Bermuda’s Government is defending its practice of selecting private sector lawyers based on a Minister’s subjective appraisal of their abilities.
But a political row over one particular appointment raises questions over whether the longstanding practice adequately protects public funds.
According to the island’s Tourism Minister Shawn Crockwell, the lawyer-client relationship does not lend itself to procurement processes like a Request for Proposal which are designed to protect taxpayers’ fund and ensure value for money.
In the midst of a row over what one Opposition Senator calls a “friends and family” hiring decision by Home Affairs Minister Michael Fahy, former Attorney General Mark Pettingill says the system for selecting outside counsel was improved under his tenure.
Crockwell told Politica that he hired his former senior legal colleague Alan Dunch because of, not in spite of, their previous work relationship at MJM Limited.
In 2013, Crockwell hired Dunch to provide advice on legislation setting up the Bermuda Tourism Authority and recently appointed him chairman of Bermuda’s Gaming Commission.
Minister Fahy’s decision to hire Dunch to act for Government in litigation over the Corporation of Hamilton sparked criticism from the Opposition Progressive Labour Party. Fozeia Rana-Fahy, the Minister’s wife, is an MJM director and the Minister is asking parliament to approve a retainer of about $1.4 million for the work.
Government engages outside lawyers when it is deemed that the Attorney Generals’ Chambers is overburdened or required specialist knowledge is unavailable.
Dunch’s engagement has been defended by government supporters who claim he is the island’s top lawyer.
The former Progressive Labour Party government also had its “top lawyer” – Delroy Duncan whose firm Trott and Duncan did a significant amount of work for the Government while the PLP was in office. That changed after the December 2012 general election when the PLP was sent to the opposition benches.
PLP MP Kim Wilson was a partner at Trott and Duncan until weeks before she was appointed Attorney General while serving as a Senator.
I’m fairly certain that when I was the AG, I never retained the services of Trott and Duncan. But I don’t remember,” she said.
Trott and Duncan’s initial engagement preceded Ms Wilson’s appointment to the Senate.
Pettingill, the new Government’s first Attorney General, said that he inherited a system that allowed Ministers to hire lawyers without consulting the AG’s Chambers but he instituted a new policy requiring his approval.
Ms Wilson confirmed that saying that Ministries had control of their own legal services budget and could spend it as they wished when she was AG.
Nine times out of ten, if it is a legal matter, then they would seek counsel in chambers. But there’s no particular policy that they must use lawyers in chambers. Chambers is more equipped to dealing with civil litigation representing the Government so if you have a specialised area of law like telecommunications, its not unusual for the Ministry to go out and seek their own legal advice and pay for it out of their budget.”
Still, the AG does not currently get involved in selecting which private sector lawyers get to act on behalf of other Ministries despite Pettingill’s policy change.
Among the new One Bermuda Alliance’s election promises was to set up an independent Bermuda Tourism Authority within the first six months.
The reason I chose Mr Dunch is my respect for his knowledge and ability. In my opinion, he is the best attorney on the island and I have that opinion because I’ve worked with him. And I have seen his ability up close,” said Crockwell.
He said it makes no sense to put a legal brief out to tender. “You don’t know how much its going to cost. Its based on how many hours are put into a project.”
Enabling legislation to set up the BTA had to be drafted and passed within a “strict timeframe” and the Attorney General’s Chambers was overburdened, the Minister said.
In order to meet my timeline, it was advised to me that I might have to seek outside counsel to do a comparative analysis of other jurisdictions basically providing a framework for the BTA legislation.
At the end of the day it has to be approved by the Attorney General’s Chambers but what we were doing is we were getting Mr Dunch to have a look at other jurisdictions, do a comparative analysis and he was assisting with some legal advice in terms of what we were trying to achieve and some of the best models to look at.”
We’ve seen previous lawyers work for certain administrations because of the relationship they had.”
But he added that he saw nothing inappropriate with that as in his view selecting a lawyer was similar to selecting a doctor. Its a question of “confidence” and “comfort”, the Minister indicated.
I think its important when you are talking about relationships like lawyers and clients, its very similar – you pick a doctor and you pick a lawyer that you are comfortable with.”
Crockwell said he would understand concerns about conflict of interest if he was still employed by MJM when he engaged Dunch. But he resigned his private employment to enter politics.
The day I became a Minister I ceased my employment with MJM Limited. Certainly, if I was employed there and I was hiring my own firm then I would see the conflict. But the fact that I worked there and I knew the individuals there and I knew the quality of work there helped frame my ability to chose them. I would choose Alan Dunch any day, every day for work that falls under his bailiwick.”
He said he had worked closely with Dunch and maintained a good relationship with MJM but had no intention of returning to the firm in the same capacity.
I’m not saying I won’t go back but I may try and diversify and move into a different area within law. That said, I recently appointed Alan Dunch to the Gaming Commission – he’s the Chairman of the Gaming Commission so I have a great deal of respect for him, for his integrity, for his abilities. The fact that I once worked side by side – he was my senior at MJM – I don’t think is a conflict and should not preclude his firm from receiving work from the government or preclude the government from receiving his expertise.”
