17 Jan 2018

Carillion insolvency puts question mark over legal team's future

The construction giant's high profile legal department, headed by GC and board member Richard Tapp, has an uncertain future ahead.

Dmitry Kalinovsky

Nearly 100 lawyers and paralegals have an uncertain future following the liquidation of the UK's second-largest construction company. With a £1.5bn debt pile, the company, which undertakes major government projects amongst other work, failed to get support from the government and lenders to restructure. The legal department is headed up by the high profile general counsel Richard Tapp, who is also company secretary and on the board of the company. 

Carillion Advice Services

The legal department has around 25 lawyers whilst the firm also set up an outpost, Carillion Advice Services (CAS), staffed by 70 or so paralegals who handle commoditised work - from contract management to agreements and was applying for alternative business structure status. Mr Tapp had championed CAS which dealt with outsourced legal services.  In an interview , he emphasised its importance, saying it was the one innovation he could not do without. 'Using our CAS team to support both Carillion Legal and our law firms means that the lawyers can focus on the complex, business-critical issues which only they can do – and, as one of my colleagues says, resulting in “happy lawyers.'

External advisers

Meanwhile a swathe of top City law firms are working on the insolvency.  Slaughter and May, Freshfields Bruckhaus Deringer, Dentons, Clifford Chance (CC) and Linklaters have picked up work. The Official Receiver is being advised by Dentons’ restructuring partners Nigel Barnett and Neil Griffiths. Freshfields is also involved with partners Adam Gallagher, Ken Baird, Ryan Beckwith, Craig Montgomery and Neil Golding advising.  Dentons and Freshfields are also advising PwC as the court-approved manager of the liquidation. Sackers is advising on pension issues with PwC and Freshfields. 

Legal intelligence

The Cabinet Office earlier awarded a £100,000 contract to law firm Dentons to “assist with gathering legal intelligence and consolidating information on all existing supplier contracts involving Carillion” following the “significant distressed financial issues” involving the company. The contract notice stresses the need for a rapid assessment of the Government’s direct and indirect exposure to the firm, which lurched into crisis after a catastrophic profit warning six months ago. 

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