County council faces £20m bill after dispute with highways contractor

Cumbria County Council faces a £20m bill after losing a lengthy legal case against roads maintenance contractor Amey.

Amey had claimed £30m from Cumbria, a sum the council had held back citing poor performance and overcharging. 

In Amey LG Ltd v Cumbria County Council [2016] EWHC 2856 (TCC) HHJ Stephen Davies awarded Amey a net payment from Cumbria of £3,698,064.04, which with interest set at 8% above base rate took the council’s total liability to £5,365,093.34.

The judge subsequently ordered the local authority in Amey LG Ltd v Cumbria County Council [2016] EWHC 2946 (TCC) to pay £4,312,500 on account towards Amey’s costs. This was “arrived at by discounting the total costs of £8.848 million by 15% to reflect the reduction which I have already determined is appropriate, producing a figure of around £7.5 million, and then taking a mid-point between 50% and 65% of £7.5 million”, the judge said.

Cumbria’s own costs were said to amount to £10.037m.

Hearings in the case extended over 42 days and dealt with dozens of technical disputes about the quality of road repairs, with the judge finding mostly in Amey’s favour.

Cumbria said it had already paid Amey £272m for work undertaken during a seven-year contract to maintain some 1,090 kms of roads.

A Cumbria statement said the council held money back from Amey’s final payment “because of what it firmly believed were issues of poor performance and overcharging.

“During the final phase of the contract evidence showed poor performance by Amey and the judgment notes ‘poor workmanship’ on highway patching. This was obviously unacceptable to the council and to the Cumbrian taxpayer.”

It added: “It is important to emphasise that the council tried early on to try and resolve our differences with Amey and to agree a sensible settlement. We tried to address any differences within the proper contract dispute process.

“While some differences were resolved through this process, it was Amey who chose to continue with their claim and as such the council were placed in a position of defending what in our opinion was an unrealistic claim.”

Council lawyers are assessing whether to lodge an appeal.

An Amey spokesperson said: “Amey worked with Cumbria council for almost a decade and we are proud to have served the county for this time delivering high quality highways services.

“In 2013, when the contract concluded there were a few items to be closed out. These are now concluded and we welcome the decision of the court.”

Mark Smulian