geneva in 2010 for tax purposes.

The court also heard issues concerning whether Platt and Dodd’s bank and credit card statements dating back 17 years should be used as evidence in the trial, which Bluecrest’s barrister said would be “both time consuming and could turn into an expensive wild goose chase.”

The trial is expected to assess whether Gammie acted negligently by not advising Platt and Dodd to use Swiss tax residency arguments during the legal dispute with HMRC, and whether this led to “a lost opportunity” to pursue different arguments, Bluecrest’s barrister said.

He added that if the documents “can be found, perhaps there will be thousands of pages, which might mean the defendant could make intrusive inquiries” about other things.

Judge Mr Justice Stanley told the court the documents “should be included” but said “it will require careful thought to be given on how the bank statements are disclosed and how they are deployed if they are to be deployed in a public trial”.

Members of an LLP, a structure Bluecrest uses, are treated as self-employed partners, meaning they don’t pay the 15 per cent employer’s national insurance contributions on their pay.

HMRC taking ‘aggressive’ stance on LLPs

This comes after a separate landmark ruling in July in which the UK’s Supreme Court ruled against the hedge fund run by Platt, finding that partners in a Limited Liability Partnership (LLPs) must be taxed as employees rather than as self-employed profit-sharers. Bluecrest now faces a near £200m tax bill as a result of the ruling.

The judge unanimously rejected BlueCrest’s argument that its partners were technically self-employed and therefore not subject to the same income tax and national insurance as normal employees.

The ruling sent shock-waves through the professional services sector, whom the vast majority use the LLP structure, raising concern over whether it would leave them liable to pay hefty tax bills to HMRC.

has since revealed the UK tax authority is actively writing to limited liability partnerships (LLPs) as firms race to reassess their members’ tax status after the landmark legal ruling, even as both sides “hold their cards close to their chests.”

Gammie and HMRC declined to comment. BlueCrest was contacted for comment.

The trial date is yet to be decided.