Bills bills bills

Anger has swept across the bar after it emerged that Halliwells went into administration owing barristers a total of £1.28m.

Documents leaked to The Lawyer reveal the full extent of the collapsed firm’s creditors after the firm’s joint administrators, Dermot Power and Shay Bannon of BDO, making their first report to outstanding creditors last week.

Crown Office Chambers, which has a focus on insurance, professional negligence and personal injury, is owed more than £235,000. The biggest sum of money is owed to criminal health and safety barrister Simon Antrobus, who, according to the letter sent by BDO, is due £62,475 from the failed firm.

The set’s deputy head of chambers Michael Kent QC sent the firm a bill for £44,275, which has not been settled, and personal injury barrister David Platt is owed £24,200.

The set said it was still trying to assess whether it will be able to recover any of the money owed. Senior clerk Julian Campbell told The Lawyer: “We’re working though the problem, but we’re still not sure where the recoverables will be.”

Maitland Chambers, which also has a strong focus on professional negligence work, has been left with unpaid fees of £102,000, while regional sets Kings Chambers and Exchange Chambers are owed £49,340 and £59,204 respectively.

Those affected are trying to assess whether Halliwells actually collected money owed and failed to hand it over or if the bills are still outstanding. It could also be that partners have carried on the work at a new firm and the bill will be paid when work completes.

“It’ll take ages to get to the bottom of this bloody mess,” one senior clerk said. “There’ll be problems for younger barristers but nobody will be starving because of it.”

The collapse of Halliwells will force chambers to look again at how they respond to bills that have been left unpaid. One option could be to introduce contracts between instructing solicitors and barristers. This has been unpopular within certain elements of the inns of court, where some would prefer that a ‘gentleman’s agreement’ is established and abided to by the solicitor and barrister.

The contract issue has been a sticking point for the Bar Council and Law Society for more than seven years. As one barrister put it:  “When you’re asking 15 barristers to come up with a contract that’s no longer than three pages you’re asking the near impossible – there’ll always be a problem.”

Yet there is clearly a need for formal agreements to be put in place. Commenting in The Lawyer last October, barrister Nick Issac of Tanfield Chambers said: “Contracts between barristers and solicitors (or lay clients) are long overdue.

“The current anachronistic arrangement leaves the bar without any simple or effective way of recovering unpaid fees, and is not the best PR for a profession which has claimed to be modernising as long as I have been in it, but is still seen by the public as being old-fashioned” (26 October 2009).

The Halliwells problem may not have been solved by standard contracts, but it would have at least forced chambers to look more closely at the financials of the firms they are retained by.

With more than 200 barristers on the Halliwells creditors list, it is understandable that anger with the firm’s former management has spread to the bar. It could be months before barristers learn exactly how much they can recover. In the meantime clerks should be looking closely at the financial stability of the firms they are instructed by.