Big chunk of Edinburgh council's tram settlement could have been lost, councillor claims
Lib Dems, Tories and Greens accused of ‘gross misjudgement’ over approach to tram project case
A large slice of the compensation payment secured by Edinburgh council in an out-of-court settlement over legal advice on the original trams project could have been lost if the case had proceeded any further, a councillor has claimed.
The council had been suing international law firm DLA Piper for £200 million for “negligent legal advice” provided to TIE, the council’s arms-length tram company, over the long-delayed and over-budget project. The case was due to go to court in March, but a report to Thursday's full council meeting said the litigation had been resolved out of court.
The council has said under the terms of the agreement with DLA Piper it cannot disclose the amount of the settlement.
However, SNP councillor Danny Aston accused the Liberal Democrat, Conservative and Green groups of “gross misjudgement” over the way the case was approached and said it could have lost the council a big chunk of the settlement.
He said: “When we had two options on the table - whether to pursue this case independently, on our own, and trust the strength of our legal arguments, or potentially give a very large sum of whatever settlement we ultimately received to a third-party funder, despite the strength of our case, that's what the Lib Dems, Tories and Greens decided to do. It’s only good fortune that the case settled when it did.
“Labour and ourselves trusted in the case and the advice we received, but is is important that the voting public out there are aware of the poor judgement exercised in such an important decision by three of the groups sitting in this room.”
Cllr Aston said the settlement meant the council might now be able to draw a line under “this whole sorry episode”. He said: “The original tram scheme was a debacle on the most monumental scale, which has done incalculable damage to public trust in this council - damage that, I would say, we still have not recovered from.”
Fellow SNP councillor Neil Gardiner said when councillors had to decide on the approach to the case, a briefing by legal officials had left him “utterly convinced” the council had a strong legal case and did not need any agreement with third parties who would hive off part of any award.
He said: “It’s good that the outcome has been what it was, but a lot of that settlement may have been flushed down the pan had what the other groups instigated come to pass.”
Green councillor Chas Booth said he was pleased the council seemed to have learned the majority of lessons from the original trams “fiasco” and that the extension to Newhaven was delivered largely on time and on budget.
“However, there are still a long list of snagging issues associated with the tram extension, including impacts on pedestrians and cyclists and a whole host of landscaping issues that are still being resolved - and that delay is not acceptable. So while the council's approach to large investment projects has improved somewhat, we still have a long way to go and we must get these things right.”
The full council meeting was asked to agree that officials should produce a report on priorities for how money from the settlement should be spent.
But Tory group leader Iain Whyte accused the Labour administration of trying to divert attention from the finding of the council’s monitoring officer that it had been guilty of maladministration in failing to oversee the tram project properly.
He said: “We should not be deflecting from the fact that the tram project was maladministration - we're admitting that publicly for the first time.”
However, Labour council leader Jane Meagher rejected his claim. She said: “This council has long recognised that mistakes were made on the first tram project and we’ve apologised for these. And we’ve drawn on lessons from the original project and the findings of Lord Hardie’s inquiry to make key changes across the organisation.
“The successful delivery of the Trams to Newhaven project in 2023, which came in on time and on budget, clearly demonstrates that we’ve learned these lessons. Passenger numbers have grown year or year, reaching 12.5 million journeys in 2025, with last August setting a new monthly record of almost 1.5 million. One thing we will not apologise for, however, is building an effective tram system or our ambition to develop it further.