Standing Committee on Economics, Finance and Public
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
"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
David Hawker MP (Chairman) (03) 5572 1100 (Electorate)
Bev Forbes (Inquiry Secretary) (02) 6277 4587
Details of Committee membership attached
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