Airport company ordered to pay millions in costs

NEWCASTLE AIRPORT ... bosses won a legal battle, but were awarded just �2 damages.

NEWCASTLE AIRPORT ... bosses won a legal battle, but were awarded just �2 damages.

THE company which runs Newcastle airport has been told to pay the costs of a multi-million pound legal dispute with a firm of solicitors - despite “formally” winning, lawyers say.

But Newcastle International Airport Ltd - part owned by local authorities - says taxpayers will not be hit because an insurance policy is in place.

Airport bosses sued Eversheds for alleged negligence in relation to contracts given to a former chief executive and finance director which contained multi-million pound bonus clauses.

In October last year, a High Court judge ruled against the company and dismissed a claim for damages.

Airport chiefs challenged Mrs Justice Proudman’s ruling in the Court of Appeal, arguing that she had been wrong on “all issues”.

The appeal court ruled in airport bosses’ favour on one point.

Judges questioned whether damage had been done - and said Eversheds should pay “nominal” compensation of £2.

Appeal judges said solicitors Eversheds should have provided a “memorandum” explaining a summary of changes to contracts - and said “formally” the airport’s appeal was allowed.

But they postponed a decision on who should pay what legal costs - thought to run into millions of pounds.

Eversheds says appeal judges have now analysed arguments and ordered Newcastle Airport to foot its legal bill and Eversheds’ legal bill.

A spokeswoman said: “Eversheds has been awarded costs for both the first trial and the appeal.”

Judges had heard that Newcastle International Airport Ltd was owned 51 per cent by local authorities in the North East and 49 per cent by CPH Newcastle Ltd - a subsidiary of a banking group.

But an airport spokeswoman said the decision on costs would not result in a “call” on the public purse because insurance was in place.

“Newcastle International Airport Ltd notes the decision of the Court of Appeal in respect of costs associated with its appeal in its proceedings against Eversheds,” said the spokeswoman.

“Whilst disappointed at this outcome, Newcastle International Airport Ltd wishes to highlight that in conjunction with its solicitors it put in place at the onset of this litigation a range of measures, including legal expenses insurance, designed to ensure there will be no call upon company finances, or the public purse, as a result of these proceedings.”

Airport chiefs had sued Eversheds in relation to contracts entered into with former chief executive John Parkin and former finance director Lars Friis, who is dead, in 2006.

Eversheds said lawyers acted in ‘’good faith on the basis of instructions’’.

Mrs Justice Proudman said directors of Newcastle International Airport had not properly understood that they entered into contracts which allowed the two men to claim bonuses totalling £8 million seven years ago.


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