1 Wednesday, 22 November 2017 1 CHAIR OF THE INQUIRY: Mr Lake. 2 MR LAKE: Good afternoon, my Lord. The first witness this 3 afternoon is Sharon Fitzgerald. 4 DR SHARON FITZGERALD (affirmed) 5 CHAIR OF THE INQUIRY: You are going to be asked questions 6 initially at least by Counsel to the Inquiry, Mr Lake. 7 If you just listen to the question and answer it as 8 directly as possible. 9 If you also speak into the microphone so everyone 10 can hear what you're saying, and speak at a measured 11 pace so the shorthand writers can keep up with you. 12 A. Okay, thank you. 13 Examination by MR LAKE 14 MR LAKE: Could you state your full name, please. 15 A. My full name is Sharon Lesley Fitzgerald. 16 Q. I would like you to look at a document, please. It will 17 be on the screen. There's also a hard copy in front of 18 you. It's TRI00000036_C. 19 A. I can see the document. 20 Q. It should be the same document you have in hard copy and 21 then on the screen? 22 A. Yes. 23 Q. If you look at the hard copy, you should see that on the 24 last page of it, it has your signature. 25 A. Yes. 127 1 Q. Is that the question and answer sheet that you prepared 2 for the purposes of this Inquiry? 3 A. It is. 4 Q. Are you content that it be adopted as your evidence for 5 the purposes of this Inquiry? 6 A. Yes, I am. 7 Q. I would like to ask you a few questions of clarification 8 about the contents of that. If we could, please, look 9 first at page 6 of this. 10 If you could look at the lower half of the page on 11 screen? 12 A. Yes. 13 Q. The paragraph that's at the top of the screen begins: 14 "TIE was staffed by ..." 15 Then you give a number of details of the employees 16 it had? 17 A. Yes. 18 Q. Including people who had been previously at the Council? 19 A. Yes. 20 Q. You then go on to note that CEC had the legislative 21 powers for the project. CEC was using tie to assist it 22 in the delivery of those legislative powers. 23 "The funding from the Scottish Government came 24 through CEC." 25 A. Yes. 128 1 Q. "CEC was using its specially created entity (TIE) to 2 deliver the project. 3 For both myself and DLA, what we saw was that TIE 4 and CEC effectively had aligned interests in terms of 5 the delivery of the project. TIE was instructing us but 6 in turn TIE was being controlled by CEC. That is how we 7 became comfortable with that relationship." 8 It's in particular that last paragraph I would like 9 to ask you about. 10 Is it the preceding parts of this answer that led 11 you to the view that the Council and tie had aligned 12 interests? 13 A. It was more than just those paragraphs. 14 Q. What was it? 15 A. It was to do with the fact that CEC had created tie as 16 its wholly owned and controlled special purpose vehicle 17 for the purposes of delivering the tram project as well 18 as other projects involving City of Edinburgh Council. 19 Q. So that's referring to the fact it's a wholly owned 20 subsidiary? 21 A. Yes. 22 Q. That would obviously give the Council a measure of 23 control over the company? 24 A. Yes. 25 Q. But not total control over all the activities of the 129 1 company? 2 A. I would be concerned from a procurement perspective if 3 there was any element of what tie was doing that wasn't 4 being controlled by the Council. And this is where 5 I refer to -- I would refer to the Teckal case. 6 Q. You have referred to that in an answer to your 7 statement? 8 A. I have. 9 Q. If we -- go on to page 8, please. 10 I should say, for context, I should probably go to 11 page 7, just to identify the question. 12 At the foot of the page, the question that was posed 13 was: 14 "Was the effect of the second letter above ..." 15 That's an instruction letter to DLA from -- a letter 16 from DLA to the Council and tie: 17 "... that you proceeded on the assumption that the 18 interests of CEC were the same as those of tie at all 19 times? Did you at any time have any concerns that the 20 interests of tie and CEC may not be the same?" 21 If we go over the page to see your answer, you say: 22 "Yes, it had always been our assumption that the 23 interests of CEC were the same as those of tie at all 24 times. It had always been our assumption that we were 25 acting on this basis. That was for all of the reasons 130 1 which I have given earlier in terms of the relationship 2 between tie and CEC, ie parent and subsidiary. tie were 3 delivering the project on behalf of CEC. CEC had the 4 funding and the legislative powers which its delivery 5 company was assisting with. 6 I did not, at any time, have any concerns that the 7 interests of tie and CEC may not be the same. As far as 8 I was concerned, the relationship between tie and CEC, 9 as I understood it, was governed by the operating 10 agreement that they had between them and the governance 11 arrangements of the tie and TEL Boards." 12 If I could just pause there, am I correct in 13 understanding this as adding in other reasons why you 14 considered their interests were aligned, that is the 15 Operating Agreement and the fact that CEC had the 16 funding? 17 A. I think I had mentioned funding in the previous answer, 18 because in everything that tie was doing, it was funded 19 by the Council in terms of the tram project. 20 So if you were rendering an invoice to tie for our 21 legal services, that invoice in turn was paid by CEC. 22 tie didn't have its own funds. 23 But in terms of the Operating Agreement, I had 24 understood that to be the means by which parent and 25 subsidiary would operate together in terms of the 131 1 project. 2 Q. None of these things, an Operating Agreement, funding, 3 or sole ownership of the shares, could prevent the 4 management of a subsidiary starting to act in a way that 5 was contrary to the interests of the parents. Would you 6 accept that? 7 A. That's a possibility, yes. 8 Q. So in terms of the decisions being taken by the 9 management, and things that they pursued, was it 10 something you had an eye to, that it was possible that 11 the interests might diverge and conflicts might arise? 12 A. In all of the work that I did on the project, I didn't 13 see any examples of that. 14 For most of the time I was involved, there was very 15 little involvement of the Council, and we were of course 16 acting in accordance with the legal services agreement 17 that we had in place with tie, which had been the 18 subject of a public procurement in 2002, and we were 19 latterly then also acting in accordance with our duty of 20 care letter. 