NHS trust and developer settle multi-million pound dispute over construction of hospital

Northumbria Healthcare NHS Foundation Trust and developer Lendlease have reached a settlement of litigation which was due to be heard in court, the trust has said in a statement.

It said the terms remained confidential but the settlement allowed the trust “to ensure the continued ongoing safety for patients, staff and visitors of Northumbria Specialist Emergency Care Hospital”.

The case concerned a £140m claim issued by the trust against Lendlease related to a private finance initiative agreement between it and Lendlease Construction (Europe) to design and build a specialist emergency care hospital.

This was completed in 2015 but the trust issued proceedings against Lendlease in 2019, alleging substantial design and construction defects and making the £140m damages claim. 

Lendlease joined various sub-contractors into the proceedings. These were: Balfour Beatty, MPB Structures, Keppie Design, Briggs Amasco, Iko UK and Horbury Group.

An earlier ruling in there case had heard that £73m of the claim related to a temporary four-storey building constructed to allow the hospital to operate whilst remedial works are undertaken.

This led eventually to hearings in October at which Lendlease sought disclosure of documents relating to discussions about this building while the trust argued it was entitled to withhold these on the grounds of litigation privilege.

Commenting on the case in Local Government Lawyer in October, Judith Hopper and Alexandra Phillips of law firm Bevan Brittan said the need for remedial works before any claim has been settled can create challenges with the dissemination of information, and how to maintain privilege. 

Mark Smulian