NZ firm takes flak for energy company role

Leading New Zealand law firm, Russell McVeagh McKenzie Bartleet & Co, is facing the prospect of court action and a government inquiry over its involvement with Mercury Energy, the utility blamed for the recent power blackout in Auckland.

The law firm is being attacked on two fronts. First, the role of the firm in Mercury's management has come under fire. As a result of the company's complicated ownership structure, six partners at Russell McVeagh, acting as trustees, must approve the appointment of five of Mercury's nine board members.

Second, legal advice given by the firm to Mercury has been questioned. Australian law firm Slater & Gordon is preparing a multimillion-dollar class action against Mercury on behalf of the power company's customers, and is reported to be considering action against the law firm over advice given to the company.

A spokesman for the firm said the legal action "made no sense at all". He added: "Russell McVeagh has no power at all to influence the control or business of Mercury Energy."