Trams lawyer knew council was told false information
A lawyer has said he allowed false information about Edinburgh’s tram contract to be submitted to the city council.
The inquiry heard changes to the contract opening the council up to demands for more money were negotiated by tram firm TIE before the deal was signed.
TIE’S lawyer Andrew Fitchie accepted sections of the report to the council did not reflect the true picture of risk built into contract.
The spectre of fraud has been raised at the tram inquiry after a senior lawyer admitted councillors were given false information about the risks just before signing the multimillion-pound contract.
The inquiry into the botched construction of the £776 million line heard that changes to the contract were negotiated by tram firm TIE in the months before the deal was signed in May 2008.
These changes opened the council up to demands for more money from contractors, and TIE’S lawyer Andrew Fitchie was concerned about the increased risk to the public purse.
However, when councillors were briefed as they weighed up the decision whether or not to sign the document, these concerns were omitted and councillors were told there had been no change to the risks involved.
Mr Fitchie acknowledged that some sections of the reports presented to the council at the time did not reflect the true picture of the risk built into contract drawn up with the consortium building Edinburgh’s new tramline.
And he admitted he had knowingly allowed the false information to be given to the council shortly before the contract was signed.
Mr Fitchie, who was seconded to TIE from law firm DLA Piper and was paid a £50,000 bonus for his work, told the tram inquiry chaired by Lord Hardie that he had given TIE advice on how provisions negotiated in Schedule Part 4 of the contract would allow the contractors to demand more money when there were changes.
Nevertheless, the reports to the council claimed that in broad terms there had been no shift in risk since the final business case in October 2007.
Mr Fitchie recalled a meeting – immediately after he had met TIE chief executive Willie Gallagher about his bonus – when he said he had repeated the advice.
He said: “Present at the meeting were Steven Bell, Geoff Gilbert, Jim Mcewan, Denis Murray and possibly Graeme Bisset. They didn’t like the advice I was giving. And I must stress the individuals receiving that advice in TIE had been the people who were negotiating Schedule Part 4 on their own all the way through this period from January 2008 until effective close-out in March.”
Inquiry counsel Jonathan Lake QC asked him: “Going back to May 2008, then, you would have been aware that they were knowingly providing false information to the council?”
Mr Fitchie said: “I would hesitate to go as strong as that. I agree the information in these reports was deficient.”
Lord Hardie intervened and said: “It’s more than deficient, it wasn’t accurate, it wasn’t true, so it was false.” Mr Fitchie agreed. Mr Lake said: “You hesitate there because you know the legal significance of knowingly providing false information to someone, don’t you? It amounts to fraud, doesn’t it?
“And you were aware of that in May 2008, you were aware that’s what was happening?”
Mr Fitchie said he had allowed the information to go to the council.
Lord Hardie said: “Does it not follow that you knowingly permitted this to be submitted to the council in the knowledge it was false.” Mr Fitchie said: “Yes.” But later in the day, crossexamined by Roddy Dunlop QC, for DLA Piper, Mr Fitchie changed his stance.
Mr Dunlop highlighted sections of the same report, which listed elements of risk retained by the public sector under the contract.
One section said: “Tie/city council will bear any incremental construction programme cost consequences of [design company] SDS failure to deliver design outputs in a timely and sufficient manner to the consenting or approving authority.”
Mr Dunlop asked him: “Looking at these other aspects, do you retain the view that the document is, read as a whole, misleading?”
Mr Fitchie replied: “No, I don’t and I’m sorry for it. I made a hasty judgement being shown the extract sand shown the document in the way I was earlier.”
Mr Fitchie also claimed that the council was aware of the implications of the contract.
The inquiry continues.