The amount of money spent on legal fees, litigation and defending claims by the board of the new national children’s hospital rose sharply from €2 million in 2023 to more than €6 million in 2024.
The rise in costs was driven by proceedings taken by construction company BAM against the hospital board under its contract, as well as an injunction that had been taken by a group of residents living near the new hospital site.
The new national children’s hospital is set to be the most expensive health infrastructure project in the State, with a final cost of at least €2.4 billion. The paediatric hospital has run over multiple budgets and deadlines, and there are fears it will not meet its July 2026 opening date – the 16th time since 2020 that its completion has been pushed back.
The hospital’s board said it is now defending €880m in claims.
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Relations between the National Paediatric Hospital Development Board (NPHDB) and BAM have publicly deteriorated in recent years. The hospital’s builders have claimed that design changes have affected their ability to finish the project, while the NPHDB has said that many parts of the hospital that BAM presented as completed still had snags.
The NPHDB financial statements for 2024, which were laid before the Oireachtas last week, said that by the end of April this year, the amount the board spent on professional fees for “litigation and claims defence” rose from €1.8 million in 2023 to €4.4 million in 2024. The fees for “legal expenses” also rose from €224,000 in 2023 to over €1.6 million in 2024.
The accounts noted that in 2024, €25,000 in legal fees went towards injunction proceedings brought by residents on O’Reilly Avenue near the hospital. It also pointed to a note on the contractor’s court proceedings.
BAM has initiated several legal proceedings against the NPHDB, and the 2024 accounts show four cases in which court proceedings initiated by the construction company resulted in the NPHDB being required, under its contract, to pay more than €160 million in a bond to BAM. This was funded directly from the Health Service Executive and then paid over to the company by the board.
The report indicated that these expenses have been treated as “payable rather than expense items as they are not a certified payment against the contract and so are not considered a legitimate project expense.
“In light of this, the amounts relating to these bonds are carried as balances due to the HSE as in the event that these payments are not certified against the contract the amounts will be repayable to the HSE.”
The financial statements noted that BAM had made 3,277 claims under its contract to either adjust the amount required to be paid for work or the date that the work is due to be completed by, and had provided supporting evidence for 2,902 of these claims.
By the time the financial statements were being prepared, these represented a total claim from BAM for an additional €850 million. Of the 2,902 substantiated claims, 2,223 have gone to a formal dispute process.
In a note in its financial statements, the NPHDB said it “disputes the validity of a large number of the Contractor’s claims, and specifically, where the adjustment sought is greater than the amount and/or extension of time, as determined by the [employer’s representative.] In such circumstances, it would not be appropriate to make an estimate of any liability arising from a decision, ultimately to be made by the High Court”.
It said that it is “committed to seeking a fair and equitable resolution of all disputed claims” to minimise the risk to the hospital project and finish it “on a timely basis”. NPHDB said there are “very substantial differences”. The hospital’s builders have claimed that design changes have affected their ability to finish the project, while the NPHDB has said that many parts of the hospital that BAM presented as completed on some claims still had snags.
A spokeswoman for the NPHDB said it is “actively defending claims issued to the Employer’s Representative (ER) in excess of €880m from BAM, including the duplication and triplication of claims”.
It said that there are a number of stages to a dispute: starting with an ER, which is then referred to a Standing Conciliator (SC) if it fails. The SC’s decision is binding if neither side disputes it. If it is disputed, the claim goes to legal proceedings, so that the dispute can be finally determined by the court.
“As it stands, claims are now at all levels of the dispute mechanism process, which involve the Employers Representative, Project Board, Conciliation, Adjudication, and the High Court,” the spokeswoman said.
“Costs incurred include the Standing Conciliator, the Adjudication process, and High Court Claims.”
BAM did not respond to requests for comment.
