The judge in the trial of 16 former KPMG partners charged over the fraudulent tax shelters scheme will hear evidence next month to decide if the firm should pay the partners’ legal fees.

This follows Judge Lewis Kaplan refusing a request by the Big Four firm to throw out the request by its former employees to pay for their defence costs.

Kaplan has already publicly questioned KPMG's decision to cap the amount of the legal fees it covers for its former partners, saying that the firm has regularly paid all costs for its employees in similar situations and urging the workers to file their suit.

Nineteen people – including the 16 former partners were indicted on charges of conspiracy and tax evasion.

Prosecutors have said that the shelters cost the government some $2.5bn in taxes.