Adjudicators may be needed to settle Wolverhampton Civic halls legal battle
Adjudicators may be called in to sort out the legal battle between Wolverhampton Council and a former contractor over the Civic halls project.
The Labour-run authority is in a legal dispute with Willmott Dixon after the contractor demanded extra cash for its work on the long-delayed scheme.
Willmott Dixon took over the Civic halls project in September 2019 following the collapse of original contractor Shaylor Group, with a contract agreed at £19.1m for the remainder of the work.
But a report the council's auditors Grant Thornton says during the refurb the firm submitted "a significant number of compensation events" for work they believed was outside of the scope of the original contract.
It says the issue could have an impact on the budget, which has already ballooned to almost £50m – nearly five times the original figure.
The report says the council, which is being advised by consultants Faithful+Gould, has challenged the validity of some claims it considers not to be "legitimate".
It adds: "This process of challenge of compensation events is ongoing with some of them resolved between the two parties but where there has not been an agreement there could be a need for an adjudication process.
"The council is currently engaging in legal advice to assist with the compensation events and this remains a live issue.
"The final position on compensation events and the impact this has on the budget is yet to be resolved and we will continue to monitor this from a value for money perspective."
Councillor Ellis Turrell, vice chair of the council’s scrutiny board, said the legal battle had the potential to "incur significant legal costs to the council, particularly if any of these legal challenges end up in court".
"It’s clear from the auditor’s report that the relationship between Wolverhampton Council and Willmott Dixon has completely broken down, and the external auditor is right to keep this situation closely monitored.
"We still don’t know the final cost of this shambolic project, or when this legal wrangling will come to an end."
According to the report, the proposed handover date for the Civic halls was extended eight times amid a "difficult working relationship" between the council and Willmott Dixon.
A City of Wolverhampton Council spokesperson said: "The council has and will continue to robustly protect taxpayers’ interests and independent financial experts have backed City of Wolverhampton Council’s management of this Civic Halls refurbishment project.
"A ‘value for money’ report by independent auditors found there was no risk of ‘significant weakness’ in the council’s management of the project.
"The council will continue to ensure that its contractors comply with the terms of the construction contract and will, where required, take legal advice to protect its position and ensure the best possible outcome for the city, ensuring value for money."
The council eventually ended its relationship with Willmott Dixon and included the works in the contract with promoter AEG Presents with the aim of "speeding up" completion.
The venue – now known as The Halls Wolverhampton – is set to reopen in June following an eight-year closure.
Willmott Dixon declined to comment.
