Carillion Advice Services is a separate legal entity to collapsed construction giant Carillion and staff are continuing to work as normal, its director has told the Gazette. The future of CAS, which was set up in 2011 to support Carillion's in-house legal team, was unclear at the start of the week after the construction giant declared insolvency.
In a statement, Lucy Nixon, director of CAS Ltd, said: 'CAS Ltd is a separate legal entity to Carillion plc. CAS Ltd is not in liquidation and continues to trade. The team is working as normal, supporting client firms to take control of their in-house legal spending, and using unbundling and outsourcing of legal processes to free qualified lawyers to focus on higher-value-adding work, and continuing to deliver a high-quality service to our clients.'
CAS, which employs 60 paralegals in Newcastle and 10 in Birmingham, was seeking an alternative business structure licence. Nixon said CAS Ltd does not require an ABS licence 'to continue to deliver its current menu of services'. The planned licence, she added, 'is to facilitate the delivery of new services - something CAS remains committed to doing in the future'.
Meanwhile Richard Heaton, permanent secretary at the Ministry of Justice, told the Commons public accounts committee yesterday that Carillion's contracts with the department extend to a legal aid helpline.
Heaton confirmed that Carillion provides facilities management services to half of the public prisons in England and Wales under a contract negotiated in 2014. Carillion provides facilities management services to a 'small number' of courts as part of a joint-venture private finance initiative. There is also a 'very small exposure' through a legal aid helpline where Carillion 'are a very small bit at present', Heaton said.
The Ministry of Justice told the Gazette it could not confirm which helpline Carillion has a contract for. However, business is continuing as usual, a spokesperson said.
Carillion's website states that the Official Receiver has been appointed liquidator of Carillion Plc and 'certain other companies in the group'.
The permanent secretary stressed that business continuity and service provision are the ministry's 'absolute priority'. When asked about Carillion's profit warning in July last year, Heaton said the ministry was 'taking steps to manage' service delivery problems. The ministry was also doing 'some very careful contingency planning for precisely this scenario'.
Heaton was reluctant 'to give a headline to a particular outcome' following Carillion's collapse 'because that hasn't been negotiated with the [trade] unions and it may not be the one the Official Receiver blesses'. However, the ministry has a 'fairly clear solution in mind'.
Heaton acknowledged that the degree to which a prison is maintained and cleaned is a 'causative factor' in prison unrest. However, he said the risk of riots and serious disorder has not increased. He assured MPs that courts under the joint-venture private finance initiative will have 'complete continuity'.
'First generation' outsourcing is always the most difficult, Heaton said, 'especially if you outsource something as complicated as facilities management across a widespread historical estate. If we chose to do it again, the next one might be easier because it would be a second generation. But we haven't had those discussions'.