Good advice doesn't come cheap

This is an extraordinary case. The story goes a bit like this. Imagine you (you're called Celtic) own some mines in Wales. Once you have finished with the mines, you are under an obligation to put the sites back into a good condition because that's one of the obligations of owing a mine. That's going to cost hundreds of millions of pounds you don't have. You are going bust. So you go to some solicitors. They come up with the idea of selling the mines to some British Virgin Islands companies with no assets (that you and your solicitors can set up), but allowing Celtic to carry on working the mines. The BVI companies (called Oak) would have to pay the remedial costs in theory - but who could enforce that in practice? Anyway, you wouldn't have to pay the costs and so you become very rich.

Sounds like a cracking idea, doesn't it? But, you worry, isn't it a bit, you know, illegal? Well, let's ask a QC for advice. "So, Stephen Davies QC was asked to advise on the scheme. He provided two written advices. The first, dated 24 June 2010, concluded that, whilst the freehold titles in the sites could be transferred to Oak, apart from the restoration requirements under the Town and Country Planning Act 1990, Celtic would remain liable under the leases to fulfil all of its covenants including those relating to restoration of the sites. He therefore advised that the underlying objective of the scheme was unachievable." Oh no! It's a cunning plan but it's not going to work.

Hang on a minute. Did you say two written advices? Tell me about the other one. "However, Mr Davies was asked almost immediately to reconsider the issue and in his second opinion of 30 August 2010, in which he did not refer to his earlier advice, he concluded that, following the transfer of the freeholds to Oak, Celtic would not be left with any substantial restoration obligations. His fee for that second advice was £250,000."

While we're on the subject of money, "There was evidence that [the directors of Celtic] were rewarded by covert seven-figure payments for the introduction of Oak to Celtic, through another company that they wholly owned; and [the solicitors] were also rewarded by somewhat smaller – but nevertheless substantial, six-figure – payments through subsidiaries of Oak."

If you've jumped to any conclusions at this stage then you might well have jumped to the wrong ones. The link above takes you to the judgment in which the Serious Fraud Office was criticised for how it brought a case against the directors, solicitors and barrister involved, and was ordered to pay their legal costs. As a little bit of a spoiler alert, you might want to know that that second advice was right. Sometimes at least, you get what you pay for.