21 Q. You've mentioned acting in accordance with your 22 agreement with tie there. That's something that's 23 raised on page 7. If I could just go back to that, 24 please. 25 A. Yes. 132 1 Q. If we enlarge the centre of the page, look at 2 subparagraph (b) and the answer to that. (b) is: 3 "Were there ever occasions where DLA thought it 4 appropriate to raise matters with CEC directly, or 5 ensure that matters were brought to their attention?" 6 The response you have given is: 7 "There weren't ever any occasions where I thought it 8 was appropriate to raise matters with CEC directly or 9 ensure that matters were brought to their attention. 10 This was because I acted in accordance with the contract 11 with TIE and our duty of care letter. It wouldn't have 12 been appropriate for me to be acting in any way other 13 than in accordance with the protocol that had been 14 agreed with TIE." 15 Now, why is it that acting in accordance with the 16 contract with tie would mean that it was not appropriate 17 to raise the matter with the Council? 18 A. Because my -- my contract, my appointment, our 19 appointment as DLA, was with the -- was with tie. So it 20 would be very unusual to then be raising any issues 21 outside of that contractual relationship with another 22 party. 23 So inasmuch as those parties were related, our 24 reporting line was to tie. 25 Q. Were you made aware by Mr Fitchie that one of the 133 1 letters he had prepared to describe the relationship 2 between tie and other parties, described both the 3 Council and tie as joint clients of the firm? 4 A. Yes. 5 Q. Were you aware of that? 6 A. Yes, I'm aware of that letter. It was presented as part 7 of the evidence that was given to me. 8 Q. Were you aware of it in 2007? 9 A. I was aware of it in 2007, and I think that was back end 10 of 2007. 11 Q. Now, if both the Council and tie were joint clients, if 12 you felt the interests of one of the clients, the 13 Council, was to be disadvantaged, the mere fact you were 14 acting in accordance with the contract with the other 15 client wouldn't absolve you from a responsibility to 16 give notification, would it? 17 A. You will remember from that particular duty of care 18 letter that the duty of care and the joint client status 19 was expressed as being subject to various conditions 20 which are expressed in the letter. 21 It was really quite an unusual situation to have 22 been appointed by tie to carry out legal services in 23 2002, to be asked in 2005 to give a duty of care letter 24 that referred to the Council, and then in 2007 to be 25 giving a further letter. 134 1 That would have been nearly five years into our 2 relationship with tie, and of working on the project, 3 and you'll be aware from the letter that the letter of 4 course referred to the duty of care and the joint client 5 status as being retrospective back to December 2003. 6 So in terms of what we could commit -- excuse me -- 7 commit to in the terms of that letter, it was caveated 8 by the conditions that we expressed in the letter 9 itself. 10 Q. There was a condition that you would be entitled to 11 accept instructions from tie, and assume that those took 12 account of the interests of both parties? 13 A. I would like, if possible, to see the letter. 14 Q. Of course. Can we have on screen document CEC01711055. 15 There was a covering email, and I can provide that, 16 if you would find it of assistance to see the covering 17 email. But this was the attachment, said to be a draft 18 of a letter that Mr Fitchie proposed sending to the 19 Council to affirm our duty of care and the joint client 20 status. 21 Because it was a draft, that explains why it's 22 undated. 23 A. Yes. 24 Q. We can see in the third paragraph of the letter that: 25 "This letter reconfirms that as from 5 December 2003 135 1 onwards, DLA Piper Scotland LLP has owed and owes the 2 same contractual duty of care to CEC as owed to tie Limited 3 pursuant to clause G.3.1(a) of the General Conditions 4 governing the Appointment." 5 Just pausing there, that, as you have already noted, 6 was backdated to December 2003, an unusual situation? 7 A. Yes. 8 Q. It goes on to say: 9 "We acknowledge CEC as joint client with tie Limited on 10 the basis that ..." 11 There's really no doubt, at least from this time, 12 that CEC regarded as a client along with tie; is that 13 your understanding? 14 A. Sorry, could you repeat that. 15 Q. There's no doubt that at least from this time onward, 16 CEC were regarded as a client jointly with tie? 17 A. I think the -- this was certainly the position that was 18 expressed in a draft letter. 19 Q. Did you understand the position in reality to be 20 different? 21 A. I understood the position to be as expressed in the 22 letter, but subject to the paragraphs below. 23 Q. Looking at the first of those paragraphs, you say -- the 24 letter continues, on the basis that, and the first 25 numbered paragraph is: 136 1 "DLA Piper's primary responsibility has been to 2 advise tie Limited and DLA Piper may at all times and for 3 all purposes rely upon tie's instructions given to us 4 under the appointment as being identical to CEC's 5 instructions as if emanating from CEC itself and as 6 taking into account CEC's requirements, objectives and 7 best interests." 8 So that simplifies the question of who gives the 9 instructions so you don't end up with anything 10 conflicting? 11 A. Correct, and that had been the position that DLA had 12 been acting on for the previous five years. 13 Q. Then to note the further condition, paragraph 2: 14 "DLA Piper remains expressly authorised to receive 15 and seek all instructions (and any clarifications) under 16 the appointment from tie as Project manager and agent 17 for CEC. In the absence of specific written 18 instruction, DLA Piper has not been and is not under 19 obligation to advise CEC officers or members directly, 20 under exception that DLA Piper will brief CEC officers 21 at regular intervals as instructed by tie Limited, or as 22 required by CEC." 23 So it was open to CEC as a joint client to require 24 briefings from tie -- pardon me, from DLA; is that 25 correct? 137 1 A. Yes. 2 Q. The third paragraph enables DLA Piper to rely upon 3 expressions of satisfaction and presumptions arising out 4 of approval of the work being given by the Council, in 5 short? 