Lendlease sued over ‘defective schools’

Lendlease is being pursued by a PFI company it formerly co-owned over alleged defects on five Lancashire schools.

The schools – built from 2007 by Lendlease, then called Bovis Lend Lease, under the Building Schools for the Future programme – are the subject of two legal cases being pursued by the company that holds the PFI contract relating to them, Lancashire Schools SPC.

Alleged defects at facilities known as Burnley Campus, Pendle Vale Campus and Shuttleworth College include fire defects, acoustic defects, wall-tie defects, energy defects, render defects and “miscellaneous defects”, according to court documents. These defects are subject to a single legal claim.

The second claim relates to the Sir John Thursby Community College and Ridgewood Community High School, which share a site. It alleges the schools have acoustic defects, wall-tie defects, fire defects, architectural, civil and structural defects, mechanical and electrical defects, energy defects and render defects.

The PFI vehicle, which is owned by infrastructure fund managers Aberdeen and PGGM, has launched action against Lendlease over all the buildings, and maintenance company Equans – a subsidiary of Bougyues – over the Sir John Thursby site.

In February 2023, Lancashire County Council told the PFI company it planned to withhold its service payments because of the defects.

According to company accounts filed by the PFI vehicle, at a meeting in late May 2023 the council agreed not to deduct payments until it had carried out further testing of the school buildings.

The PFI company has now also brought legal action against the council. The former is attempting to force the council to declare its view on the state of the alleged defects at the Sir John Thursby site.

The PFI vehicle argues that if defects are present, Lendlease or Equans are liable for their costs and payments should not be withheld from its contract. If they are not present, it argues, there should be no deductions from its payments anyway.

Earlier this month the council failed in an attempt to get removed from the legal action and have the case referred back to adjudication between the PFI company, Lendlease and Equans.

Lancashire Council had argued that it is a “public authority which, in financially straitened times, does not want to become embroiled in costly litigation unless it has no other option”. However, judge Alexander Nissen said there can be “no special pleading” from a public body over costs and that the dispute is too complicated to be resolved by adjudication.

Nissen added it is “likely” that Equans will become a defendant in both actions. Lendlease has indicated that many of the alleged defects were the result of maintenance issues rather than new-build issues, the judgement said.

Neither company had filed a full defence at the time of the judgement.

Lancashire Schools SPC was set up in 2006 and initially called Catalyst Education (Lancashire). It was ultimately co-owned by Bovis Lend Lease and Uberior Infrastructure, which became Aberdeen Infrastructure.

Lendlease’s stake was transferred to Civis, a subsidiary of pension fund PGGM, in 2016.

A spokesman for Lancashire County Council said: “As a council, we look forward to seeing the PFI contractor resolve these issues with its supply chain.”

They added: “For guidance, the tests are ongoing during holiday periods to minimise disruption to schools.

“We take very seriously health and safety compliance relating to the provision of educational services, and we are repeatedly assured that any alleged defects do not affect health and safety.”

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