Helen Power
Robert Wiseman Dairies has expressed anger over the £700,000 it had to spend defending an Office of Fair Trading (OFT) investigation into price-rigging
By far the biggest chunk of the money went to the company's law firm Herbert Smith.
The firm successfully defended Wiseman against the price-fixing claims and last week the OFT dropped the case. While Wiseman is understood to be relatively happy with Herbert Smith, there is anger that there is no OFT mechanism to recoup the outlay on legal costs.
A spokesman for Wiseman said: "The investigation was triggered by a single complaint from a larger rival. The OFT didn't make us aware of a single complaint from a member of the public or a retailer during the investigation. The victory is balanced by a frustration over fees for professional advisers and lost management time."
Herbert Smith was appointed in 1999, when the OFT launched an earlier investigation into Wiseman. In May 2001, the OFT raided Wiseman and three other Scottish milk companies - Ballantines, Graham's Dairies and Scottish Milk. The OFT was looking for evidence of abuse of a dominant position by Wiseman and the operation of a cartel by all four players.
Herbert Smith was called back in and in the period between May 2001 and August 2002, Wiseman spent £700,000 on professional advisers. The company used Lexicon, an economics consultancy brought in by Herbert Smith, and the figure also includes payments for ongoing accountancy and PR advice. It is thought that around 80 per cent of the money was spent on the law firm's fees. The firm used a team of one partner, one assistant and a couple of floating paralegals; competition partner James Quinney led the case.
The case has attracted considerable press attention in Scotland. The Herald reported that "expensive London advisers - including competition law solicitor [sic] Herbert Smith" had landed Wiseman with a huge bill. Well-known sole practitioner Herbert Smith is no doubt grateful for the money. Wiseman's spokesman said: "We don't see ourselves as anything other than providers of liquid milk, we just want to get back to that."
