Client on troubled scheme to set aside £500,000 to fund claim against consultant

Colchester council is set to take legal action against Turner & Townsend over its role on the troubled £25m Rafael Viñoly designed Colchester Arts Centre.

The council was due to approve plans on Wednesday to set aside £500,000 to cover the legal costs of a claim against the consultant.

T&T was QS and project manager on the arts centre but lost the job to Mace in July last year following the dismissal of now defunct contractor Banner Holdings amid complaints that work was behind schedule and sub-standard. Complaints focused on technical issues, such as the guttering. The project, which was originally due to open in spring 2008, is now expected to be completed in September 2011.

Colchester council has already won a court victory against Banner following a bitter legal row, but Banner’s subsequent collapse into administration means the council is unlikely to get any money from the ruling.

T&T had assisted Colchester in its case against Banner but the council insisted it had always intended to take action against the firm. The council said it needed T&T’s assistance in the earlier court hearing and “accordingly the dispute with T&T was put on hold”.

Paul Smith, councillor with responsibility for the project, said: “Initially we were hoping to get compensation from Banner which would have funded action against Turner & Townsend, but due to Banner’s administration, we may not recover all our costs.”

T&T declined to comment.

Meanwhile, the administrator for Banner has dismissed hopes that the Derbyshire firm’s existing contracts can be sold on.

A spokesperson for administrator Bell Advisory said: “There were only a handful of contracts ongoing and most have been terminated. There is one contract that a third party is interested in taking on but it’s out of our hands.”

They declined to say which contract could be taken over.

Banner, a £12m-turnover firm, collapsed into administration earlier this month amid what the administrator described as a “number of funding issues”.

Banner chief executive Peter Elston said disagreements on the Colchester project had cost the company up to £4m in 2008.