Hosking v Marathon Asset Management LLP [2016] EWHC 2418 (Ch)

In this case, the Court held that a partner who breaches his fiduciary duties can be required to forfeit partnership profits. 

Mr Hosking was a partner in Marathon.  Their limited liability partnership deed provided that a retiring partner was entitled to receive half the profits to which he would have been entitled as a working partner.  An arbitration took place between the LLP and Mr Hosking and the arbitrator decided that Mr Hosking had committed breaches of fiduciary duty in the period before he left the asset management company.

As a result, the arbitrator applied the forfeiture rule and ordered that the half share of the profits which Mr Hosking had been paid were to be forfeit.

Mr Hosking appealed against this ruling but this was dismissed, holding that if it was properly defined as remuneration, a partner's profits could be forfeited.