London Stadium’s owners and operators, London Legacy Development Corporation (LLDC) and E20 Stadium, have launched a legal battle against the law firm that helped draft the venue’s 99-year lease deal with Premier League football club West Ham United.
The Financial News said LLDC and its subsidiary E20 have brought a professional negligence suit against Allen & Overy for its work on the controversial 2013 deal, which has since led to a number of expensive lawsuits.
The newspaper, citing a person with knowledge of the situation, said LLDC and E20 are set to claim that the law firm’s poor drafting of the agreement contributed to their difficult relationship with West Ham and a number of legal disputes concerning the interpretation of the agreement.
Allen & Overy acted for E20 on the drafting of the 2013 concession agreement that governs West Ham’s lease of the former Olympic Stadium. An LLDC spokesperson said: “We are in dispute with A&O over the drafting of the West Ham United concession agreement and despite our attempts to resolve this dispute with A&O have been unable to do so.
“We have a responsibility to protect taxpayers’ interests and so have had no alternative but to seek redress through the courts.”
In December 2017, a damning report into the mismanagement of London Stadium was published by Mayor of London Sadiq Khan. The report detailed what the London Assembly described as a “catalogue of errors” involving the transformation of the venue from an athletics facility into the home of West Ham.
In the report, Khan’s predecessor, now Prime Minister Boris Johnson, was heavily criticised for the role he played in the transformation process. The report found that the taxpayer had been left to foot an annual loss of around £20m (€21.9m/$25.8m) due to the mistakes made by the previous regime.
The report, which was damning in its criticism of Johnson, said that the decisions to transform the stadium and accept the terms of West Ham’s second bid of anchor tenants were made based on “incorrect financial estimates” and a “failure to fully understand or investigate the commercial risks to the taxpayer.”
In January this year it was revealed that E20’s losses had risen by more than £4m to £27.082m. E20’s financial status was detailed after it submitted its financial report for the full year ending March 31, 2019, to Companies House. While E20’s group loss for 2019 stood at £28.273m, the entity loss of £27.082m compared to 2018’s loss of £22.755m.
Responding to the lawsuit from LLDC and E20, a spokesperson for A&O said: “This claim is entirely without merit and we will defend it vigorously.”
Image: London Stadium
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