Lawyers on NAMA's legal panel must reveal all property interests
LAWYERS selected to provide legal advice to the National Assets Management Agency (NAMA) will have to disclose the full extent of their property loans before they are hired by the State's 'bad bank'.
The tougher screening measures will be introduced after several partners in two leading law firms selected for NAMA's legal panel were sued by banks over soured property debts.
Earlier this week it was revealed a high-flying solicitor who is being sued for €70m by Bank of Ireland (BoI) has property debts of some €800m.
Brian O'Donnell, a former managing partner of commercial law firm William Fry, is a principal in Brian O'Donnell and Partners, one of 64 firms appointed by NAMA to its panel of potential legal advisers.
NAMA, which will pay more than €260m a year to professionals, mostly lawyers, over the course of its 10-year lifetime, will now insist on details of potential exposure by solicitors and barristers amid concerns that some of their loans may be transferred to the agency.
A spokesperson last night said that, in addition to declaring general conflicts and providing tax clearance certificates, professionals engaged by NAMA will be asked whether they have any conflicts, at a personal and firm level, including exposure to soured property deals.
"The competitive tender for NAMA's [legal] panel stressed the avoidance of any conflicts of interest," the spokesperson told the Irish Independent.
The spokesperson added that just because a firm had made it on to the panel did not guarantee that they would provide legal services for or on behalf of NAMA.
At present, law firms selected as potential advisers are required to declare in advance the banks and developers and other borrowers for whom they have carried out work in the past.
Mr O'Donnell is not the first solicitor whose firm was selected by NAMA to be sued over soured property loans.
Last year, the Limerick law firm Dermot G O'Donovan Solicitors resigned from the NAMA legal panel after a builder owed €1m by a Limerick construction firm alleged the firm was conflicted.
Four partners in the firm later consented to judgment orders of €86.5m after they were sued by Anglo Irish Bank.
The four partners had a 12.5pc stake in the Fordmount Property Group which constructed more than €300m worth of property in Limerick.
Although selected for NAMA's panel, Brian O'Donnell and Partners has not received any work to date from the agency.
Fine Gael senator and senior counsel Eugene Regan said NAMA must ask, as part of its vetting process, whether any potential advisers had impaired or property related debts which could create a conflict of interest.
"Questions must be asked," Mr Regan said. "How is NAMA vetting its advisers? Nama is quick to blame banks and developers, but it must lay down strict criteria for vetting firms which are or could become conflicted."
Mr O'Donnell invested in a series of property deals including the acquisition of landmark assets in London, Washington DC and also in Stockholm.
He and his wife Mary Pat, a doctor, who were ranked on the 'Sunday Times' rich list, have claimed that the timing of BoI's litigation is not linked to any deterioration in their financial position or that of their companies.
They claim the lawsuit represents the "final push" in a "campaign" by the bank to force the couple to sell the Sanctuary, one of London's landmark buildings close to the Houses of Parliament which is home to Britain's department of education.
It has emerged the building at the centre of the case, Sanctuary Buildings in Westminster, London, is raking in €8.7m a year in rent from the British government for Mr O'Donnell's company.
NAMA has drawn up a large panel of legal firms, in part to manage and avoid conflicts of interests by lawyers, many of whom provided legal advice during the boom and also in the aftermath of the property crash.