Newcastle Airport ordered to pay Eversheds’ costs pending appeal

Newcastle International Airport (NIA) has been ordered to pay more than £500,000 of Eversheds’ legal costs into a holding account after it failed in its attempt to sue the firm for negligence.

Newcastle Airport

The airport has been granted permission to appeal the ruling handed down by Mrs Justice Proudman earlier this month (2 October 2012) on the basis of public interest, but the court has also said the airport must be prepared to be held liable for Eversheds’ costs.

It is understood that the firm was preparing an indemnified costs claim against NIA after Proudman J rejected claims that Eversheds breached its duty to the airport.

It was alleged that Eversheds had allowed two directors of NIA to pocket bonuses of £8.5m after following instructions given by them to advise on a £377m refinancing deal with RBS.

The airport argued that Eversheds was aware that the two directors held interests distinct from the airport and that those interests conflicted with it because they were aiming to get the best possible terms in new employment contracts.

It was alleged, therefore, that when the firm was amending executives’ employment contracts the firm should have first contacted the independent remuneration committee to ensure that the instruction was correct.

Proudman J said that remuneration committee chair Rosemary Radcliffe was made aware of the changes but that she had not bothered to read the material properly.

The judge stated: “Miss Radcliffe did not bother with the minutiae; she concerned herself only with the broader picture.

“In the course of oral evidence she used the expression of ‘legalease’ in a contemptuous and dismissive manner on countless occasions […] If she read the documents at all she only skim read them […] She seemed to think it was not her job to read any documents which could be categorised as legal documents.”

The council could now be held liable for all Eversheds’ legal costs, which could run to more than £1m should the appeal fail.

Eversheds turned to Clyde & Co professional indemnity chief Sarah Clover to defend the case. She instructed 4 New Square’s Ben Patten QC.

Ward Hadaway partner Tim Toomey instructed 4 New Square’s Nicholas Davidson QC for the airport.