6 A. Yes. 7 Q. 4 deals with the fact that the contractor duty of care 8 may not be assigned, and 5 deals with reciprocal 9 warranties, which I think is not something we are 10 concerned with here. In as much as we have 11 a restriction that DLA are entitled to rely on 12 instructions from tie as representing those of the 13 Council, that doesn't really deal with the question of 14 whether or not -- what DLA would be bound to do in the 15 event that DLA became concerned that there was 16 a conflict. Do you understand the difference? 17 A. I'm not sure that I follow you, Mr Lake. 18 Q. Put it this way. Even standing the terms of this 19 letter, if DLA became aware of a conflict between the 20 Council and tie, they wouldn't be entitled to ignore it? 21 A. And I have commented that indeed it would be my 22 professional responsibility to be reporting a conflict 23 if I became aware of such a conflict. 24 Q. We have finished with that document now. I just want to 25 ask you about the period in which tie decided not to use 138 1 the services of DLA in 2007. 2 A. Yes. 3 Q. Were you made aware why that had happened? 4 A. At the time it was explained to us as being a question 5 of cost, and tie wanting to create its own in-house 6 legal function. 7 So that -- that was what we were -- we were told in 8 terms of at that point. Whether that was entirely the 9 position, I don't know. 10 Q. Did you get that information direct from people within 11 tie or did that come via Mr Fitchie? 12 A. I think that came from -- from Andrew, rather than from 13 anyone at tie. 14 Q. Did Mr Fitchie make you aware who within tie was the 15 originator of this policy that DLA would be stood down? 16 A. I don't remember Andrew saying, but, you know, it would 17 be someone, I anticipate, like Willie, but that would be 18 speculation on my part. I don't know for sure. 19 Q. Now, when DLA were re-engaged, we have heard that 20 Mr Fitchie was taken on secondment? 21 A. Yes. 22 Q. I think he had been the partner, the lead partner on the 23 project. I take it he would be the partner to whom you 24 would have reported? 25 A. Yes, that's correct. 139 1 Q. What difference did it make when he went on secondment 2 to tie? 3 A. From -- for me, personally, Andrew was still the lead 4 partner for that -- for tie. He remained throughout 5 a partner of DLA Piper. 6 So from my perspective, Andrew was exclusively or 7 almost exclusively engaged for tie rather than working 8 for other clients. He was still in the office, although 9 did spend a lot of his time in tie's offices. 10 So I didn't see a legal distinction in terms of 11 Andrew before and after secondment. 12 Q. Putting the question very directly, from your point of 13 view, had he moved from adviser side to client side? 14 A. No. 15 Q. I want to turn now to the question of the procurement 16 strategy, and if you could go to page 28 of your 17 statement. There's question about the lessons that had 18 been learned from the Holyrood project. If we look at 19 the top of the page at part of your answer to this, you 20 say: 21 "A number of elements of the procurement strategy 22 for the tram project were developed on the basis of what 23 was said in that NAO report. This was where the 24 Partnerships UK team was effective. They brought 25 forward their experience of what was regarded as UK best 140 1 practice. Also, Andrew, at that time, had been involved 2 in another tram scheme in the UK. We further had the 3 experience of our Leeds team. We were building in 4 lessons from other tram schemes. The lessons we built 5 in, were, in essence, different to Holyrood because they 6 were all about the execution of tram schemes and the 7 construction of transport projects with interfaces 8 between vehicles and rail. Holyrood was different in 9 that it was an accommodation project." 10 I just want to ask you initially about the opening 11 words of that: 12 "A number of elements of the procurement strategy 13 for the tram project were developed on the basis of what 14 was said in that NAO report." 15 Can you recall what were the particular elements 16 that were based on the NAO report? 17 A. Okay, so the NAO reports, that's the National Audit 18 Office report, and it had summarised the experience of 19 different light rail projects in the UK. And so 20 examples of some of the recommendations of the report 21 referred to early operator involvement, early design and 22 also moving of the -- doing utilities diversions in 23 advance of the main construction contract being let. 24 Q. Further through that paragraph, just below the halfway 25 line, you said: 141 1 "We were building in lessons from other tram 2 schemes." 3 A. Yes. 4 Q. Can you identify and recall what other lessons you were 5 building in? 6 A. Similar to the National Audit Office report -- I'm 7 trying to think now of what I was meaning, but I think 8 the key thing that we'd learned from our other 9 colleagues was in terms of how risk was to be packaged 10 on the tram contracts. These weren't heavy rail 11 contracts. They were light rail schemes being procured 12 in an urban environment. So it was important to be 13 thinking about how risk would be managed in terms of the 14 construction works and the impact on the city during 15 those construction works. 16 I remember another issue was in relation to the 17 treatment of fare box revenue in the context of the 18 operator contract. 19 So apologies, I can't remember any more than that, 20 but we did have quite close contact with our Head of UK 21 Transport at the time, Nick Painter, and Nick had been 22 involved in projects such as Nottingham Tram Scheme, and 23 also the Sheffield Project as well, and then, as you 24 will know, we involved our colleague Iain Bowler in 25 terms of the vehicle procurement. 142 1 Q. Just, when you refer to vehicle procurement at the end, 2 you'd earlier referred to lessons that were learned in 3 relation to the tram contract, and I want to be clear, 4 was that the contract for the vehicles or the contract 5 for the engineering and infrastructure works? In 6 relation to which the risk -- 7 A. I suppose that's the interesting thing about the tram 8 projects, is that they involve elements of construction 9 and vehicles and operation. So a number of the schemes 10 in the UK had been PPP schemes. So they'd been 11 structured differently to how Edinburgh was ultimately 12 structured in terms of financing. 