Editors' Blog

Freshfields’ messy M&S tribunal becomes a blame game

Posted 7/06/2007 by Deal Comment

It has been going on for so long that it is easy to forget where the disciplinary tribunal of two of Freshfields Bruckhaus Deringer’s top corporate lawyers is at (see story).

The cynic would say the Law Society was at one point hoping for just such a result – for the profession to forget that, many years ago, the body has agreed to investigate the messy affair.

Messy, you ask? The firm was found by an appeal court judge to have acted in a conflict. What could be clearer than that?

To answer that, minds need to be cast back to the time Freshfields accepted the ill-fated instruction to act for Philip Green in his £9bn bid for Marks & Spencer (M&S) – a one-time client of the firm.

It was 2004 and large corporate deals were thin on the ground. Freshfields debated the issue internally. The topics discussed ranged from how much work the firm had done for M&S in the past and whether that could be relevant in Green’s bid. The rest is history; the firm agreed to act but was thrown off after M&S, with a little help from Slaughter and May, obtained an injunction to stop it acting.

But here’s the crux: the Solicitors’ Disciplinary Tribunal (SDT) cannot consider charges against firms, only individuals. So who made the decision?

After two years of investigation, the Law Society’s regulatory arm, the Solicitors’ Regulation Authority (SRA), decided the investigation should focus on former corporate head Barry O’Brien and current corporate head Tim Jones. Head of risk Hugh Crisp and corporate chief at the time Gavin Darlington were looked at but not put forward to face the SDT.

But was the whole debacle down to O’Brien and Jones? To prove it was, the SDT will have to determine that the decision to accept the mandate was not due to Freshfields’ conflicts committee’s vote or the general excitement among the group of partners who were egging each other on to take the coveted mandate.

The SDT will have to be convinced that the decision was not due to a misinterpretation of a possible arrangement between Freshfields’ deceased M&S relationship partner and the company’s general counsel; that it was not due to an inadequate IT system or a failure of a department to argue their point more effectively.

Is it possible to prove all that? Maybe, but the fact the case is unlikely to now be heard until at least the end of the year suggests that both sides are in negotiations and would be happy to reach a settlement.

It has also been suggested that the SRA is keen to adjust its mandate to allow it to consider disciplinary issues against a whole firms, rather than focus on individuals. It is no coincidence that the SRA recently held a consultation floating the idea of reaching settlements on investigations at an earlier stage.

It seems everyone is now keen to forget about it.

paul.hodkinson@legalweek.com