FOX & Gibbons' Turkish office has faced claims it paid bribes to the local authorities after they discovered it was running a bogus tax account.
The claims were made by Paul Cadney, the counsel for former Fox & Gibbons solicitor Ian Philliskirk, at Cardiff Industrial tribunal last week.
However, it was not necessary for him to pursue the claims because Fox & Gibbons admitted liability for breaching an employment contract with Philliskirk, the former co-head of its Turkish office.
The firm was ordered to pay Philliskirk £3,600 for one month's notice plus expenses. The Lawyer understands that it would have contested the bribery claims if they had been pursued.
During the hearing Cadney said had Fox & Gibbons not admitted liability, he would have claimed the Istanbul office, incorporated as a limited company in Gibraltar, was running two accounts, 'one for the Turkish tax authorities and the other, a true account'. He claimed that when the Turkish authorities discovered this, 'a bribe was paid' to the tax officials.
Philliskirk resigned from the office in April last year after only two months at the firm.
Cadney said that Philliskirk's appointment was ' a disaster waiting to happen'.
According to Cadney, his written responsibilities were to take joint charge of the running of the office with its joint venture Turkish partner Ecce Guner. But this fact had 'not been communicated' to Guner, who in a letter to Fox & Gibbons after a previous UK partner had left, insisted that any future UK appointee should be subordinate to her.
'Her understanding was that the applicant was subordinate to her in the management of that office,' said Cadney.
Philliskirk, a qualified barrister at Fox & Gibbons on an annual salary of £40,000, was still working a three-month probationary period when he resigned and both parties were bound to only one month's notice.
But his counsel argued that since Fox & Gibbons had breached the 'implied terms of trust and confidence' in its contract with Philliskirk, it should have to pay three months notice the notice that would have been required after the probationary period.
Fox & Gibbons' counsel Martyn Barklem, instructed by Hextall Erskine, rejected this argument. The tribunal agreed, although it ordered Fox & Gibbons to pay most of Philliskirk's claimed expenses, including the cost of furnishing his flat in Istanbul.
The Lawyer revealed in 1996 that Philliskirk's predecessor in Istanbul Fox & Gibbons partner Christopher Dixon who was sent out to help establish the office in July 1996, resigned in November 1996 to go into partnership in Dubai with another former Fox & Gibbons partner, Jeremy Key.