Commentary: Tangled web of fees

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The Independent Online
The Social Security Select Committee now has an excellent opportunity to unravel the web of mystery spun by lawyers and accountants over the fees they charge. The bare facts of the Maxwell costs - fees totalling more than pounds 34m - appear on the face of it to be an outrageously high proportion of the amounts recovered.

The professionals involved said in their evidence that the fees are for dozens of separate and complex administrations and liquidations, as well as disputes between the various parts of the broken empire. Indeed, they are right to argue that the real issue is not so much the absolute cost as value for money.

One aspect of this the committee has tackled in its sensible main recommendation, that somebody should cut through the legal morass and find a simple, cheap plan for dividing up what is left.

Whoever does that job will not be popular, judging by the widespread anger against Touche Ross for doing a deal with Abu Dhabi, the majority shareholder of BCCI. The motive for accepting less than an optimum solution was the same - to avoid costly legal disputes.

The other aspect is whether the liquidators' and administrators' charges are reasonable, and whether creditors' committees have the expertise to resist excessive claims for fees. The suspicion is that they do not, and that lawyers and accountants in these cases charge what they want because they do not have a strong client to answer to. Frank Field will be doing a public service if he presses for and publishes a great deal more information on fees and the relationship to partners' earnings.

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