Edinburgh council reaches settlement after suing tram law firm

The City of Edinburgh Council has settled its multi-million pound damages claim against a law firm that advised it over the first tram project.

The local authority was seeking more than £200m in compensation, claiming DLA Piper failed to give adequate warnings that the price of the tram line would escalate.

But under the terms of the agreement with DLA Piper, the council said it could not disclose details of the settlement.

The first tram project from the city centre to the airport went over budget by £400m and was delivered five years late.

The settlement was made ahead of a hearing at the Court of Session.

A report set to go in front of a full council meeting on Thursday said: "The litigation against DLA Piper Scotland LLP was resolved out of court in March 2026."

DLA Piper have been approached for comment.

The report also revealed the results of an investigation by the council's own monitoring officer into criticisms made by Lord Hardie in his tram inquiry report.

The £13m inquiry concluded in 2023 that failings by the City of Edinburgh Council and its arms-length companies were to blame for the delays in the tram project.

Now the council's monitoring officer has said that the local authority was guilty of maladministration.

This was reported to councillors in private in December 2023 due to the ongoing legal proceedings, but it has now been made public.

The 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."

The report said the deputy monitoring officer believed "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."

She added: "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 [Gross Domestic Product] per head.

"Our success drives Scotland's success and a modern, reliable public transport infrastructure is fundamental to sustaining that growth."

Meagher said she would be writing to the new Scottish government to "remind them of the significant benefits" a new North-South tram line would bring.