Mystery surrounds why lawyers for the provisional liquidators of Bermuda Fire & Marine Insurance Company have given notice that they will quit their legal representation.

Mello, Hollis, Jones & Martin, after less than a year of representing the provisional liquidators for the high-profile case, may not be prepared to publicly discuss the matter, unless they are given specific permission by their client.

Yesterday, after consultation with those close to the case, the accountants involved with the local company, Kempe & Whittle, and those with London's Ernst & Young refused to give such permission.

Yesterday, The Royal Gazette revealed that the lawyers were parting with their accountant-clients, who are in the middle of one of the most controversial provisional liquidations in Bermuda's insurance history.

It means that those involved in the companies affairs have "lame duck'' legal representation until they appoint new lawyers.

Provisional liquidator Mr. Anthony Joaquin conceded that it was a transitional stage, with discussions underway to replace the lawyers with another firm.

That transitional stage will have existed for at least three weeks now, since Mello, Hollis, Jones and Martin wrote to the liquidators, advising them of their intention to withdraw the services of lawyers Mr. Saul Froomkin and Mr.

Andrew Martin.

But the provisional liquidators now face the need to return to the Supreme Court in Bermuda and to a judge in London to get clarifications and court directions on their next move. For that, they need a lawyer.

They still have legal representation in London, and they now believe they are close to retaining a law firm, here.

The Bermuda Fire & Marine case is still being discussed on both sides of the Atlantic after the company filed for a winding-up petition with an initial estimate exceeding $100 million in liabilities, a year ago last week.

Just last month a US Congressional Energy and Commerce sub-committee on Oversight and Investigations, chaired by Rep. John Dingell, claimed that "The Bermuda Fire & Marine episode is a prime example of outrageous irresponsibility by an offshore insurance company...'' It was the latest piece of bad press over the company that the Government and the insurance industry want to just go away.

The firm is alleged to have simply stripped the assets and the profitable domestic element from the original company back in 1991 and transferred them to the new firm, BF&M.

A court is still to determine the legality of the move.