Freshfields' M&S saga: O'Brien admits conflict and accepts fine
Barry O'Brien's fate as the sole Freshfields Bruckhaus Deringer partner shouldering the blame for a 2004 conflict of interest was sealed as early as January.
At O'Brien's disciplinary hearing last week (2 August), his counsel Mark Howard QC of Brick Court Chambers told the Solicitors Disciplinary Tribunal (SDT) that O'Brien had not had a "Damascene conversion" in terms of his culpability. He must now pay £9,000 in fines for two breaches of the Solicitors' Code of Conduct, plus the Law Society's £50,000 costs. Freshfields has said that it will pick up the bill.
Sources said O'Brien had made it clear to the Solicitors Regulation Authority (SRA) in January that he had no intention of contesting the conflict of interest allegations.
Despite this, Geoffrey Williams QC, the SRA's prosecutor in the case, apologised to the tribunal for the last-minute changes to the case, which saw O'Brien not contest his charges and matters dropped against Freshfields London corporate head Tim Jones. The SRA also decided not to pursue allegations of a Rule 4 violation (dealing with the protection of client information).
The SRA declined to comment on any aspect of the case.
O'Brien will remain at Freshfields for the foreseeable future as its head of corporate finance. He is currently a consultant at the magic circle firm, having retired from the equity last year to lock in entitlement to the Schedule 2 pension, which has now been scrapped in favour of the less generous index-linked Schedule 2a. Those pension reforms are the subject of an age discrimination claim by former insolvency partner Peter Bloxham, for which a judgment is expected next month.
O'Brien is taking a three-week break now that matters have been resolved. He told The Lawyer: "I'm clearly relieved that it's now all over. And I'm very grateful for all the support given to me by my firm and by my clients - they've been fantastic through all of this."
The conflict of interest centres on Philip Green's attempted £9bn takeover of Marks & Spencer (M&S) in 2004. O'Brien accepted an instruction from Green's bid vehicle despite M&S already being a corporate client of the firm. Freshfields had not been M&S's go-to firm for some years, but it still had one particular matter open, the contract between the high street chain and the designer of its Per Una line George Davies.
Green had staked £500m on Per Una, a source close to the deal told The Lawyer. Merrill Lynch, Green's adviser, had also flagged up Davies's contract as an important battlefield if the bid went hostile. It should be noted that Merrill Lynch and Goldman Sachs, which was also part of the consortium, were the real drivers behind Freshfields being approached in the first place.
Co-senior partner Guy Morton said: "We're grateful to Barry for volunteering, in the best interests of the firm, to bring these protracted proceedings to a close by not contesting the matter further."
It is understood that O'Brien came to this decision of his own volition and that there was no pressure for him to fall on his sword. However, there was a desire to avoid another five-day hearing this summer. The firm knew that O'Brien could not possibly win on the facts: the Court of Appeal had upheld the 2004 injunction against Freshfields, with Lord Justice Kay concluding that there was "a clear potential conflict of interest".