13 Q. You said at the start of your answer: 14 "... the key thing that we'd learned from our other 15 colleagues was in terms of how risk was to be packaged 16 on the tram contracts." 17 A. Yes. 18 Q. Was that all tram contracts or specifically the ones for 19 the vehicles? 20 A. Apologies. Loose language on my part, but by the tram 21 scheme, I'm meaning the full train set, so to speak, the 22 full tram set. So it's the interaction of all of these 23 contracts. 24 Q. Can you summarise for us what was the risk that had to 25 be learned about the way risk was packaged? 143 1 A. I think it was packaging it in such a way that the -- 2 risk for the public sector associated with the project 3 was being managed by the correct party in the contracts. 4 So in other words, there wasn't inappropriate passing of 5 risk to a private sector party who was bidding the 6 contract, and that on the basis that that private sector 7 party may in the first place be put off from bidding for 8 the project because the risk transfer was wrong, or if 9 they accepted the risk transfer, it could result in an 10 expensive, unaffordable contract. 11 So it was risk at its broadest sense in terms of the 12 impact that it would have on bidders, the impact on 13 pricing, and you might also say the impact on delivering 14 a successful project. 15 Q. Were you involved in discussions as to how risk should 16 be allocated under the infrastructure contract? 17 A. Yes, I was involved in some of those early sessions. So 18 I joined DLA in 2003, so that was just after the 19 pre-qualification stage for the Transdev operator 20 procurement, and at that stage there were discussions 21 ongoing in terms of procurement strategy for the Infraco 22 contract. 23 Q. What was your understanding as to the general approach 24 of how risk would be allocated under the infrastructure 25 contract? 144 1 A. The -- I remember being involved with colleagues from 2 Mott MacDonald, Faber Maunsell, now AECOM, tie, 3 Grant Thornton. We were looking at different models of 4 how the infrastructure contract could be procured, 5 and I do remember quite distinctly building in some of 6 the lessons that we all had, plus the PUK experience, 7 NAO report experience. 8 You will see this expression referred to in a number 9 of the documents in the project but it was trying to, to 10 some extent, to an appropriate extent, de-risk the 11 infrastructure contract by doing some of the utilities 12 works early, and by doing some of the design and 13 consents process early. 14 So there had been a view from the various reports 15 and a view from the team that on some of the PPP 16 schemes, there had been too much focus placed on all 17 risk going to the infrastructure contract. 18 Q. Now, in terms of those discussions about allocation of 19 risk and the risk strategy, you were clearly involved -- 20 Mr Fitchie and any other colleagues at DLA? 21 A. I think to some extent Iain would have been involved, 22 but I remember mainly it was Andrew and I attending 23 these sessions. 24 Q. You mentioned Partnerships UK. Were they attending 25 those sessions, providing assistance? 145 1 A. Yes. It was Martin Buck and James Papps. So we found, 2 certainly I think as a team, the experience of PUK, who 3 had been involved in a number of the projects, to be 4 invaluable in terms of informing lessons learned from 5 other schemes. 6 Q. Who was attending from tie? 7 A. At the -- in the early stages it would have been -- 8 mainly I can remember Alec Macaulay being there, and 9 also Lindsay Murphy, who was an ex Edinburgh Council 10 employee, and then latterly, as the strategy developed, 11 the tie representative was Ian Kendall. 12 Q. Dealing with this question of design risk, could I ask 13 you to look on in your statement, please, to page 35. 14 There's a question in -- if we look at the top of 15 the page, in subparagraph (a): 16 "Do you consider that the objectives of the 17 procurement strategy were met, including, in particular, 18 obtaining a fixed price INFRACO contract and 19 transferring design risk to the private sector?" 20 You respond by saying: 21 "I was not involved in the final negotiation of the 22 INFRACO contract. However, I understand from speaking 23 with Andrew Fitchie at the time that, the objective of 24 obtaining a fixed price INFRACO contract which 25 transferred design risk to the private sector was not 146 1 fully realised." 2 Now, when you say "at the time", what time are you 3 referring to? 4 A. I'm -- I'm speaking about when Andrew was negotiating 5 these contracts. So inasmuch as I wasn't involved in 6 the -- shall we say the front line activities on the 7 Infraco contract, I was still working on certain 8 schedules within the Infraco contract, also involved in 9 MUDFA. 10 So Andrew and I were speaking regularly about this 11 project, but then also about other day-to-day business 12 associated with the -- with our team in Edinburgh. 13 Q. So this would be prior to signature of the contract? 14 A. Yes. 15 Q. Did he say in what way he considered that the objective 16 had not fully been realised? 17 A. Yes. 18 Q. In what way had it not been realised? 19 A. It hadn't been realised -- and this is where I'm just 20 reporting what I was told by Andrew at the time, because 21 he had explained that a commercial deal had been done at 22 Wiesbaden, and the impact of the Wiesbaden deal was to 23 unpick various elements of the procurement strategy 24 which everyone had been working towards delivering for 25 a number of years. 147 1 So specifically, the fixed price element had 2 basically been eroded by the commercial deal that had 3 been struck. 4 Q. Did he say anything to you about whether or not design 5 risk had effectively been transferred? 6 A. That was -- that was what I understood to be the 7 Wiesbaden -- part of the Wiesbaden deal, was that the 8 Infraco contractor wasn't fully accepting design risk 9 post novation of Parsons Brinckerhoff. 10 So the way in which the procurement strategy had 11 been devised and the SDS contract had been devised was 12 that the Infraco bidders would be able to do -- carry 13 out due diligence on the design as a means of informing 14 their pricing, so that at the point of novation, the 15 Infraco contractor was presenting a fixed price because 16 he was aware of the design that had already been carried 17 out in respect of the contract -- in respect of the 18 project. 