Dibbs runs up £750,000 bill in Imro investigation

Dibb Lupton Alsop's share of the costs run up by Imro, in its investigation of five Morgan Grenfell directors involved in the Peter Young affair came to £750,000.

The length and cost of the investigation has been criticised by some in the City, one solicitor called the costs “astronomical”.

Four of the directors – Glyn Owen, Paul Ebling, Graham Kane and Michael Wheatley – were suspended from working in the City earlier this month under a settlement with Imro by which they had to pay Imro's costs.

Although Morgan Grenfell agreed to pay the costs for the four directors, it is understood it was not prepared to fund the directors to go before an independent tribunal to argue their case.

The directors have said the risk of funding Imro's costs if they lost at tribunal had forced them into settling.

Owen last week wrote to the chairman of Imro, Douglas McDougall, to ask for an inquiry into Imro's investigative process. He complained about the size of the costs he could face if he went to an independent tribunal, the length of the investigation and the way it was conducted.

It is believed he will request that the inquiry be carried out by an independent body, not the FSA, to which three key Imro staff have been transferred.

Each of the five directors had to pay around £200,000 for Imro's costs. The Lawyer can reveal that this breaks down into £150,000 for Dibbs' fees; counsels' fees of £15,000, disbursements of £5000 and £30,000 as a contribution towards the costs of Imro's investigation.

Dibbs' partner Peter Bibby, led a team of two solicitors and several paralegals. Bibby himself was in turn supervised by the firm's head of litigation Neil Micklethwaite who has said he cannot comment on the level of fees.

For one director, Bibby billed around 280 hours at £175 an hour, of the two assistants one billed around 550 hours at £135 an hour and paralegals at the firm charged almost 600 hours at £50 an hour. Other directors were billed similar amounts.

The firm advised Imro from the start of the Peter Young investigation in October 1996, including the investigation and subsequent fining of Deutsche Morgan Grenfell and the Royal Bank of Scotland and General Accident, the two trustees of the funds Peter Young managed. All three paid Imro's costs.

The four directors each had their own solicitors. Referring to the overall costs of the case, one of the solicitors said: “Imro has over-engineered this case. It could have been handled much more cost effectively.”

The solicitor also criticised the concept of making individuals, as opposed to companies, pay regulators' costs.

“You have to ask, under what circumstances is it right to charge to individuals the costs of a regulator carrying out its public duties?

“Investigation costs, as against the costs of disciplinary proceedings, should only be recovered against individuals in circumstances such as serious fraud or misdemeanours. Any financial penalty ought to be in the form of a fine.”