The first government-backed lawsuit against an academy trust’s former directors has already racked up “scandalous” costs of £900,000 – with its final claims “still not in order” nearly three years on, a court has head.
The Department for Education agreed in 2021 to bankroll the SchoolsCompany Trust’s bid to sue some of its former trustees after it collapsed amid accusations of financial mismanagement.
But a full trial is still on the distant horizon amid complaints about the trust’s “convoluted” allegations.
This week, the High Court heard an application on behalf of Everton Wilson, one of the three remaining defendants in the long-running case, to strike out allegations that he conspired to defraud the trust of money.
John Meredith-Hardy, acting for Wilson, argued his client could not be held responsible for losses made after April 12, 2017, when he was suspended from work. “He cannot be providing any oversight or scrutiny when he is sitting at home. He is not playing any part in the running of the business.”
He added that “as far as [Wilson] is concerned there is not a single item he has been alleged to have taken for his own benefit.
“There is no instance where it is alleged that he has put money in his pocket when he shouldn’t have.”
In court, the trust agreed to withdraw all but one allegation of conspiracy to defraud – which related to payments to a consultant.
‘Scandalous’ cost to taxpayer
But Meredith-Hardy also took aim at the trust’s wider case, set out in a document called a “particulars of claim”.
The law states that these should be “a concise statement of the facts on which the claimant relies”. The actual document runs to 83 pages.
Last July, the presiding judge, Master Dagnall, ordered the trust to provide more detail on the exact damages sought from each defendant. Meredith-Hardy said the trust had not done so.
“They have incurred almost £900,000 worth of costs so far. Their pleadings are still not in order. It’s scandalous, it’s public money.”
A defence filed on behalf of Patrick Eames, who has since settled for an undisclosed sum, said the trust’s claim was “exceptionally long, convoluted and, at times, difficult to understand”.
The trust’s main claim for around £2.8 million to cover its remaining deficit owed to the government is based on an allegation that the defendants failed in their duty to set a balanced budget.
But Meredity-Hardy said there were “very substantial numbers” of academies that incurred deficits at the same time as SchoolsCompany. “The notion that there’s a hard and fixed rule here is self-evidently not the reality.”
‘Extraordinary facts’
But Rachel Sleeman, for the claimant, said the case “does not represent how the majority of academy trusts are being managed by their directors and trustees”.
She added: “These are quite extraordinary facts and that is why it is appropriate to bring this claim.”
The court ran out of time and did not hear the claimant’s response. The hearing was adjourned to July at the earliest but may not be heard until November.
A spokesperson for SchoolsCompany said: “This week the court has heard only from counsel representing one of the defendants. Our response will follow. While action continues, we cannot comment further.”
The DfE refused to comment.