19 So what I understood from speaking to Andrew was 20 that there had been various caveats which had been 21 included in the Wiesbaden deal, which meant that if 22 there were changes to the design, then those would not 23 be changes that the Infraco contractor would bear. 24 Those would be changes that the client, tie, would need 25 to pay for. 148 1 Q. So if I've understood you correctly -- do correct me if 2 I am wrong -- the effect of that would be if there were 3 design changes, they would at least to an extent be at 4 the -- the cost of constructing according to the change 5 design would be at the expense of tie, rather than the 6 contractor? 7 A. Yes. That's correct. 8 Q. Were you aware at that time what the state of the design 9 was in general? 10 A. It was -- I knew from conversations with Andrew and also 11 from the contact that I had with the MUDFA team that 12 there were still delays in the -- there had been delays 13 in the design, and so I don't know at this point what 14 state the design was in, but I knew that the delay in 15 the design had had an impact, in terms of how the 16 Infraco contract was panning out in terms of risk. 17 Q. In terms of what you were saying was reported to you, 18 and I appreciate you weren't directly involved in the 19 negotiations, but what was reported to you, the price 20 was not wholly fixed, and bits of the design risk 21 remained with tie. 22 Now, both of those elements seem to be quite at odds 23 with the procurement strategy which had been hatched 24 several years before. Was that fair comment? 25 A. Yes. 149 1 Q. Now, in that tie were proposing to conclude a contract 2 on a basis which departed from the contract strategy, 3 was that not something that engaged the duty to notify 4 the Council that the interests were no longer aligned? 5 A. I understood from speaking with Andrew at the time that 6 those risks were being reflected in the documentation 7 that was being provided to the Council. So, for 8 example, the risk matrices. So my preparation for 9 today, I have looked at some of the letters that the 10 Inquiry has given to me, and I can see that in respect 11 of changes, that those changes are identified as -- 12 I can't remember -- apologies, I can't remember the 13 terminology now, but it's not a regular client change. 14 I don't know if it's a mandatory change -- 15 Q. A notified -- oh yes. 16 A. There's Notified Departures and mandatory changes, but 17 I saw those as being public sector risk under the risk 18 matrix, whereas under the original procurement strategy, 19 I wouldn't have expected any category of change other 20 than a genuine client change, rather than a -- this 21 seemed to be a different division of change arising out 22 of the position on the design. 23 Q. When you refer to -- you have looked at letters, were 24 these the advice letters provided by DLA at contract 25 close? That you're referring to? 150 1 A. Yes, I think these were the letters which were written 2 to Gill Lindsay. So there was a whole series of those 3 letters. 4 Q. Perhaps just to make it easier, if I could ask you to 5 look at document CEC01033532. 6 What we can see on screen now is the letter dated 7 12 May 2008. It runs from the firm, DLA Piper Scotland 8 LLP, and it goes to Gill Lindsay and Willie Gallagher. 9 Is that one of the letters you are referring to? 10 A. Yes. If that's one of the -- forgive me, I have been 11 looking at so much material. I saw a risk matrix which 12 I don't know if that was part of this bundle or if it 13 was part of another bundle. 14 Q. If I could ask you -- 15 A. Some information that Andrew had prepared, I think, at 16 the time. 17 Q. Just to check, look at CEC01347795. 18 You see this is a document with the DLA Piper 19 heading, titled "CONTRACTUAL ALLOCATION OF RISKS IN THE 20 DRAFT INFRACO CONTRACT As at 12 May 2008"? 21 A. Mm-hm. 22 Q. Is that the document, do you think, you're referring to? 23 A. If the risk transfer is shown in the way that I remember 24 it being, then this is the correct version of the -- of 25 the document. So forgive me. I can't remember if 151 1 it's -- if it's this particular version. 2 Q. You can accept from me, that as far as I'm aware, this 3 one dated 12 May, the day before the contract signature, 4 was the last available. But is this the form of the 5 document you are referring to? 6 A. Yes. 7 Q. Just a question of the version? 8 A. Yes. 9 Q. When you refer to the particular entries reflecting the 10 state of affairs, were there particular entries within 11 the table that were of concern to you in giving notice 12 to the Council of the question of price and transfer of 13 risk? 14 A. I haven't analysed the table from that perspective. I'm 15 very happy to do that in terms of each of the risks, but 16 for me, the big change was how design was to be treated 17 in the context of Parsons Brinckerhoff post novation. 18 So I haven't gone through each of the risks to 19 assess commercial impact. 20 Q. I won't ask you to do that just now. 21 A. I would be very happy to. 22 MR LAKE: I think we might consider whether that is 23 something we can ask you to do afterwards, rather than 24 sitting in a hearing context. 25 I have no further questions now, my Lord. 152 1 Questions by CHAIR OF THE INQUIRY 2 CHAIR OF THE INQUIRY: Could I ask about the representing 3 both tie and CEC. You didn't see any difficulty with 4 that, but there came a point where the Chief Executive 5 of CEC had to be satisfied with the contract that he was 6 going to authorise tie to sign. And he had to be 7 satisfied that it met various conditions of the Council. 8 Did you think that when you were acting for tie, it 9 would be sufficient for you also to say to 10 Edinburgh: it's all right to sign it. Did you think 11 that would be all right or did you think Edinburgh, 12 given that the Chief Executive had a separate 13 responsibility towards the Council, should have had 14 separate advice? 15 A. On terms of when we were appointed, it was 2002, and 16 what I found strange, my Lord, as I was saying earlier, 17 was the fact that in 2007, bearing in mind that there 18 had already been signatures of other high value 19 contracts, that this seemed to have been the first 20 instance where the Council was actually addressing the 21 fact that: perhaps we should have had independent 22 advice. 23 So what I would say is that we acted in accordance 24 with how we had been originally appointed, and we 25 extended -- I say extended -- that original appointment 153 1 by the duty of care letter which we entered into in 2 2005. 