Wragges scoops work on PFI courts project

Wragge & Co has closed a £31m magistrates court PFI scheme and is working on three similar instructions after completing a pathfinder project for the sector last year.
The latest scheme will see the building of new courts in Chesterfield and New Mills and the restoration of a Grade 1-listed former courthouse in Derby.
Wragges head of PFI Stephen Kenny led the team advising Derby City Council and Derbyshire County Council on the scheme, which has a capital value of £31m. He was assisted by David Fennell and Tony Cheema.
The team won the work originally in a formal pitch two years ago, competing against firms that included Denton Hall (now Denton Wilde Sapte). But the scheme was delayed when the Lord Chancellor's Department (LCD) decided to use it to test whether listed buildings could be used in PFI court projects. Listed buildings have rarely been included in PFI schemes because of the extra level of risk they bring to the deal. This is the first time a Grade 1 property outside London has formed part of a PFI project.
As a result, the LCD required an additional stage in the procurement process. An extra raft of negotiations also had to be conducted with English Heritage.
Kenny said: “There's obviously an additional consent requirement. You need listed building consent on top of normal planning consent and there are different risks involved. Our role advising the authorities had to reflect that risk profile.”
Kenny's team advised on the outline business case for the project, on the procurement process, and in the latter stages of negotiations it developed the contractual and risk arrangements with the preferred bidder, leading to the appointment. The deal did not involve a significant transfer of employees to the private sector.
The winning bid, selected from some 12 contenders, was made by the Derbyshire Courts consortium, led by Babcock & Brown Properties. Freshfields Bruckhaus Deringer advised, led by senior associate Alex Carver. The main funder was Abbey National, advised by Denton Wilde Sapte project finance partner Joanne Horridge.
The scheme is the fourth to be signed following a pathfinder scheme for Hereford and Worcester in which Kenny advised the Magistrates Courts Committee. The sector has become a key target area within Wragges' PFI strategy and the firm is advising on similar schemes for Somerset, Bedfordshire and Gloucestershire. The firm's early involvement in the sector has been crucial to winning these instructions.
“We were producing the documentation for the first time,” said Kenny. “One of the key things is developing a standard approach of method in the documentation.”
The firm's experience in tackling the inclusion of a listed building in the Derbyshire scheme is also likely to be drawn on in future court projects.
In addition to local authority schemes, Wragges' other key target areas for PFI are transport and defence. Partner Michael Whitehouse is currently advising a bidding consortium in the controversial Tube PFI, while Kenny recently advised on TRW's failed bid for the £1.7bn Government defence project known as Project Bowman.