Herbert Smith wins billion-pound DTI cleanup; Slaughters victim of political fallout

Slaughter and May

has been left reeling after it was excluded from a tender to advise the Department of Trade and Industry (DTI) on the commercial aspects of a multibillion-pound nuclear cleanup programme.

The contract, awarded to Herbert Smith after pitching against a number of City firms, will initially run for two years.

Herbert Smith corporate head Caroline Goodall will lead the team advising the DTI. She told The Lawyer: “The NDA [Nuclear Decommissioning Authority] is expected to be one of the most significant public sector procurers of services from the private sector over the coming years.”

Slaughters, which has to date been the DTI’s principal adviser on nuclear energy issues, confirmed that it was not invited to participate in the beauty parade. An internal source said: “It’s to our great disappointment that the DTI didn’t want to invite us. The DTI had an issue regarding overdependence. It’s not healthy for them to be overreliant on one firm.”

A spokesperson for the DTI said that Slaughters was excluded from the tender because the firm was already advising the DTI on the high-profile British Energy restructuring. He refused to comment on cost, but admitted that the DTI does have taxpayer considerations.

The firm could be the victim of political circumstance. Last October, Liberal Democrat Shadow Transport Minister Tom Brake called on Railtrack administrator and Ernst & Young partner Alan Bloom to explain why Slaughters was selected as the main adviser on the Railtrack administration, and whether the appointment of the firm represented best value for money. Slaughters was appointed with no evidence of any beauty parade or tendering process. Brake estimated Railtrack advisers were, in total, billing £700,000 a week on the administration.

Under the contract Herbert Smith will advise the DTI on a number of issues, including the contractual framework to be put in place by the NDA, which is a new public body charged with the responsibility for the cleanup programme.