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Lawsuit blow for BAE's Evans

Mail on Sunday
2 March 2003, 12:00am

SIR Richard Evans, chairman of BAE Systems, is this weekend facing a new threat to his leadership of the troubled defence group.

He is named in a £450,000 legal action against BAE that alleges a breach of the terms of a gagging order designed to prevent details of a controversial industrial tribunal coming to light.

Evans, 61, who has been running the group for 13 years, is already under pressure from shareholders unhappy at the group's financial performance and of claims that arrogance in his dealings with the Government has cost BAE potential business from the Ministry of Defence.

The company, which earlier this month unveiled a £616 million loss, the worst since the early Nineties, is also facing strike action by staff who are angry at plans forcing them to increase contributions because of a £2.16 billion hole in the group pension fund.

Evans has said he will leave BAE in June next year, and aides say he is under no pressure from investors to go earlier. But the case of former secretary Christine Pratt, investigated by Financial Mail, could add to doubts about his already shaky boardroom position by casting doubt on his stewardship over all aspects of the company.

Pratt, 47, was a senior secretary at BAE who worked in the corporate exhibitions department alongside a number of senior BAE executives, including Evans, at the corporate air shows where big business deals are shaped.

She left dramatically in April, 1995 and took BAE to an industrial tribunal claiming constructive dismissal.

But before the tribunal could rule on the case, she and BAE reached an out of court settlement, including a cash payment and an agreement that the company would provide positive references to prospective employers.

Crucially, the settlement also contained an agreement that neither party would discuss details of the case. Pratt now argues the terms of that agreement have been broken by BAE and that Evans knew about and condoned the workplace difficulties she had suffered that prompted her tribunal action.

Financial Mail has established that these problems centred on allegations of bullying.

Pratt refused to discuss the affair when contacted at her Swindon home. 'Unfortunately, at this point in time, I am unable to discuss the full circumstances of the original tribunal, other than to say I have documentary evidence that strongly suggests British Aerospace has been negligent,' she said.

But Pratt did confirm she is now suing BAE for £450,000 damages in lost earnings, claiming the firm breached confidentiality by passing details of the tribunal to a prospective employer.

She says she applied for a job - subject to references. But when BAE responded to the request for information, her prospective employer was told details of the tribunal, in breach of the agreement.

She has not been employed since. She now runs a company which gives advice about how to deal with bullying in the workplace.

A spokesman for BAE declined to comment on the case while legal action remained unresolved.

But the claims that Evans did not ensure that his organisation implemented confidentiality agreements and that bullying took place are a further blow to his leadership.

After announcing the recent disastrous figures, Evans said: 'I have never contemplated resigning. The object of the exercise when a fire is burning is to put that fire out.'

But City critics warn that Evans - like Graham Wallace at Cable & Wireless and Lord Marshall at British Airways - faces the prospect of retiring with his reputation tarnished after a long and highly regarded career at the top of British industry.

No one doubts his commitment to the company. He was regarded as a brilliant salesman and his coup in selling Tornado bombers to Saudi Arabia - the famous Al Yammamah deal where his ability to swallow sheep's eyes impressed Saudi leaders - saved the business when BAE was under huge financial pressure because of the downturn in the civilian aircraft market.

But the past two years have been cruel to Evans, whose reputation in Whitehall has nose-dived.

His perceived arrogance in his dealings with the MoD not only infuriated senior Government officials but damaged the company's fortunes. Last month an order for two giant aircraft carriers that BAE had hoped to carry off ended up being split with rival French group Thales.

Delays and cost over-runs on £5 billion of contracts for Astute nuclear powered submarines and Nimrod spy planes resulted in BAE having to take a £750 million hit.

Faced with such a catalogue of problems, most men of his age would be only too happy to quit. But not Evans.

One key fund manager said: 'The grumbles will go on. The calls for change have been silenced only for the moment. Still, Evans has got to prove he can manage the programmes on time and on budget.'

By Evans's reckoning, he has only 15 months to prove his critics wrong.