Lee Valley Leisure Trust has dropped its legal action in a bitter dispute with the Lee Valley Regional Park Authority after entering administration last month.
The trust maintains it was driven into administration by the authority not awarding it a contract and then failing to agree a management fee for its remaining work within a reasonable time, but the authority denies both claims.
Joseph Barrett of 11KBW acted for the authority in “successfully defending a substantial claim under the Public Contracts Regulations 2015” brought by the trust in which it challenged the award of a new long-term contract for the management and operation of the authority’s leisure facilities in and around the London Olympic Park.
The trust had previously managed these but the work went to a rival bid from Greenwich Leisure.
11KBW reported that a trial of liability was to be heard this month but the new contract would now be implemented after the trust dropped its action.
The trust was set up originally by the authority to manage its leisure venues in an arm’s-length arrangement to avoid business rates, but relations between the two bodies have deteriorated.
Trust chair Richard Sumray told Local Government Lawyer: “The Lee Valley Park Authority failed to provide us with information on why we had been unsuccessful in the procurement, which was needed to challenge it.
“It then took all the other services we provided back in-house so left us with no business.”
Mr Sumray claimed that despite the arm’s-length arrangement originally agreed “the authority never really dealt with us as an independent body”.
He said that only after delays did the authority made an offer over the management fee - which had been £2.3m last year - “but we had no business left and entered administration with [accountant] Beever and Struthers [who] could pursue the park authority for the management fee”.
Mr Sumray added: “In my view the authority did not operate in a way that was fit for purpose as a public body.”
The authority said in a statement: “Following an open and transparent procurement process, Lee Valley Leisure Trust was unsuccessful in securing the contract for our six main sporting venues for a 10 year term. Another bidder was awarded the contract.
“The selection process was robust and the authority engaged the market in a fully compliant OJEU process under the Procurement Contract Regulations, backed up and quality assured by auditors at every stage, and by leisure procurement specialists who assisted the authority throughout. We are confident that we followed best practice and complied fully with the procurement process at every step.”
The trust’s pursuit of the management fee had been for a sum higher than was “largely agreed for the last year of the contract”, the authority said.
It said attempts to settle this using the contract’s dispute resolution mechanism had been declined by the trust and an attempt at mediation failed in June.
The authority said: “We have not withheld any pertinent information during this process and it is wrong to suggest that we deliberately protracted negotiations which was in no-one’s interest.
“We would much prefer to spend our time and public money on our world class venues, open spaces and the communities we serve instead of unnecessary legal disputes.”
It added that it “treated the trust as an independent body throughout”.