Axed school construction projects could cost government in legal fees

Millions of pounds intended to be saved by scrapping school building projects could be spent on legal fees as the government faces a spate of litigation from contractors and local authorities. Grounds for judicial review and the legal duty to compensate contractors which have begun working on the schools could lead to a mass of legal actions against the government, experts say. “It is very unusual for such a huge number of contracts to get axed mid-stream,” said one legal expert in public construction contracts, who is close to the schools programme. Although the department for education said contracts for the schools had not yet been signed, avoiding expensive termination payouts, lawyers are expecting a stream of claims by local authorities, which have hired architects and other professionals to work on plans. “If there has been any detrimental reliance by local authorities, there could be a basis for a claim in legitimate expectation,” said Richard Gordon QC, a public law barrister at Brick Court chambers. “The local authorities would have to show that the government’s statements were clear, unequivocal and that they relied on them, but it seems there could certainly be a basis for a claim.” The law on “legitimate expectation” has been used in the past to reverse government decisions. In a famous case in 1999, Heather Begbie successfully challenged the decision of the incoming Labour government to abolish an assisted places scheme that had allowed her to attend a private school. In 1998, Pamela Coughlin, who is tetraplegic, successfully challenged the secretary of state for health’s decision to close a care home on the basis that she had been promised she could remain there for life. However, the courts have been deferential in interfering with government decisions on social and economic policy after the “separation of powers” doctrine in the UK‘s constitution. Nusrat Zar, a partner at the legal practice Herbert Smith, said: “There is an element of deference by the courts towards public bodies. But the courts may feel comfortable that the termination of school building programmes is not a specialist economic issue – there is no automatic assumption that the courts would not examine the question. “There may be a public interest defence for the government in which they could argue that subsequent events mean that they have had to move away from the promise made by Labour, and that it would not be proportionate or fair to keep it.” Although no cases have yet been brought, the prospect of expensive high court litigation is likely to add to the controversy over the announcement by the education secretary, Michael Gove.

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