3 So as far as DLA were concerned, we weren't engaged 4 to be advising both tie and the Council. 5 When I've worked on other infrastructure projects, 6 it's been set out from the very start in terms of how 7 clients want to operate. So when I've worked with other 8 local authorities in Scotland, I worked side by side 9 with the Council's in-house team, and their function was 10 to be advising Council officers and members as to the 11 terms of what was being entered into. 12 When I've worked on projects such as 13 Queensferry Crossing, Scottish Government Legal 14 Directorate, they were quite happy to have that 15 advice -- the legal advice outsourced to DLA Piper. And 16 so I was reporting in that instance to officers within 17 Transport Scotland and to the Transport Scotland Board. 18 So I was very surprised when I've been shown some of 19 the correspondence by the Inquiry that there's been all 20 this sort of discussion behind the scenes in terms of 21 independent legal advice. This seems like an unusual 22 structure, et cetera, when I'm thinking: well, why 23 didn't someone address that within the Council when tie 24 was actually being set up? 25 So it's -- for me, it's just a very odd state of 154 1 affairs, as I say, five years into the project, that 2 we're suddenly seeing correspondence as we did on this 3 project. From our perspective at DLA, we were trying to 4 be helpful to both tie and the Council in terms of 5 signing the duty of care letter and, as we were 6 requested, providing reports to -- to, for example, 7 Gill Lindsay. 8 CHAIR OF THE INQUIRY: I can understand what you're saying, 9 but I think you mentioned that sometimes you had worked 10 in the public sector where the local authority in-house 11 lawyers or solicitors would take a view about the 12 documents as well and represent the local authority's 13 interests, as one might have expected somebody would 14 give the Chief Executive here advice from, say, the 15 Local Authority Legal Department. 16 But in the context of this contract, did you get any 17 impression as to whether the Local Authority Legal 18 Department were in fact reviewing the contract with 19 a view to deciding whether it complied with the 20 Council's instructions? 21 A. I suppose I don't -- being honest, my Lord, I don't know 22 what was happening behind the scenes in terms of what 23 was being done with the reports that we were giving. 24 I would have assumed that there would have been internal 25 briefing going on between the Council team and the -- 155 1 the senior officials in the Council. 2 CHAIR OF THE INQUIRY: I think the other thing that you 3 mentioned was when you were de-risking the -- or the 4 strategy was to de-risk the infrastructure contract by 5 doing some of the utility works and some of the design 6 and consents process early. 7 Did that strategy change? 8 A. In the time that I was involved in the project, my Lord, 9 the strategy was re-examined many times, and, you know, 10 at the point at which I wasn't involved day-to-day, that 11 still was the strategy. 12 From my perspective, I think the issue really was 13 that the strategy wasn't being administered in terms of 14 how the contracts were actually working in practice. So 15 there may have been a point where there should have been 16 some change in strategy, but I was always concerned that 17 any time when that was being proposed, that generally 18 what was coming through was a change that was actually 19 making the risk position worse for the public sector. 20 So -- but it's difficult for me to say because my 21 day-to-day in Infraco ended at the point really when 22 there were two bidders still in the competition. 23 CHAIR OF THE INQUIRY: When you say it wasn't being managed 24 properly, is that by tie or by someone else? 25 A. In my opinion, by -- by tie. Not everyone at tie, but 156 1 there were certain elements of certain contracts that 2 weren't being managed. 3 CHAIR OF THE INQUIRY: Can you give detail of that? Which 4 elements? 5 A. I would say particularly the design and the delivery of 6 the design, and, you know, from my perspective, at the 7 time we'd appointed or -- I say we, I beg your pardon -- 8 tie had appointed Parsons Brinckerhoff, they'd also 9 appointed Scott Wilson and Turner & Townsend to be 10 technical advisers. And so what perplexed me is that 11 after having gone to the length of procuring separate 12 technical advisers, those technical advisers weren't 13 involved consistently through the process to actually 14 support tie. 15 So instead there seemed to be just use of TSS, Scott 16 Wilson, Turner & Townsend, on more discrete items, and 17 then there were a number of different consultants who 18 came in, did small parts on -- on the job. Some of 19 those people weren't involved in the project for very 20 long. But there was no -- in my opinion, no consistency 21 of personnel managing the contracts. 22 So MUDFA, for example, the team that was involved in 23 the MUDFA procurement from tie, they -- they pretty much 24 left not long after the project -- the contract was 25 signed. 157 1 So it meant that there was no one who understands -- 2 who -- I beg your pardon, who understood how the 3 contract should operate actually being there and 4 thinking: okay, design is important, we need to make 5 sure the design is provided in time, we've agreed with 6 the utilities to do -- there was no -- from my 7 perspective, no continuity; and we did offer contract 8 training to the people who were administering the 9 contract, but for whatever reason, that wasn't taken up. 10 And whilst I did work with John Casserly, who was the 11 Commercial Director, very closely, John was one person 12 trying to manage what was in effect a very complex 13 contract, with very -- it felt like very little support. 14 CHAIR OF THE INQUIRY: Thank you very much. I don't think 15 there were any questions from anyone else. 16 Thank you very much. 17 MR MARTIN: My Lord, sorry, I do have questions in line with 18 the statement -- 19 CHAIR OF THE INQUIRY: Sorry, Mr Martin. 20 MR MARTIN: Not at all. I wonder if I could, just in line 21 with the application that I have made. 22 Examination by MR MARTIN 23 MR MARTIN: Dr Fitzgerald, could I direct you to page 17 of 24 your witness statement, please. 