London Underground is suing lawyer for alleged negligence over PPP contract

London Underground is suing lawyer Freshfields Bruckhaus Deringer for 拢141.96m for alleged negligence over the public private partnership (PPP) contract to upgrade the tube.

The High Court claim relates specifically to London Underground鈥檚 contract with PPP company Metronet, which was set up in 2003 to oversee the 拢8.7bn upgrade of seven lines.

London Underground claims that when Metronet fell into administration in 2007, 拢178.5m of the 拢1.74bn it was forced to pay out went to compensate investors backing the project for costs they never actually incurred. LU claims this was due to a negligently worded contract approved by Freshfields.

London Underground claims options in the original agreement meant it 鈥渃ould be required鈥� to pay the 拢178.5m to cover break clauses in the bonds raised to finance the PPP when Metronet went bust, despite the PPP鈥檚 financers never incurring the break costs. It has since recovered 拢36.5m of the costs directly from the funders, leaving it out of pocket for拢141.96m.

Freshfields denies the claim and says the contract was worded correctly. It argues London Underground was not obliged to make the extra 拢178.5m payment.

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