Kier could face £18.3m action after PFI firm settles with police

Administrators for a defunct private finance initiative (PFI) vehicle said they could move forward with an £18.3m legal claim against Kier over a police station completed 18 years ago.

Administrators for Justice Support Services (North Kent) Ltd said in a progress report that they had settled a legal claim against Kent Police and were now considering turning to the contractor.

The case relates to North Kent Police Station in Northfleet, completed by Kier in 2008, when the company was part of the PFI vehicle alongside HBOS and facilities-management firm Reliance Security Group.

In August 2023 Kent police and crime commissioner Matthew Scott terminated the PFI contract, with the force making deductions from monthly payments since March 2022 over apparent defects.

JSS went into administration in December 2022.

Administrators from AlixPartners sued the police force for £38.8m, accusing Scott of a deliberate attempt to drive JSS out of business so he had grounds to scrap the PFI deal.

They also lodged a claim against Kier but agreed it would be stayed pending the outcome of the case against Kent Police.

Scott responded in legal documents that the building’s heating system had broken down, restricting access to a vehicle yard, and that it had other defects including a leaking roof and fire safety risks.

A civil case against Kent Police was due to go to trial this month but the parties settled just before it went ahead.

Although the terms are confidential, the new progress report from adminstrators at AlixPartners said that, as a result of the litigation, a £21.4m debt JSS owed to the Bank of Scotland will now be able to be paid off in full.

The report adds: “The litigation against Kier Construction Ltd remains stayed. Given the commonality of certain aspects of this with the Kent Police litigation, the further steps in relation to this claim will now be considered.

“The quantum of further realisations into the estate, and therefore the final outcome to creditors, is dependent upon conclusion of the litigation against Kier Construction Ltd.”

Kier declined to comment on an ongoing legal matter.

The company sold its 42.5 per cent share in JSS in 2013. HBOS and Reliance Security also sold their stakes. They held 42.5 per cent and 15 per cent of shares respectively.

Prior to the administration, the PFI firm was owned by investment firms Aberdeen and Equitix.

Scott said: “During the complex legal process, my office has worked closely with the force to ensure the station has always remained operationally fit for purpose, and there has been no negative impact on the communities served by the officers and staff working at the site.”