Featured image credit: Rob Ridley
The law firm that helped draft London Stadium’s 99-year lease deal with Premier League football club West Ham United appears to have paid a seven-figure out-of-court settlement to E20 Stadium LLP, the company which operates the venue.
The development has been disclosed through the filing of E20 Stadium’s annual financial report at Companies House. The situation dates back to 2020, when it was initially reported that London Stadium’s owners and operators, London Legacy Development Corporation (LLDC) and E20 Stadium, had launched a legal battle against Allen & Overy.
It was reported that LLDC and its subsidiary, E20, had brought a professional negligence suit against Allen & Overy for its work on the controversial 2013 deal. LLDC and E20 were said to have claimed 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, which has been described as the “deal of the century” in view of its favourable terms for the club.
The Times said E20 sued Allen & Overy for £12m (€13.9m/$15.3m) owing to alleged negligence. The legal proceedings commenced during 2022-23, but the dispute was ultimately settled in August 2022 before a court hearing scheduled for October of the same year.
The law firm denied any negligence, and while the settlement was confidential E20’s latest set of accounts, for the year ending March 31, 2023, indicate that it could be worth as much as £2m. The E20 report stated: “The details of the settlement are confidential; however, the related transactions are recognised in the 2022-23 financial statements (within exceptional income).”
E20’s accounts detail that it received £8.563m as ‘exceptional income’ in 2022-23, compared to zero for the prior year. Of that, The Times said £6.5m came from West Ham as part of a penalty clause in the concession agreement which had to be paid when Czech billionaire businessman Daniel Kretinsky acquired a 27% stake in the club in November 2021.
The remaining £2m appears to be income from the out-of-court settlement with Allen & Overy as the accounts do not reference to any other ‘exceptional income’. West Ham is also contesting £3.95m of the £6.5m it paid in March last year under the stadium lease penalty clause.
However, the report does note that the underlying operating position of London Stadium by combining the financial information of E20 Stadium LLP, London Stadium 185 Ltd and E20 Stadium LLP Group is a profit of £27.6m for the year ending March 31, 2023. This compares to a loss of £13.7m for the prior year.
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