Its partners earn millions of pounds a year advising clients on employment and benefits issues, but Freshfields Bruckhaus Deringer omitted to check that changes to its own pension scheme were legal, it emerged yesterday.
The admission was made by Guy Morton, joint senior partner, during cross-examination in an age-discrimination claim brought by a former employee. Peter Bloxham, Freshfields’ former head of restructuring, claims he was “forced” to retire from the firm aged 54 because the pension reforms made it “economic madness” for him to stay employed.
Freshfields’ website claims that its lawyers have “have particular expertise in all the legal aspects of . . . restructuring pension arrangements”. Despite this, Mr Morton conceded that the firm had not considered the full legal implications of a radical pensions shake-up introduced last year.
Tim Pitt-Payne, QC, for Mr Bloxham, told the employment tribunal how an eminent legal expert, Jonathan Sumption, QC, was hired to help Freshfields’ senior management with the pension reforms. Mr Pitt-Payne proposed to Mr Morton that Mr Sumption was “not asked to advise about age discrimination issues”. Mr Morton replied: “That is correct.”
In cross-examination, Peter Jeffcote, Freshfields’ managing partner, was asked whether the firm was aware “that [new] age discrimination legislation is coming”. Mr Jeffcote replied: “Absolutely.” In its defence, Freshfields told the tribunal that at the time it devised its pension reforms the final details of the new legislation were not yet available. The issue of how the reforms might conflict with the laws was therefore “unclear”, Mr Morton said, creating a substantial “element of uncertainty”.
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Despite this, Mr Bloxham’s camp, headed by Jo Keddie of Dawsons Solicitors, insist that Freshfields “closed its eyes” to age-discrimination laws that were available in draft form when the pension reforms were designed.
In his evidence, Mr Bloxham, who is understood to be demanding £4.5 million compensation, accused his former partners of using the pension reforms as a clandestine means of achieving its aim of forcing out older employees.
Dinah Rose, QC, for Freshfields, accused Mr Bloxham of being “paranoid” for believing what was nothing more than a “conspiracy theory”.
Mr Morton conceded that, although weeding out older partners was not the “motivation” behind the pension changes, senior management acknowledged that it did consider the effects it might have on the “profile of the firm”.
Earlier in the week, Mr Bloxham accused Freshfields of emotional blackmail in trying to persuade him to accept a smaller pension without causing a stir. However, he was forced to concede some ground. In his witness statement, he insisted that Freshfields had not offered him further employment. But once pushed on the issue, he admitted he “may” have been offered a consultant role, as Freshfields maintains.
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The tribunal heard about a phone conversation in which Mr Morton attempted to discuss the pension issue. Mr Bloxham, it is alleged, interrupted Mr Morton, saying: “Oh Guy, I’m sick of your casuistry”, and hung up.