With one week to go until the deadline for legal claims against APSE to be issued, Thurrock Council is urging APSE to urgently agree a way forward with its members following months of negotiations.
The claim is in relation to the valuation by APSE of an investment made by Thurrock with an individual called Liam Kavanagh and companies associated with him operating under the name Rockfire Energy. The council has been in discussions with APSE management since last September, but the clock is ticking on a decision as the legal claim must be submitted by 19 November.
APSE has been aware for many months that a potential limitation period accrues on 19 November 2024. Therefore, unless a standstill agreement can be entered into before that date, Thurrock Council will be compelled issue a claim.
Whilst Thurrock Council remains committed to seeking a constructive solution to the issues (including entering into a standstill agreement), APSE has only properly engaged with these issues belatedly. Therefore, it may need to take steps to preserve its claim by issuing a claim and applying for a stay.
The council believes that valuations of the solar assets undertaken by APSE which they allowed the council to rely on were negligent and overvalued those assets. As a consequence of relying on those valuations the council did not have adequate security for the value of the investments made with Liam Kavanagh and companies within the Rockfire group between 2017 and 2020. It is the council’s view that this has led to significant financial losses to Thurrock with negative impact on taxpayers and service users. While the council’s primary focus is on recovering money from Mr Kavanagh (and his associated companies) who sought to line his own pockets from the public purse, we also have a duty to pursue those whose actions led to the poor investments.
Normally where organisations carry out commercial valuations, they ensure that there is sufficient insurance in place to cover potential liability. If this had been in the case here, the council would have been able to seek recovery from APSE`s insurers and not other members of the local government sector.
As a council in statutory intervention, Thurrock has a fiduciary duty to taxpayers, to pursue all action that could see some of the lost investments brought back to the borough. The council has not taken this decision lightly and it is based on detailed analysis of the evidence and leading counsel’s advice.
Through its legal representatives, Thurrock first wrote to APSE’s executive in September 2023 notifying them of the council’s claim, and has been in correspondence since and have also met with members of the executive.
If a standstill agreement cannot be reached, the Council will issue proceedings but would seek a stay so that other means of recovery can be pursued before any steps are taken to progress its claims against APSE members. If sufficient recoveries are made, the council will not need to pursue its claim against APSE’s members.
Cllr John Kent, Leader of Thurrock Council, said: “Thurrock Council promised its residents, as well as Commissioners and the Government, that it will leave no stone unturned in its attempts to recover public money that was lost through its well-publicised poor investments.”
“While our primary focus is on recovering money from those who sought to line their own pockets from the public purse, we have a duty to consider all lines of recovery. This includes pursuing those organisations whose incorrect advice also contributed to the council’s decision to make the poor investments. Regrettably, the advice that APSE provided on valuation (relied upon by the council) was wrong and gave the council a confidence in its decision to make its investments that did not reflect the reality of the situation. This in turn led to a course of events that cost Thurrock residents millions of pounds.”
“It is extremely concerning that APSE, in undertaking advisory work on commercial matters, has not had in place appropriate safeguards to limit the financial exposure and liability to its member Local Authorities.”
“We are fully aware of the huge financial pressures facing local government, and we have no desire to increase that burden, but we do need APSE to take responsibility for the advice they provided and to help right those wrongs for the people of Thurrock.”