Mossack Fonseca has heightened scrutiny of the role of law firms as professional enablers of corruption, and tax evasion. The collapse of British Homes Stores is throwing up some interesting questions about law firms. Olswangs and Linklaters have been criticised before a Parliamentary Select Committee, and today’s FT contains an even more interesting point without naming a specific firm (£). The allegation is that a ‘worthless’ guarantee was given to reduce BHS’s pension protection levy. The advisers involved are not named but the Chief Executive of the Pension Protection Fund, Mr Alan Rubenstein, is quoted as saying this:
In his evidence to the select committees, Mr Rubenstein said “abuse” of the use of guarantees by companies was “widespread” and that there were “a number of advisers out there, respected firms, who were advising their clients on ways to reduce their PPF levy”
What is not clear from the story is whether he is saying the abuse and the advice on reduction are always, normally or merely sometimes one and the same, but the reputational costs of lawyers saying, I merely advise [on the loophole I discovered] and my client decides whether to exploit it, appear to be growing.