Dispute over unbuilt clubhouse

Type: Construction dispute

Sector: Sports & leisure

Amount: £450,000

The problem

A sports club had sold part of its land to a developer in return for the construction of a new clubhouse on the organisation’s remaining land. As construction costs over-ran, the developer refused to finish the work until additional funds were provided by the sports club. This resulted in a stand-off that saw lawyers instructed by both sides.

The case got stuck for over 12 months in a legal process until the club exhausted its £50,000 fighting fund. Their club’s lawyer was uncomfortable in offering a conditional agreement and was not prepared to cover disbursements such as court fees. It was also unlikely that the case would have been able to get ‘after the event’ insurance for the adverse costs at a commercially viable level.

How Escalate helped

Escalate dragged the case away from the lawyers and moved the discussions on from the respective legal merits, with negotiations held directly between the Escalate corporate recovery professional and the developer.   The fact that, via Escalate, the club was able to demonstrate that the case was funded to the High Court meant that the developer needed to agree to a deal or risk a significant gamble through the court system.

The outcome

We agreed a heads of terms settlement with the developer in just six weeks. Execution was not straightforward as it required new contracts to be drafted. The client was given a choice of lawyers to undertake this work, but chose to use the Escalate team instead.   As a result, the issue was settled and the clubhouse was built.

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