25 In the middle of that page, I don't think I need to 158 1 ask you about the question, you make the statement: 2 "I understood that fixed price was important to tie 3 and CEC because the project needed to be affordable. It 4 needed to represent value for money." 5 Now, at what point in time did you have that 6 understanding? 7 A. This was the -- the point at time -- in time when I was 8 involved in drafting and negotiating the Infraco 9 contract. 10 Q. Thank you. 11 Now, you identified there that it was important both 12 to tie and to CEC who, as you've discussed with my 13 learned friend, Mr Lake, were both clients of DLA. 14 A. I don't believe I did discuss that with Mr Lake. 15 I think the client of DLA was tie, and there was a draft 16 letter which we discussed earlier where it was proposed 17 that tie and CEC or DLA would treat tie and CEC as joint 18 client on the basis of the conditions expressed in that 19 letter. 20 Q. Were they each clients? 21 A. Not -- not as far as DLA were concerned. 22 Q. So which of the two was the client? 23 A. The client was tie, and we -- we had offered in our 24 letter of 2005 to owe a duty of care to the Council, and 25 in the draft from 2007, we had said that tie and CEC 159 1 would be joint client on the basis expressed in that 2 letter. 3 Q. I don't want to take time on this, but do you accept 4 that DLA owed a duty of care both to tie and to the 5 Council? 6 A. On the basis -- on the basis that we had signed up to in 7 2005. 8 Q. Yes. And obviously that was the situation as one got 9 closer to the finalisation and the ultimate execution of 10 the Infraco contract at the end of 2007? 11 A. That was a point that, whilst I was involved in other 12 tram business, I wasn't day-to-day on the front line 13 Infraco negotiations and the interface that Andrew was 14 having, for example, with Gill Lindsay of the Council. 15 Q. All right. Now, in your statement you have said that 16 the fixed price was important to tie and CEC. Who did 17 you understand to be the ultimate paymaster of the 18 project? 19 A. The ultimate paymaster was the Scottish Ministers, 20 with -- Scottish Ministers in terms of the grant that 21 was being made to City of Edinburgh Council. City of 22 Edinburgh Council, I believe, were making a contribution 23 to that grant, and it was a combination of the two 24 sources of funding that were being used to -- 25 effectively to pay for the -- pay the Infraco 160 1 contractor. 2 Q. So tie was not actually paying any of its own money? 3 A. Correct. 4 Q. The Scottish Ministers, Transport Scotland, and the 5 Council were actually paying for the project? 6 A. Yes, that had always been the basis on which the project 7 had been set up. 8 Q. So between tie and the Council, only the Council had an 9 ultimate financial responsibility for the project, 10 because, as we know, under the guarantee arrangements 11 that were executed, tie carried out the contract, but 12 the Council paid, as you say, along with a grant from 13 Transport Scotland? 14 A. Yes, and I have not seen the terms of that guarantee 15 from CEC, but I understand that's how it was structured. 16 Q. I certainly don't need to take you to that because in 17 general that is the position. 18 So was it not the case that when one was expressing 19 the importance of a fixed price contract to tie, and to 20 the Council, it was actually more important to the 21 Council than it was to tie? 22 A. I would have said that it was -- as I've said in my 23 statement, it was important to both parties because tie 24 wasn't an unrelated third party entity. It was part of 25 the Council. So in my mind the value that was being 161 1 delivered to -- of the project was -- was as important 2 to -- to both. 3 If the project hadn't been affordable, then the 4 project wouldn't have been -- the contracts wouldn't 5 have been signed. So it was important to all parties 6 that the contract was appropriately funded, value for 7 money. 8 Q. I'm not suggesting the contract was not important to 9 both. But the ultimate financial responsibility and the 10 only one of the two bodies with the financial resources 11 to pay for the contract lay with the Council, didn't it? 12 A. Yes, that's correct. 13 Q. So leaving aside the fact that the contract might never 14 have been signed at all, upon the assumption that there 15 was a contract which was going to be signed, the 16 ultimate responsibility lay with the Council, didn't it, 17 not with tie? 18 A. I'm sorry, apologies, I'm not sort of -- I didn't follow 19 your question. 20 Q. If the contract was signed, the ultimate financial 21 responsibility to pay under that contract lay with the 22 Council, didn't it? 23 A. It lay with the Council in terms of the guarantee which 24 the Council gave to the contractor. 25 Q. I mean, I may be wrong, but I don't think tie had any 162 1 substantial resources of its own at all? 2 A. No, it didn't. To my knowledge, it didn't. It was set 3 up by the Council for delivering this project. 4 Q. So can we agree that the statement on page 17 of your 5 witness statement that the fixed price was important to 6 tie and CEC ought to be qualified by accepting that it 7 was actually more important to the Council than it was 8 to tie? 9 A. In terms of -- and bearing in mind, Mr Martin, 10 I wasn't -- this is my view from the point at which 11 I was engaged in the Infraco drafting and negotiation; 12 and the statement that I've made there was a statement 13 which, you know, I would stand behind because the tie 14 people that I was in negotiations, or were part of the 15 negotiating team, were keen to be ensuring that what was 16 being proposed by the bidders was affordable and 17 represented value for money. 18 Q. Dr Fitzgerald, what is the answer to my question? Was 19 it not the case that the fixed price requirement or 20 desire was actually more important to the Council than 21 to tie? 22 A. I can't agree with what you're -- what you're saying. 23 From my perspective of the people that I was working 24 with at tie, price was just as important to them. 25 tie were -- they weren't a third party agent working 163 1 for the Council. They were part of the Council. You 2 know, in that they had been specially created by tie for 3 this project. 4 Q. I'll leave aside your answer to my previous question, 5 but upon the hypothesis that desire for a fixed price 6 contract was more important to the Council than to tie, 7 do you accept that that would give rise to a particular 8 duty of care to advise the Council, as distinct to 9 advising tie, of the consequences of anything which 10 might mean that the contract was not a fixed price 11 contract? 