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Airport legal bills total $4.1 million

Negotiations entailed in the airport redevelopment ran up a tab of $4.1 million to the Government’s law firm, Bennett Jones.

But Bob Richards, the Minister of Finance, said the bill would have been higher if a request for proposal had been issued for the deal.

“It’s a big bill,” Mr Richards conceded after written answers were given to parliamentary questions from Opposition leader David Burt.

“It’s spread over three years and I daresay it’s a one-off.”

The fees were paid between January 1, 2014 and January 31 this year, totalling $4,144,333 — an aggregate sum paid to Bennett Jones LLP in Canada and the company’s Bermuda branch.

“There is nobody in the Government or the Bermuda legal fraternity with this expertise and experience — they have a lot of experience with P3 type transactions,” the minister said, referring to the public-private partnership underpinning the project with Canadian Commercial Corporation and Aecon. “They had their office here as well as the connection with Canada, but most importantly they have deep experience with these types of deals.” He added: “It’s a complex project. A lot of people think we went in there and just shook hands but there was a lot of negotiations and a lot of it was in legalese, so we had to have lawyers acting on our behalf.”

Mr Richards has said in the past that the Government proceeded with its initial deal with CCC on the assumption, backed by Bennett Jones, that no permission was required from the British Government.

The deal was approved by Cabinet in July 2014, announced that November, and a letter of entrustment received in July 2015.

Asked about the legal bill, Mr Richards said there had been “a great deal of difficulty with the UK over the entrustment documents”.

“There was a long period of negotiation with the UK Government, and it required a lot of legal opinion and help with negotiations, which of course nobody figured we would have to do.

“This was not part of what we expected. It hung us up for almost a year, and during that time we had to use the expertise that Bennett Jones had to move the ball farther, so we got nailed with more legal expenses than expected.”

He added: “I think we still saved money than if we had gone by the RFP route.

“We would have had all the lawyers for that, plus public consultants.”

The written response provided to this newspaper in Parliament included details on the company’s rates.

Bennett Jones’s fees were discounted by 20 per cent when originally proposed as part of the firm’s public sector discount.

Effective February 1, 2015, the firm voluntarily cut their rates a further 10 per cent after the Government called for “increased financial austerity”, the reply said.

Monthly accounts are accompanied by a “very detailed” docket describing the firm’s services in such detail that they are “highly confidential”, and the firm vets its accounts for “errors and inefficient time”.

The ministry’s response added that the legal fees are assessed each month by the general manager at the Department of Airport Operations, as well as the permanent secretary for the Ministry of Tourism, Transport and Municipalities, before being paid.