High Court to hear dispute between leisure trust and regional park authority over management fee

The High Court is due tomorrow (19 March) to hear an action brought by Lee Valley Leisure Trust as part of a bitter dispute with the Lee Valley Regional Park Authority.

Although the trust was set up originally by the authority to manage its leisure venues in an arm’s-length arrangement to avoid business rates, relations between the two bodies have deteriorated.

Thursday’s court action concerns a claim by the trust that the authority has failed to pay it a management fee of £1.85m due for two quarters of last year.

The trust has said its viability would be threatened if it does not receive the money and that the authority has breached a contract by failing to pay it.

Article continues below...

It has said that under the contract between the authority and the trust the former is bound to pay the management fee, which is used to pay staff and buy goods and services. 

A separate unresolved dispute between the two bodies concerns the authority’s decision last year to remove the contract to run some leisure facilities from the trust and award this instead to Greenwich Leisure.

It has also decided to take other leisure facilities outside this contract back in house away from the trust.

The trust has claimed that the award to Greenwich Leisure breached procurement rules and that its bid will be more costly than that of the trust.

Authority chief executive Shaun Dawson said in a statement to Local Government Lawyer: ‘‘Lee Valley Regional Park Authority has been in dispute with the Trust regarding the total management fee sum for 2019-20 since November 2019.

“The two quarters management fee owed to the trust relate to the services provided under the contract up until Tuesday 31 March 2020, when it is due to end.

“The authority offered the trust the opportunity to enter into the contractual dispute resolution process in November and again in December 2019, where an independent arbiter would assess the dispute and then make a ruling that both parties would be obliged to abide by. This process would have taken two weeks to conclude. The trust unfortunately refused this opportunity on both occasions.”

Mr Dawson said the authority had a responsibility to spend public funds spent wisely, and that since the trust had claimed “a much higher management fee sum for 2019-20 than originally anticipated, it has been left with no option but to hold back on paying the other two quarters”.

He said the trust had been paid sufficient to cover contractual obligations up to the end of its current contract on 31 March.

The park runs 26 miles along the River Lee from the Thames to Ware, Hertfordshire.

It is overseen by the authority which has a board of councillors drawn from the immediate ‘riparian’ authorities and from a wider area as all London boroughs pay a levy towards the park.

Mark Smulian

(c) HB Editorial Services Ltd 2009-2020