Hackney Empire Wins £1.1m Payout From Insurers Thanks To Lord Sugar

Hackney Empire has received £1.1m from an insurer after a lengthy court battle in which they have been supported by The Apprentice's Lord Sugar.

Extensive refurbishment works were carried out to the theatre between 2001 and 2003 before its building contractor (Sunley Turriff Construction Ltd) went bust with over £1m of work left to be done and subcontractors/suppliers unpaid.

The theatre sought to complete the works at considerable extra cost reopening in 2004, when they also asked a commercial bondsman (guarantor of the contractor) [Aviva, then called Norwich Union] to pay up on its £1.1m bond. Aviva refused relying upon various technical defences, and since then a lengthy legal dispute has ensued.

Hackney Empire could only take on Aviva because of support (including, but not limited to, funding) from Lord Sugar; from CMS Cameron McKenna (solicitors) acting on a "no win, no fee" agreement; and with a QC being found who would act on a partial conditional fee agreement in 2009. If one of these elements was missing it is very likely the claim would have died. Only with these elements (and an After the Event insurance policy) in place was litigation commenced in 2010 (after going through the usual pre-action processes).

Hackney Empire won at first instance (July 2011) and when Aviva appealed (December 2012). Their QC was David Thomas QC.

The Supreme Court refused Aviva permission to appeal on 28 March 2013. As a result Aviva could no longer deny it was liable for the full £1.1m value of the bond (as well as interest and Hackney Empire's costs). This has now been paid.

There was a trial in April 2013 about how much interest Hackney Empire receives for the last 10 years of waiting for its £1.1m (which has now been paid). The Empire has been awarded £470k which is roughly 2% over base rate for the duration of the dispute.

"This win against Aviva is of enormous significance to Hackney Empire and sets the seal on a new chapter in the organisation's history," said Claire Middleton, chief executive of Hackney Empire.

"It has allowed us to clear balance sheet debt that has been hanging over the company since Aviva's initial refusal to pay out on its insurance bond in 2004 and has thus underpinned the Empire's new business model.

"We would like to thank Rupert Choat at CMS Cameron McKenna and David Thomas QC for their tremendously skillful and determined handling of the case; and also Lord Sugar for his consistent generous support of the Empire and the litigation process."

"This was a David versus Goliath battle but we had a giant of our own fighting with us in the shape of Lord Sugar," says Rupert Choat of CMS Cameron McKenna, the firm who acted on behalf of the Hackney Empire.

"Aviva lost at every stage and the theatre has obtained its maximum possible recovery. But the claim was within a whisker's breadth of not being pursued; it only happened because of the no win no fee basis - an arrangement that new rules will prevent in the future."

To post a comment, you must register and login.