Councils embroiled in Thurrock solar investment litigation to "vigorously defend" claim

A number of the 23 councils named in Thurrock Council's £40m compensation claim over allegedly "negligent" valuations provided by the Association for Public Service Excellence (APSE) have vowed to "vigorously defend" the litigation.

Thurrock issued proceedings on Friday (15 November) against a representative group of 23 member councils of APSE, contending that the association provided negligent valuations of solar farm assets that it says led it to invest millions in bonds.

The unitary said it would be moving immediately to secure an order to stay the proceedings to "minimise costs for all involved and to allow the council to focus on other recovery options".

A number of councils caught in the litigation have now hit out at Thurrock's claim, describing it as "disappointing" and "unjustified".

The claim centres around valuations produced in 2017, 2018, and 2020 by APSE for Rockfire Capital, an investment fund run by a businessman named Liam Kavanagh.

Rockfire and its associated companies later collapsed, partly contributing to Thurrock issuing a section 114 notice in December 2022.

The unitary claims that the valuations of solar assets undertaken on a commercial basis by APSE were "negligent" and "overvalued" those assets.

Thurrock previously valued its compensation claim at between £42 and £54 million. However, APSE believes the issues of quantum are circa £17.6m.

Thurrock, which has been subject to statutory intervention since September 2022, is seeking to recover around £150m from Kavanagh, who has strongly denied allegations that he used funds to maintain a lavish lifestyle.

In a letter warning its members of the potential litigation earlier this month, APSE's management said the APSE associate who prepared the valuations stood by his calculations, "which have been rigorously revisited on numerous occasions".

APSE has also "vigorously" disputed Thurrock's argument that it must seek to recover from the association and its member councils to meet its Best Value Duty. It has argued that the association had no duty of care to Thurrock and there were no material errors in the valuations provided.

The 23 councils named in the claim were Gedling, Derby, Bolsover, Wolverhampton, South Tyneside, Warrington, Stockton-on-Tees, Preston, West Lindsey, East Riding of Yorkshire, Luton, Isle of Wight, Eastleigh, South Oxfordshire, Hertfordshire, Bournemouth, Christchurch and Poole (BCP Council), Oxfordshire, Bristol, Swansea, Vale of Glamorgan, Cardiff, Southampton and Flintshire.

A spokesperson for South Tyneside Council, which is one of the 23 councils named, has since described the litigation as "completely unjustified", adding: "This claim made against us will be vigorously defended."

Richard Ivory, Director of Legal & Governance at Southampton City Council, another council involved in the legal challenge, said his council did not "believe there is any valid cause of action by Thurrock Borough Council" against it.

"If any proceedings are issued, they will be vigorously defended", Ivory added.

Bolsover District Council said the council is yet to receive any papers from Thurrock.

A spokesperson for Bolsover said: “The Council has had no involvement in the events referred to in the claim that we understand Thurrock have made and intends to vigorously defend itself.”

Graham Farrant, Chief Executive of BCP Council, said: "This is a very disappointing action as we do not believe that BCP Council owes any liability to Thurrock Council for their historical investment decisions.

"We are working alongside APSE member councils on the response to this action."

Hertfordshire County Council has meanwhile said it is liaising with APSE and other members "but due to the potential legal action, we can't comment on the specifics at this point."

A Preston City Council spokesperson said the council "is extremely disappointed" by the legal threat.

They added: "This is a case that has been ongoing for some time and Preston City Council vigorously defends its position as a member of the Association for Public Service Excellence (APSE) which is a not-for-profit, unincorporated association.

"Preston City Council is taking legal advice in respect of its position and is playing an active role in ongoing discussions with fellow members."

A spokesperson for South Oxfordshire District Council said the local authority is "taking all relevant and necessary legal advice".

A spokesperson for West Lindsey District Council also confirmed that the council is communication with APSE and taking appropriate legal advice.

West Lindsey also said that it is yet to receive papers or confirmation from Thurrock's lawyers on the issue of proceedings.

APSE has been approached for comment.

Adam Carey