Wembley case: round one

Next month sees the start of legal proceedings surrounding the new Wembley stadium project that could last even longer than the protracted construction process itself, which was hit by a further blow on Monday when an incident led to the workforce being evacuated from the site.

That is the prediction made by legal experts and sources close to both sides of the first major dispute to emanate from the troubled project, between main contractor Multiplex and steel subcontractor Cleveland Bridge.

The case will start on 25 April and could last well into 2007. It might also spark a wave of further cases, which given Multiplex predicts £150m plus losses on the project is hardly surprising. The expected fresh cases surrounding the scheme is already exciting many in the legal fraternity, with one pointing to how the case is something of a throwback to more litigious times in industry prior to when the Construction Act was established in 1997. "This is old-style litigation, before everyone was nice to each other," the source says.

This is old-style litigation, before everyone was nice to each other

Market source

The Cleveland case, brought in the wake of the departure of the steelwork subcontractor from job in August 2004, will come two months after a further delay to the completion of the job, which led to this year's FA Cup being transferred to the Millennium Stadium in Cardiff, confirmed by the Football Association last month. The importance of the case is now greater given the potential knock-on effect on Multiplex's eventual losses on the job. "It's turned up the temperatures," one source claimed. The case will first consider liability, which is due to last six weeks, and then quantify the liability.

The first central issue that High Court judge Justice Jackson will consider is which firm broke, or repudiated, the contract first when Cleveland left the job and what the true value of the work Cleveland carried out amounted to when it signed a heads of agreement deal with Multiplex in February 2004. The two signed a supplemental agreement to their contract to stave off a claim for extra costs by Cleveland so the subcontractor could concentrate on getting its job done rather than entering a dispute with Multiplex. This fell apart during the summer leading to claim and counterclaim from the two sides.

Legal action is being looked at in the way in which a

Market source

Sources point to the strong possibility of future legal action. "This is just the tip of the iceberg," one says. "This case will create the roadmap for future ones," another source adds. Multiplex chairman Allan McDonald pointed at the end of last year to "a series of claims and counterclaims" that were "yet to be resolved in respect of this project, including those related to the client, subcontractors and consultants". A source close to Multiplex added: "Legal action is being looked at in the way in which a prudent contractor would in such a situation." A claim could be against the civil and structural design consultants the Mott Stadium Consortium, which includes Mott MacDonald, Sinclair Knight Merz and Connell Wagner. A Multiplex spokesperson this week reiterated that it told the consortium to put its professional indemnity insurance on notice, but the firm had "not started any legal action".

A statement from Mott MacDonald stated that it was not being sued by Multiplex, and that it presumed the current legal activity surrounded the upcoming Cleveland case.

There could be further work for the Multiplex legal team from other sources, some rather unexpected. The final completion date is still up in the air, which could impact on planned music concerts such as one planned for June by US rock group Bon Jovi, which could lead to claims. Then there is the case of Adrian and Wendy Steel, who planned to be the first couple to get married on the pitch the week after the FA Cup final in May. They have shelled out £40,000 on the arrangements and are waiting to hear whether it will go ahead - if not they will seek a refund. Given the trouble that has beset the new Wembley during, and no doubt after, construction it might be best for the Steels to seek a more reliable venue.