When the pier re-opened in April 2016, as shown here, the council was preparing for a Supreme Court hearing in its unsuccessful battle to avoid liability for paying compensation to a trader.
Hefty bill for HBC following pier appeals
Contesting and settling a claim for loss of business when it closed the pier for safety reasons in 2006 has landed Hastings Borough Council with a bill well in excess of £1 million. Nick Terdre reports.
Pier misfortunes are not restricted to the recent loss of community ownership. There were dire consequences for HBC when it closed the pier on safety grounds in 2006 following a long period of neglect by the then owner, Ravenclaw.
One of the affected businesses was Stylus Sports, which ran the bingo hall and an amusement arcade. When Stylus went into liquidation in 2011, its presumed claim against the council for loss of business was purchased by Manolete, an insolvency litigator which specialises in pursuing claims held by insolvent companies on behalf of creditors. According to Manolete, Stylus’s demise was the result of the pier closure.
In 2012 the Technology and Construction Court upheld Manolete’s right to claim compensation from HBC. The ruling appears unfair, as, had the council left the pier in operation and an accident ensued, it would have been held responsible. But there were sound grounds for it, as an independent local lawyer acknowledged in advising the council against contesting the ruling.
Nevertheless it decided to do so, pursuing the case through the Appeal Court and the Supreme Court and losing in both instances. The amount of compensation was then fixed in a confidential arbitration process.
Exaggeration
Though Manolete boasted of a “multi million pound” claim, this appears to have been exaggerated rhetoric. In its 2016/17 accounts the council reported that Manolete was “making a claim against the Council as a result of restricting access in the sum of £300,000 plus £1.5 million for loss of goodwill”.
HBC’s final accounts for 2017/18 show that a sum of £1,379,000 was paid to “settle compensation claims and associated legal and other costs related to pier closure in 2006.” On top of that a provision of £245,000 was made “in respect of the remaining outstanding claims for compensation and costs as a result of the closure of the pier.”
A one-off payment of some £1 million referred to by council leader Peter Chowney in the course of the 2018/19 budget discussion in February, which he said he was not able to identify for legal reasons. would tally with the sum for compensation given in the final accounts.
Details of some of the legal costs incurred by the council have also been revealed by a number of Freedom of Information requests. These show HBC’s barrister’s bills were £21,800 in the High Court – the Technology and Construction Court is part of this court – £26,950 in the Appeal Court and £60,410 in the Supreme Court.
According to HBC, it was also ordered to pay the claimant’s costs of £36,150 for the High Court case and £50,000 for the Appeal Court hearing.
Supreme Court sympathy
The Supreme Court, which showed some sympathy for the council’s case, decided that Manolete’s costs should be equally divided between the two parties. In August HBC’s information officer said it was not yet possible to put a value on HBC’s share, as Manolete had not informed the council what its costs were and nothing had been paid.
So HBC’s overall legal costs came to around £195,000, with half of Manolete’s Supreme Court costs still to come.
This information was supplied to local resident Chris Hurrell, who told HOT it had taken seven months for the council’s information officer to supply the information. He also raised questions about the efficiency of the council’s response to FoI requests when he was seeking information about costs incurred by the council in connection with its appeal concerning publication of the Coffey 2 geotechnical report.
In response to another pier-related FoI request the council reported in July that a payment of £77,308 had been made in May when a guarantee it had given in respect of a Community Builders loan from the Social Investment Business Foundation was called in.
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Nick, when you write “Supreme Court sympathy”, I am not sure what has changed. My reading of the Supreme Court judgment was that compensation was payable regardless of fault, under legislation designed to deal with unsafe buildings, compensating ruined businesses out of public funds. This was not a ‘negligence’ case, but HBC’s appeals effectively tried to turn it into one:
As far as I could see, they alleged fault on the part of the pier tenant, effectively for being in business (thus ‘inviting people into danger’ in a way). This was not an issue the legislation was designed to deal with, as far I could see from the final appeal judgment; and the lower court had already judged the facts and found no fault. HBC were arguing semantics about the meaning of ‘in default’ in a section of the Act. A spurious point, but an obstinate and expensive one.
Going on past council press releases, what stuck in HBC’s craw was that Manolite, a specialist firm of bankruptcy lawyers, should make money out of a general misfortune. But, as I found in my own law case against HBC (on a long-lease housing matter), if there is no money to be made, you cannot get lawyers experienced in your type of case. Not only that: you find precious little High Court precedent for your situation, because not enough cases go far enough to be reported. Manolite Partners therefore serve an important purpose, albeit indirectly, for any of us that might need justice one day.
HBC’s attitude, reported as I recall in the Observer at the time, seemed to me over-defensive of its officers’ decisions, while being over-antagonistic towards the bankruptcy law firm involved. As J B Knight says, businesses and jobs were lost, and people’s lives seriously affected. As a town, we should be big enough to compensate where compensation is due, without being so defensive as to see this as criticism of our officials. I suspect that the combination of being both town chief lawyer and Unison staff union representative might have influenced the decision process.
In my opinion these expensive appeals should not have been allowed by the court, but then, admittedly, I benefit from the experience of seeing the most cynical half-truths written to courts of law by HBC, each time backed by a ‘statement of truth’ signed by HBC’s chief solicitor.
