Diana fund satisfied with lawyers' fees

Trustees of the Diana Memorial Fund denied they were sacking their lawyers over a pounds 500,000 bill. But one MP described the charge as `extravagant'. Michael Streeter, Legal Affairs Correspondent, looks at an embarrassing row over the fund.

The trustees and the lawyers, Mishcon de Reya, were upset yesterday over reports of a fall-out over the legal bill. In a statement the Board of Trustees of the pounds 37.5m fund said the fees, incurred over three months, were "if anything, on the low side". And Anthony Julius, chairman of the board of trustees , a partner of the firm and friend of the Princess, was said to be "deeply upset" at the publicity surrounding him and the firm's bill.

An inquiry was launched to find the "source" who told the Mirror of the firm's confidential billing arrangements and who claimed the trustees were considering changing their lawyers because of the cost.

The Independent understands the person has already been identified and "will be asked to account for their actions". It emerged that the Charity Commission told the trustees of the Diana, Princess of Wales Memorial Fund at its creation that there was potential conflict of interest in having as chairman of trustees a lawyer, Mr Julius, whose firm was also acting as their lawyers.

A commission spokeswoman said it was a matter of "bringing it to their attention" and they received a reply saying the fund was being charged by the lawyers on a non-profit making basis.

In its statement the board, which will announce the first beneficiaries of the fund in March, said it considered Mishcon's fees to be "reasonable and appropriate for the work undertaken". None of the legal costs would be made from donations by members of the public but come from the commercial side of the fund, such as establishing copyright for the multi-million- selling Diana tribute album .

Trustee Vivienne Parry said: "The financial benefits from the commercial projects being established by Mishcon de Reya will massively outweigh the costs of setting them up ... This is an absolute storm in a tea-cup."

John Jackson, non-solicitor chairman of Mishcon de Reya, said it had discounted its fees by 20 per cent as a contribution towards good works the fund was hoping to carry out. The firm says much of the money has gone on fixed costs.

Labour MP Robin Corbett described the charges as extravagant; people who had contributed to the fund would be "upset and displeased".