Edinburgh trams: Council reaches out-of-court settlement in its case against law firm over original tram project
Council investigation into its own role in tram project finds ‘organisational incompetence’
Edinburgh council has reached an out-of-court settlement with international law firm DLA Piper over the legal advice it provided on the city’s long-delayed and over-budget tram project.
However, the council said under the terms of the agreement with DLA Piper it could not disclose details of the settlement.
The council was originally suing the company for £200 million for “negligent legal advice” provided to TIE, the council’s arms-length company in charge of the tram project.
The legal action was suspended while Lord Hardie carried out the public inquiry into the tram project, but resumed after Lord Hardie’s report was published in September 2023.
The case was due to go to court in March. But a report to next week’s full council meeting says: “The litigation against DLA Piper Scotland LLP was resolved out of court in March 2026.”
The report also reveals that an investigation by the council’s own monitoring officer into criticisms made by Lord Hardie found the council had been guilty of maladministration.
The finding was previously reported to councillors in private in December 2023 due to the ongoing legal proceedings, but has now been made public.
Lord Hardie’s report on the £776 million project blamed the council, TIE and the Scottish Government for a "litany of avoidable failures" which were responsible for the repeated delays and cost rises on the project.
The monitoring officer’s report said: “The deputy monitoring officer has reviewed the Edinburgh Tram Inquiry Report and agrees with Lord Hardie that the council failed in a number of important respects to properly oversee the project - this contributed to the project being delivered late, at an increased cost and with a restricted scope”.
It continued: “There were serious and systemic failings on the part of the Council which, overall, could be described as organisational incompetence.”
Council leader Jane Meagher said: "We’ve long recognised that mistakes were made on the first tram project and apologised for the impact this had on Edinburgh’s residents and businesses.
"As a result of this, we made significant changes to project management, governance and independent oversight across the organisation, drawing on lessons from the original project and the findings of Lord Hardie's inquiry.
"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 on year, reaching 12.5 million passenger journeys in 2025, and last August setting a new monthly record of almost 1.5 million.
“One thing we won't apologise for, however, is building a tram system, or our ambition to develop it further. Edinburgh is Scotland’s capital and economic powerhouse – the fastest growing city in the country, and recently overtaking London on GDP per head.
“Our success drives Scotland’s success and a modern, reliable public transport infrastructure is fundamental to sustaining that growth. That's why I will be writing to the new Scottish Government to remind them of the significant benefits a new North-South tram line would bring - not only to Edinburgh and our communities, but to the wider region and to Scotland as a whole."
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