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£500k magic circle Eurostar sell-off fee defended by Treasury


By Thomas Patrick O'Brien

25 November 2015 at 09:00 BST


The Treasury has rebuffed critics of the decision to use lawyers from magic circle firms to provide legal counsel over the transfer of the Government's stake in the Eurostar franchise.

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Concerns emerged with a report from the National Audit Office earlier in the month when the bill from legal firm Freshfields Bruckhaus Deringer that amounted to £2.8m was described ‘more costly than expected’. One of the costs highlighted included an estimated £500,000 spent on the internal allocation of shares from the Department of Transport to the Treasury.

'Cosy' reationship 

Conservative MP David Mowat of the Public Accounts Committee last week spoke of his view that the ‘cosy’ relationship between law firms and the government procurement departments could be a factor in why civil servants have not yet suggested capping legal retainer fees. Fellow committee member, Stephen Phillips MP, an ex-Freshfield lawyer, also made the suggestion that a ‘paucity’ of expertise across the legal sector may be frustrating the Government’s ability to avoid overpaying for external professional skills.

A 'very expensive technicality' 

Senior officer for the sale of Eurostar, Roger Lowe, said the £500,000 expense billed by Freshfields in 2014 covered a two-part cost of asset transferal out of a subsidiary company. Nearly £200,000 was billed in preparation work and the remaining £300,000 for the actual transfer. Mr Lowe iterated that the project had been tendered widely and Fresfields offered the best bid and were currently doing a ‘first-rate job.’ Committee chair Meg Hillier MP described the transfer as a ‘very expensive technicality.’ Source: Law Gazette

 
   
 
 
 

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