House of Representatives Committees

Standing Committee on Economics, Finance and Public Administration

Review of the Australian Competition and Consumer Commission annual report 1996-97

Press release, 16 January 1998

AGS BACKS DOWN ON PAYMENT OF LAWYERS IN FOXTEL/AUSTRALIS MEDIA CASE

Responding to pressure from the House of Representatives Financial Institutions Committee the Australian Government Solicitor (AGS) has backed down on accepting a commercial subsidy for legal assistance it provided for the ACCC. Last year in hearings before this Committee it was revealed that not only had the AGS accepted a subsidy from Optus for the legal assistance, but it had also charged a premium when billing the ACCC (Australian Competition and Consumer Commission).

Now the ACCC has advised that "The Australian Government Solicitor (AGS) has...agreed with Gilbert & Tobin to pay full AGS charge-out rates to them in respect of their solicitors engagement and that, in return, Gilbert & Tobin will not seek any 'top-up' from Optus."

According to David Hawker MP, the Chairman of the House of Representatives Financial Institutions and Public Administration Committee, "this belated change of heart goes part of the way to redress his Committee's concerns with the ACCC's use of lawyers in the Foxtel/Australis Media merger case."

This information was revealed in an ACCC response to questions on notice and additional questions to the Senate Legislation Economics Committee - Estimates in late December.

Mr Hawker said "evidence provided to the Financial Institutions Committee last year by the ACCC and the AGS revealed that, the AGS had supplemented its legal resources on the Foxtel/Australis Media case with two solicitors with telecommunications skills through a secondment with Gilbert & Tobin solicitors, a firm which normally acted for Optus. The seconded solicitors would be paid by the AGS at AGS salary rates with their salaries topped up by Optus to their current salaries. The ACCC was charged extra on top of the Optus support."

"The basis of the Committee's concern was the principle that, while the ACCC will inevitably stress that it 'take sides' in mergers that it believes are not in the 'public interest', the ACCC has an obligation to be independent of commercial interests in its operations, which impact substantially on commercial enterprises in almost every sector" Mr Hawker said.

"During the Committee's hearings it also emerged that while AGS would pay Gilbert & Tobin for the two solicitors at AGS salary rates of the order of $379 per day for one solicitor and $291 per day for the other, the AGS was charging the ACCC at rates of the order of $250 per hour (closer to commercial solicitor rates) - more than the top up from Optus plus the AGS rate."

"I am pleased that the AGS has now sought to put this matter right" Mr Hawker said.

"It is indisputable that the ACCC must be independent, accountable and transparent, and be seen to be independent, accountable and transparent. The top-up arrangements for the seconded lawyers brought the ACCC's independence into serious question" Mr Hawker concluded.

Mr Hawker also noted that the Committee is currently preparing its report on the review of the ACCC's 1996-97 annual report which will address this, and other matters. He said the Committee expects to table its report when the Parliament resumes in March.

Ends // 16 January 1997 // Email: EFPA.Reps@aph.gov.au
Further information:
David Hawker MP (Chairman) (03) 5572 1100 (Electorate)
Bev Forbes (Inquiry Secretary) (02) 6277 4587
Details of Committee membership attached

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