Lovells' and BCCI liquidators' fees to get independent scrutiny

BCCI creditors are to appoint a watchdog to oversee the liquidators and their lawyer, Lovell White Durrant, after they ran up fees totalling $313m over the past seven years.

A report to the Department of Trade and Industry last December revealed that legal fees up to January 1997 totalled $94.5m.

This figure includes counsels' fees and some of the costs of other parties in two High Court hearings in 1996.

But Lovells' fees are believed to account for by far the greatest proportion of this.

The liquidators from Deloitte & Touche charged $219m over the same period.

The huge bills reportedly worried some creditor members of the English liquidation committee, which was set up in 1993 to supervise the work of the liquidators.

They are seeking to appoint an insolvency practitioner from Coopers & Lybrand, likely to be Chris Barlow, the liquidator of Polly Peck, to check that all the fees are in order.

It is thought to be the first time an independent receiver has been sought in this way to focus on fees.

The committee consists of seven representatives of creditors but is chaired by one of the Deloittes liquidators. Deloittes is understood to be extremely sensitive about its fees and all members of the committee have had to sign a confidentiality agreement.

Neither Bernard Clarke, insolvency partner at Memery Crystal, who is advising the liquidation committee, nor Lovells partner Peter Horrocks, who is leading the team advising the liquidators, would comment because of the confidentiality agreement.

But Horrocks pointed out that the liquidation committee had 'the right to have legal fees taxed if they wish to'.

He added that the committee had done a good job of assessing the liquidators' remuneration and its disbursements on legal fees.

A spokesman for Deloittes said the liquidation committee had approved all fees up to 15 October 1997.

He said that the appointment of the Coopers insolvency partner 'was not really to have a review of fees but to give the committee an objective view of insolvency practices'.

DTI ministers have already warned that they will be looking closely at the level of fees charged by lawyers and accountants in liquidations, after the completion of an inquiry into liquidations being conducted by Mr Justice Ferris.

Last July Judge Ferris called the £705,000 charged by Nabarro Nathanson and the £744,000 billed by Buchler Philips in the Maxwell insolvency 'profoundly shocking'.

The total bill was only slightly less than the £1,672,500 total which was eventually recovered from the Maxwell estate.