Legal firm A&L Goodbody has lost two big advisory contracts over a “conflict of interest” connected with the lottery licence competition.
The firm had been advising the winning bidding consortium involving UK operator Camelot and An Post on the licence auction before the relationship ended three weeks ago.
It subsequently emerged that A&L Goodbody had simultaneously been advising charity group Rehab on a possible legal challenge to the National Lottery, which may have serious consequences for the next operator.
It is understood that the firm provided legal advice to both parties for more than a year. A&L Goodbody declined to comment on the matter, despite a number of requests from The Irish Times.
“A&L does not comment on client matters,” a spokesman said.
Rehab was informed by A&L Goodbody two weeks ago that it could no longer be its legal adviser due to a conflict of interest. The nature of the conflict was not specified in the disclosure. Rehab said it had been unaware of the legal firm’s role in advising one of the bidders for the lottery licence.
The group, which operates its own charity lottery, is suing the State for damages arising from the National Lottery's dominant market position, on the grounds that it contravenes European competition law.
Rehab said yesterday it was considering its options in relation to A&L Goodbody’s disclosure.
“We’re gravely concerned. This is a very serious matter and we’re examining all of our options,” a spokesman said.
He said the legal firm never informed Rehab of the exact nature of the conflict of interest when it stepped down as its adviser.
Minister for Public Expenditure and Reform Brendan Howlin last week announced Premier Lotteries Ireland, which involves An Post and Camelot, as the preferred bidder for the lottery licence following a €405 million bid for the franchise.
The bid was bankrolled by Camelot's Canadian parent company, Ontario Teachers' Pension Plan (OTPP), which had employed A&L Goodbody as its legal adviser to the process last year. An OTPP spokesman also said it did not comment on its "adviser relationships".
According to documents initially lodged with the Companies Office, the registered address of Premier Lotteries Ireland was the same as A&L Goodbody’s Dublin head office, and two of the company’s nominee directors were partners in the legal firm.
Last week, Rehab initiated legal action against the Minister for Justice, the Attorney General and An Post for damages arising from the National Lottery’s dominant market position.
While its lawyers have not yet lodged a statement of claim, the group is said to be seeking compensation of up to €1.5 billion for past and future losses it claims to have suffered on account of a cap on the prize payouts of private lotteries which it says distorts the market in favour of the National Lottery.
Rehab is also involved in a separate High Court challenge to Minister for Justice Alan Shatter's decision to phase out funding for charity lotteries under the Charitable Lotteries Fund, which is due to be ruled on later this month.
The Department of Public Expenditure and Reform confirmed yesterday A&L Goodbody had not advised it at any stage during lottery licence process.
"During the competitive process, Davy Corporate Finance provided the department with financial and commercial advice while legal advice to the department was provided by the Office of the Attorney General," a spokeswoman said.
“A&L Goodbody had no role in relation to advising the Department or Davy Corporate Finance in relation to the competition for the licence,”she added.
