Sir Fraser Morrison has put an end to his £130m High Court battle with water giant AWG by paying an out-of-court settlement understood to be up to £10m.
The £10m is understood to have covered the legal fees AWG have incurred so far. Senior legal sources told Building the case, which was due to be heard in court next week, has cost both parties millions of pounds.
AWG's 2005 annual report last June said the company had spent £4m on the case by that point.
According to the sources, the decision to settle AWG's claim out of court was reached after both parties realised the case, expected to last for nine months, was going to cost £9m each.
Following the settlement deal, Jonson Cox, AWG chief executive, said: "I am pleased we have resolved yet another legacy issue to our satisfaction following an acceptable settlement proposition from Sir Fraser."
I am delighted that we have been able to sort out this long-running matter
Sir Fraser Morrison
Morrison said: "I am delighted that we have been able to sort out this long-running matter to our mutual satisfaction following Jonson Cox's personal intervention. I wish AWG continued success under his leadership."
Morrison Construction was sold to AWG for £263m in 2000. AWG's central allegation was that Sir Fraser Morrison and his former head of construction, Stephen McBrierty, claimed that the company would make a £30m profit by March 2001. When it actually made a £46m loss, AWG accused the pair of fraudulently overpricing Morrison Construction at the time of sale.
The trial was due to start in December last year but was postponed after the judge, Justice Evans-Lombe, was forced to stand down. It was revealed that he knew one of the key witnesses, AWG's former deputy chairman, Richard Jewson. The trial was rescheduled and was planned to start on 13 February.