I won my case and I do not have time to take the council to the High Court (as it would have to be) for Contempt. But to me, a past history is there, of contempt for truth, honour and justice, let alone common sense.
I have also noted how the same chief lawyer pushed through changes to the council’s complaints process, evidently to intimidate would-be complainants. What does ‘they will be blacklisted’ mean, I wonder? blacklisted in what way? And I have noted that a councillor was ‘disciplined’ – and left office? – for daring to speak up on the country park issue? When will we have councillors that can stand up to such officials without being lost to us, as forthright representatives? Apart from toilets and potholes, it has all gone a bit quiet, from HBC, hasn’t it?
Comment by Nigel Inwood — Tuesday, Nov 13, 2018 @ 12:50
The pier was in the state it was in when it finally got inspected because of the council.
The traders on the pier were telling the council for a long time the state of the pier and the failings of the owners.
The council turned its back and its ear off as if the knowledgeable business owners were tiresome and an irritant
Therefore by the time a surveyor was reluctantly called in they were so shocked they ordered the closing of the pier.
The cost and loss of the pier and its mess of management and failure of management and halfcocked interest is totally on our blessed Hastings Borough Council.
Many people lost their business and incomes and future and with that all those people who lost their jobs such as the normal employees in the Bingo shops, cafe and event hall.
Have no sympathy for them – council that is.
Comment by J B KNIGHT — Wednesday, Nov 7, 2018 @ 22:39
DAR raises some very important issues here: of course we should be able to see how our elected Members vote on ALL committee decisions. And I agree the Cabinet system set up is not a democratic process. Far too secretive. How many times are the public excluded from these decision making meetings?
This council needs a shake up and must understand that residents are not prepared to sit back and take whatever is dished out to them. The good old days are over for any council which thinks it can dispense with the democratic rights of residents.
For far too long Hastings council appears to have had a free rein to do precisely as it wishes without consultation with the ‘rate payers’ of the town. Enough is enough.
Comment by Ms.Doubtfire — Wednesday, Nov 7, 2018 @ 10:47
The length of time Chris Hurrell had to wait for information from the council’s information officer is another example of dodgy transparency re: HBC. Another one that I have encountered is trying to find out who voted for what on the planning committee re: Harrow Lane Playing Fields. You get the proposer and seconder in the minutes (Davies and Turner in this instance), but no-one else who was involved in the voting. This means that I can’t base my local election vote on full information. It’s time that all councillors were named as in favour, against or as abstentions in HBC council meeting votes. And I think it’s time to get rid of HBC’s cabinet system too: it’s all too secretive.
Comment by DAR — Monday, Nov 5, 2018 @ 15:08
What remains an unanswered important question here is why the council did not take heed of the advisement from Gaby Hardwicke not to pursue appealing the case. And not only appealing it once but twice and right to the Supreme Court.
As this was tax payers money being spent we deserve to know more about who/how in the council made the decision to disregard the advice. The result being more costs and having to pay the Plaintiff’s costs too. Of course this is something I doubt we will never find out. Another secret buried.
You would think after the disaster of a deal with the Panamanian registered company Ravensclaw, the fire and then the compulsory purchase costs of getting the pier back from a company they had no legal recourse – lessons would have been learned. Obviously not as they just kept throwing money at it.
Comment by Bolshie — Monday, Nov 5, 2018 @ 10:40
Piers are notoriously risky ventures financially and structurally, and I have long thought that no public money should ever have supported keeping the pier going especially when the town has more pressing needs.
However,the council was definitely between a rock and a hard place on this one as they do have a responsibility to protect the public against dangerous structures. On the other hand it looks to have pressed the case against good advice.What I cannot understand here is where were the insurance companies sitting behind the different failed businesses on the pier which must surely have told their insurers they were operating on a very old pier? Those firms must have had public liability insurance.
Moreover, dangerous structures wise across the town there are a number of large old retaining walls, sometimes adjacent to public footpaths, which to my eye look very dodgy indeed. Are these being closely monitored?
Comment by ken davis — Monday, Nov 5, 2018 @ 08:09
“The ruling appears unfair, as, had the council left the pier in operation and an accident ensued, it would have been held responsible.”
Damned if you do, damned if you don’t. I pity HBC too. And I well recall taking advice myself six or seven years back from the leader of a very well-respected local community action group, someone whose expertise and local knowledge is held in high regard.
I was seeking his advice about trying to save a local historical building from demolition or unsuitable development.
He said to me that whatever else I did, I needed to get the funding together myself, from whatever resources were available, because HBC had been burned too many times been burned too many times before – joined in, as he put it, with an ardent group of local people desperate to save or re-purpose some site or building, investing council tax payers’ money, and then left holding the baby when the project failed or people lost interest.
But, he said, it could be done from scratch. Look at the Friends of the Pier, he said. They were a tiny unfunded groupuscule and look at their success now!
Comment by JS — Monday, Nov 5, 2018 @ 02:05
Another fine mess. No doubt HBC will manage to borrow this money from their trusted money pot, The Public Works Loan Board.
How much more is this council to cost us in legal charges etc?
Lessons have not been learned because as I understand it despite legal advice, the council pursued this case through the Appeals Court and the Supreme Court.
It’s so easy isn’t it when it isn’t your money that is at risk? Pity the poor ‘ratepayers’ in this town.
Comment by Ms.Doubtfire — Friday, Nov 2, 2018 @ 08:37