UNDERFIRE PROPERTY EXPERTS LAMBETH SMITH HAMPTON: SHADOW LOOMS OVER LUCRATIVE PUBLIC-SECTOR CONTRACTS
£90m Lord Street Case collides with growing LSH business with government and local authorities
The surveyors have just secured a fresh £500,000 Birmingham City Council contract
The defendant provides independent professional assessments to the West Midlands’ authority.
But controversially, LSH was involved supplying similar services to the Isle of Man government.
However, the deal turned sour, when a developer accused them of not being ‘independent’
Since then, the Skipton-owned subsidiary has been mired in seven years of costly litigation
LSH is still listed as a trusted and vetted contractor on several ‘automatic’ government procurement systems
Potential Lord Street costs are not separately identified as a provision in their latest accounts
A possible adverse finding on professional integrity could create a procurement problem
This is Part Six of The Armadillo’s investigation into the £90 million Lord Street court battle. In this installment, we learn how Lambert Smith Hampton is expanding public-sector work all over the UK - and ask whether the landmark case will affect future work
The £90 million Lord Street litigation is unfolding at a sensitive moment for Lambert Smith Hampton - as the consultancy expands its public-sector role across Britain.
LSH remains a defendant alongside the Isle of Man’s Department of Infrastructure and Treasury in the long-running action brought by Sondica Group Inc., over an allegedly bungled redevelopment tender.
But meanwhile LSH is continuing to win lucrative public-sector work based on trusted professional judgment on the UK mainland.
Sondica is asking the Manx courts to examine what happened to an earlier professional assessment prepared by the firm.
LSH has this month secured a four-year contract worth £500,000 with Birmingham City Council to independently assess financial viability appraisals submitted with local planning applications and appeals.
Coincidentally, the Lord Street case is a legal test of similar issues.
Sondica alleges that their bid was not subject to ‘independent assessment,’ a claim which is denied.
The case dates back to 2017 when Sondica hoped to build a £50 million state-of-the-art retail and hotel complex in the heart of the island’s capital, Douglas.
LSH initially recommended Sondica’s proposal as the strongest bid.
However, a later recommendation reversed the position following alleged ‘misfeasance’ and ‘interference’ by the Isle of Man Government.
LSH and the Government defendants dispute Sondica’s case.
Even though no judgment has yet been made, the juxtaposition is uncomfortable, according to industry insiders.
One property developer told The Armadillo: ‘Birmingham is entrusting LSH with independent professional assessments.
‘LSH are well known for being very good at that.
‘However, while another court considers allegations surrounding an earlier public-sector assessment, there’s always going to be uncertainty. And Birmingham is not a marginal client, either.’
LSH is a big player with councils, the NHS, schools and government departments in all things propery – and has even be pre-vetted so that contracts can be signed quicker.
The company appears on six property lots of the UK government’s list of pre-vetted companies open to use by public-sector organisations selling or acquiring land and buildings.
Under the Government Commercial Agency’s Estate Management Services 2 framework preferred suppliers, that have already undergone government checks, are fast-tracked by local authorities.
The company’s latest accounts show why Lord Street could matter financially, too.
For 2025, LSH reported revenue of £116.7 million, operating profit of £5.28 million, profit after tax of £2.56 million.
There’s cash of £7.66 million and shareholders’ funds of £20.25 million.
The £90 million figure is the overall potential claim and does not mean LSH itself faces full liability for that sum.
But even a smaller uninsured exposure could be material compared with its profits, cash and equity.
The accounts contain £442,000 in provisions for ‘claims and litigation’, described as sums set aside for customer claims below professional-indemnity insurance excesses.
Lord Street is not separately identified.
Possible explanations include insurance arrangements and accounting rules.
Local reporting and background:
Previous Armadillo instalments:
Comments