According to the Bermuda Bar Association website , there are 71 firms licensed to practice law in Bermuda.
We asked both Dunch and Duncan the type of work they had done for the Government and whether they had been given work when the party in power changed.
As it is a matter of public record, we are happy to confirm that this firm acts for the Government in (1) the arbitration proceedings initiated by the Allied Trust in relation to the voiding of the leases of the Hamilton Waterfront, and (2) the two constitutional actions currently pending before the Supreme Court and brought by the Allied Trust as to one as well as, purportedly, the Corporation of Hamilton as to the other,” was Dunch’s emailed reply.
Regrettably, the Barrister’s Code of Professional Conduct and the doctrine of solicitor/client privilege preclude us from responding to you any further.
We say regrettably because, but for the professional constraints that are imposed upon us, we would have welcomed the opportunity to correct the stream of defamatory misinformation that has recently been disseminated, clearly for political reasons, by one or two persons who clearly know not of what they speak.”
Duncan was unable to reply before publication.
Crockwell made it clear at the start of our conversation that he would not discuss Municipalities Minister Michael Fahy’s decision to hire MJM to assist with litigation involving the Corporation of Hamilton.
Wilson said that while she is not overly familiar with the Corporation of Hamilton litigation, “it would seem to me that it involves an area of law in which certainly chambers would be capable and competent to provide representation. It is a civil matter.”
We have some very skilled litigators in chambers. Certainly it wouldn’t have cost $1.5 million.”
Fahy’s funding request totals $1,479,040 – all but a “small amount” of which is destined for legal fees associated with ongoing litigation in connection with government’s decision to void a developer’s lease of City of Hamilton property.
In a statement on the issue the Home Affairs Minister said that “less than half” had been spent on the legal fees which was earmarked for “overseas Counsel, expert advice, preparation of pleadings, witness statements and other litigation expenses” connected to the waterfront arbitration and a Supreme Court constitutional challenge. He has refused to answer any of our questions on the matter but we have determined that the amount being requested for the legal fees is $1.4 million.
The AG’s chambers was allocated a budget of $4 million for the current fiscal year which ends in two weeks. Of the total, $1.6 million was for its advisory section which provides advice to departments, handles litigation and collects debts owing to the Government. That money pays the salaries of the Solicitor General, two Deputy Solicitors-General, a Senior Crown Counsel, six Crown Counsels and three administrative assistants. Fahy’s legal funding request now before parliament represents 88 percent of the AG’s advisory section budget.
Another $1.4 million was allocated for the legislative drafting section – money which paid the salaries of the Chief Parliamentary Counsel, Deputy Chief Parliamentary Counsel, five Parliamentary Counsel, two Assistant Parliamentary Counsel, a Legislative Database Manager, a Legislative Editor, a Legislative Administrator and a Legislative Database Administrator.
The drafting section provides advice on proposals for legislation, drafts legislation for all Government departments and supports Ministers as legislation progresses through the legislature. In addition, the section advises Ministers and the Governor on legal and constitutional issues. (We were unable to determine how much Dunch was paid for his comparative study of Tourism Authority legislation.)
The Government’s legal aid budget, to assist those who can least afford legal representation, is $2.6 million. But that is set to be reduced by 23 percent for the next fiscal year.
Bermuda’s 2011 Good Governance law, intended to ensure best practice in the awarding of government contracts, does not exclude legal services procurement from its purview. It established the Office of Project Management and Procurement to prevent bias in the awarding of Government contracts, advise on best practice and ensure that the Government gets value for money. And it defines collusion in the awarding of Government contracts as a criminal offence. The law also criminalises public officials involved in the awarding of a contract who fail to declare an interest in the contract bidders whether that interest is “legal, beneficial, fiduciary, family or otherwise”.
In the UK, lawyers who wish to be considered for government work can apply to be listed on one of several “counsel panels” depending on their experience level. Government department and agencies are required to use the panels and hourly fees and rates are fixed and posted on a public facing website. Panel appointments are for five years and work is not guaranteed. The system also accommodates “off panel” lawyers if the Attorney General is satisfied that the work cannot be done by the top panel counsel. Off panel lawyers have to be nominated to the AG by the relevant department but panel counsel are preferred.
And in the United States, local governments are expected to follow best practice protocols when hiring private sector lawyers. The protocols apply equally to school districts with 5,000 students and counties of 70,000 people and include measures to ensure transparency and competition in the award of legal contracts, and policies and procedures that govern the management of internal and outside counsel. A recent probe by the New Jersey Office of the State Comptroller found that failure to adhere to best practices led to over billing, public officers awarding work to firms they were affiliated with and other deficiencies, including suspected criminal activity.
The system in the Cayman Islands, another of the UK’s colonies, appears to be very similar to Bermuda’s.
There, a similar row broke out when it emerged that $1.5 million of public funds had been spent on outside counsel over three budget years to assist with 51 cases.
This article belongs to Politica ! The original article can be found here: When Government hires private sector lawyers
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