Friends of the Earth forces U-turn from Chancellor on reporting rules

Friends of the Earth in-house lawyer Phil Michaels is celebrating after forcing the Chancellor to make a U-turn on company reporting rules.

Last month the charity launched legal proceedings against the Chancellor Gordon Brown and Trade Secretary Alan Johnson over the decision to scrap the Operating and Financial Review (OFR), which required companies to report on their environmental and social impact. Michaels was taking the ministers to court for absence of fair consultation after Brown announced in his pre-Budget statement that the OFR reporting requirement would no longer apply.

In a dramatic change of heart, Brown has now agreed to consult on the reporting rules and has agreed to pay the environmental group’s legal costs.

In an exclusive statement to The Lawyer, Michaels said: “Friends of the Earth applied for judicial review of the Chancellor’s decision to abolish the OFR because it was procedurally unfair and irrational. The fact that the Government has agreed to pay our legal costs and issue a fresh consultation indicates that it was aware of the real risks involved in proceeding with the case and that it appreciated the shakiness of its legal ground…We will certainly be watching very carefully to make sure that the new consultation is carried out fairly.”

The Friends of the Earth action is just one of the ways lawyers and charities have banded together to challenge the Government over changes to the Company Law Reform Bill (CLRB).

In addition, the Corporate Responsibility Coalition (CORE), which is comprised of more than 130 charities, is campaigning to ensure the CLRB contains suitable provision for transparent reporting on social and environmental issues and directors’ duties.

David Chivers QC of Erskine Chambers and Richard Lord QC of Brick Court are assisting the CORE in making representations to Government ministers.