Freshfields is facing a whopping £142 million negligence claim from London Underground after a deal with Metronet ended badly.
Back in the mists of 2002, Freshfields was instructed to advise on a public private partnership with the now-defunct transport company Metronet by London Underground Limited (known by its txt-speak acronym LUL). Several companies were created to facilitate the deal, which involved the renovation of seven underground stations. LUL is now claiming that the contracts were drafted negligently by the Magic Circle firm, putting LUL on the hook if those companies went bust, according to a Lawyer report.
Before the fallout, Freshfields' relationship with LUL was pretty lucrative, netting the firm the thick end of £30 million between 1998 and 2002. But relations soured quickly when Metronet went into administration in 2007 and LUL was obliged under the contracts to fund their debts to the tune of £178.5 milion.
Freshfields has come out fighting, with a spokesman confirming: "We reject the claim and will be defending it vigorously". But it seems LUL is on fighting form too and top legal brass have been recruited by both sides. Mayer Brown has been instructed to defend Freshfields, assisted by stellar QC Laurence Rabinowitz. And fighting LUL's corner are Ince & Co and George Leggatt QC. So whichever side emerges victorious, the case is certainly going to be eye-wateringly expensive.
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Back in the mists of 2002, Freshfields was instructed to advise on a public private partnership with the now-defunct transport company Metronet by London Underground Limited (known by its txt-speak acronym LUL). Several companies were created to facilitate the deal, which involved the renovation of seven underground stations. LUL is now claiming that the contracts were drafted negligently by the Magic Circle firm, putting LUL on the hook if those companies went bust, according to a Lawyer report.
Before the fallout, Freshfields' relationship with LUL was pretty lucrative, netting the firm the thick end of £30 million between 1998 and 2002. But relations soured quickly when Metronet went into administration in 2007 and LUL was obliged under the contracts to fund their debts to the tune of £178.5 milion.
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London Underground yesterday (artist's impression) |
Freshfields has come out fighting, with a spokesman confirming: "We reject the claim and will be defending it vigorously". But it seems LUL is on fighting form too and top legal brass have been recruited by both sides. Mayer Brown has been instructed to defend Freshfields, assisted by stellar QC Laurence Rabinowitz. And fighting LUL's corner are Ince & Co and George Leggatt QC. So whichever side emerges victorious, the case is certainly going to be eye-wateringly expensive.