MP accuses Linklaters and Nabarro partners of 'cover up' over BHS sale

Linklaters and Nabarro partners have been criticised for “covering up” details of the advice they provided on the sale of BHS prior to its collapse, by Labour MP and chair of the Work and Pensions Select Committee Frank Field.

Partners of both firms appeared before the House of Commons Business, Innovation and Skills Committee and the Work and Pensions Committee on Monday (23 May), as part of the ongoing inquiry into the sale of BHS to Retail Acquisitions by retail tycoon Philip Green’s Arcadia Group for £1 last year.

Linklaters corporate partner Owen Clay, who advised Arcadia on the sale, and Nabarro partner Ian Greenstreet, who advised Arcadia owner Taveta on pensions matters between 2009 and 2015, were both questioned on the sale.

At various points, Greenstreet – and on one occasion Clay – declined to answer questions, citing client privilege – which neither of their clients had waived.

Speaking to Legal Week following Monday’s hearing, Field expressed his frustration at what he saw as a lack of detail in the partners’ responses to questions.

Field said: “I just think it’s too easy to claim privilege. It’s just laziness and a cover up.”

He added: “Fee income seems to muddle people’s memories.”

The Labour MP went on to say that he had requested details of the fees the firms received for advising on the deal.

Field spoke to Legal Week ahead of Olswang’s appearance before the committees this morning.

Olswang advised Retail Acquisitions on the acquisition with a team led by London corporate partner and head of the firm’s leisure and retail practice, David Roberts.

Roberts had been expected to appear before the committees but was replaced by Olswang corporate partner and general counsel, Stephen Hermer.

Hermer was questioned by MPs on Olswang’s role and whether the due diligence carried out into Retail Acquisitions director Dominic Chappell by Olswang was satisfactory.

Chappell had been declared bankrupt twice prior to buying BHS.

Hermer told the committee: “I think in this context there was clearly a question mark over Mr Chappell’s business acumen and a judgement call needed to be made, in the context of a rescue bid, of how much weight to put on that background.”

He told Labour MP Iain Wright, chair of the Business, Innovation & Skills Committee: “I couldn’t make a judgement about his character now.”

Wright also asked Hermer, along with representatives from accountant Grant Thornton and investor Cornhill Capital, who also appeared at today’s hearing, what led them to believe that “Chappell could turn around BHS in a way that Philip Green couldn’t?”

Hermer replied: “We wouldn’t expect to get involved in the business plan review and could not be expected to make a judgement as to its viability.”

On Monday (23 May), Clay was questioned by MPs on whether he was satisfied with the due diligence conducted into Chappell.

Clay defended the due diligence that Olswang had conducted on Retail Acquisitions and said that he “was assured that they had done a very detailed due diligence on that person”.

Pensions partners from Nabarro and Eversheds also faced the committees’ questioning on BHS’s £571m pension deficit.

Greenstreet cited client privilege for making him “constrained on what I can and cannot say” and stated that he could not “comment on specific advice related to the transaction”.

A spokesperson for Linklaters said: “The criticisms of Mr Clay’s oral evidence to the select committees that are attributed to Mr Field are wholly untrue and highly inappropriate. We have written to the select committees to explain this. Only one question put to Mr Clay in the oral evidence session was not answered by him on the basis that it invited the disclosure of legally privileged information. A client’s right to legal professional privilege is long established in the common law and a solicitor is not entitled to waive it.”

Nabarro declined to comment.