Tube hits Freshfields with £140m-plus negligence claim

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  • Can anyone tell me whether there is a set date for the hearing?

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  • Another example of how crucial infrastructure projects in the UK are over-lawyered and over-complicated. The transaction documents are horribly complex, in part due to an absurd number of defined terms.
    How many different sets of lawyers will feast on this project from start to finish? Dozens. It's good for lawyers, but another poor deal for the taxpayer.

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  • Seems like a can't miss case to watch. Is there any chance someone knows the dates of the hearing ? Or is it too early to ask.

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  • Calm down, everyone! I understand Freshfields have not even served a defence yet, so we are looking at mid to late 2013 for any trial - if there ever is one. Which (notwithstanding the formulaic vigorous denial of liability) must be regarded as unlikely if Freshfields did cock up the documentation (as the above appears to suggest). Far more likely is a confidential, eight-figure carve-up at a mediation at some point during 2012.
    Another thing: I wonder why Herbies relinquished a case as big as this to Inces...

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  • We don't have the full details, but this seems like a client error, not a lawyers error. A put option could be at (i) par value, (ii) par + interest, (iii) outstanding debt, or (iv) market value. No sane minded investor would agree to (iv), as the market value degrades rapidly as the credit deteriorates, making the put option worthless. Even if LUL can show there was no express instruction on the point, I doubt they can show that they would have negotiated better.
    Now if the put option requires LUL to pay par when the debt has already been paid down (i.e. over 100 cents in the dollar), that might be a grounds for negligence.

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  • Mind the gap!

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  • The problem was that the put option required LUL to purchase for par plus breakage when the bonds were repayable only at par. Does seem like a mistake, but could have been LUL's, Freshfield's or someone else's...

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  • I guess the moral of this story is - whatch out when drafting contracts !!

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  • ....and also watch your spelling too! (Whatch?)

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