12 A. And from the research I've done, looking at these 13 documents, there was advice that was given to the 14 Council in terms of how these risk matrices were set up. 15 There were also -- I wasn't there, Mr Martin, so 16 I can't comment, but there would have been presentations 17 to the tie Board. The members of that Board included 18 members of the Council, and also members of 19 Transport Scotland, I think. Perhaps not at that time, 20 but there were earlier. But certainly there were 21 representatives from the Council. 22 Q. Is the answer to my question then yes, because you say 23 it was done? I know it wasn't done by you? 24 A. Yes. 25 Q. But there was -- it was accepted that there was 164 1 a particular responsibility to advise the Council in 2 relation to whether or not what had been achieved was 3 a fixed price contract; are you accepting that? 4 A. We were acting in accordance with our duty of care 5 letter, which was to advise where we had been requested 6 by the Council. Part of that was in delivering these 7 letters that you've seen, and so in terms of -- it's 8 very difficult because I didn't write these letters, but 9 what I'm reading in the letters, and maybe it's just 10 because I'm -- this is the field that I work in, but 11 I think that it's very clear that the risk matrix was 12 showing how the risk was sitting in the contract. 13 Q. Dr Fitzgerald, I don't want to take up any more time 14 with this than is necessary. I am not asking you about 15 what was actually done. I'm asking you questions, as 16 a solicitor, who was to some extent engaged in the 17 project at the time, who has made the statement in 18 a witness statement that I am relying upon, and the 19 question I'm asking you is: if it were the case that, as 20 the ultimate paymaster, a fixed price contract was more 21 important to the Council than it was to tie, then do you 22 accept that the duty of care accepted by DLA required 23 DLA to give that particular advice to the Council? 24 A. I don't accept what your hypothesis, Mr Martin. 25 Q. I know that, Dr Fitzgerald. Forgive me for 165 1 interrupting. I know you don't accept it. But from 2 that hypothesis, could you answer my question, please? 3 A. I think to answer the hypothesis involves -- I don't 4 know how to answer that question, Mr Martin. 5 Q. Well, I will leave the matter to the Inquiry. 6 Could I then ask you to look, please, at the 7 relevant and most critical part of the Infraco contract, 8 which is document USB00000032. This is Schedule Part 4. 9 A. Yes. 10 Q. In particular pages 5 and 6, if it were possible to have 11 both on the screen at the same time. 12 Thank you very much. 13 Now, we can see, under section 3.4, beginning in the 14 lower part of the page on the left, the Pricing 15 Assumptions. Is that right? 16 A. Yes. I've not reviewed this part of the contract. This 17 was drafted at a time which post-dated my involvement in 18 the project. So I have not actually read this before, 19 Mr Martin. 20 Q. You have not read it before? 21 A. No. 22 Q. All right. 23 A. So I think when I was involved in the project, I need to 24 check back with my records, but I believe that Schedule 25 Part 4 was blank. 166 1 Q. It was blank when you saw it? 2 A. Yes. When -- at the point at which I was involved in 3 the project. 4 Q. I was going to ask you in line with the application I've 5 made to the Inquiry about who was responsible for the 6 creation of largely these two pages or parts of these 7 two pages. May I take it that you don't know? 8 A. I don't know. All I can say is that the -- from my 9 discussion with Andrew at the time, I understood that 10 what was in this schedule was based on the commercial 11 deal which had been struck in Wiesbaden. 12 Q. So you were aware of these at the time, albeit you may 13 not have been involved in the drafting? 14 A. I was -- I was aware through Andrew telling me in 15 a telephone conversation. 16 Q. In paragraph 3.4, under the heading "Pricing 17 Assumptions", we can read: 18 "1. The Design prepared by the SDS Provider will 19 not (other than amendments arising from the normal 20 development and completion of designs) ..." 21 And then there are various qualifications. I'm 22 sorry, could you take that off because I do want to be 23 able to read on to the second page. 24 1.2 is be amended in certain respects. 1.3 is be 25 amended. 167 1 So in other words, the design would not be amended 2 other than amendments arising from the normal 3 development and completion of designs. 4 Then at the end of paragraph 1: 5 "For the avoidance of doubt normal development and 6 completion of designs means the evolution of design 7 through the stages of preliminary to construction stage 8 and excludes changes of design principle, shape and form 9 and outline specification." 10 Now, were you aware of that at the time, albeit in 11 the course of discussions with Mr Fitchie? 12 A. I wasn't aware of any of the detail of the drafting, 13 merely of the principles that had been -- that were 14 basically, from what Andrew was telling me, were 15 undermining the original procurement strategy in terms 16 of how design risk would be dealt with in terms of the 17 Infraco contract. 18 Q. So you were aware that the price ultimately was based on 19 certain Pricing Assumptions which were described within 20 the schedule, even if you didn't know the precise 21 details of what had been written down? 22 A. Yes, there were -- what -- what I might have described 23 as being fixed price was -- from what Andrew was telling 24 me, it had been qualified by the commercial discussions 25 that had happened at Wiesbaden. So apologies, I can't 168 1 really say any -- be any more specific than that. 2 I have not read this schedule. 3 Q. Look at the top of the page on the left. 3.2.1, please. 4 A. Yes. 5 Q. "It is accepted by tie that certain Pricing Assumptions 6 have been necessary and these are listed and defined in 7 Section 3.4 below." 8 Which we have just looked at, at least in part? 9 A. Yes. 10 Q. "The Parties acknowledge that certain of these Pricing 11 Assumptions may result in the notification of a Notified 12 Departure immediately following execution of this 13 Agreement. This arises as a consequence of the need to 14 fix the Contract Price against a developing factual 15 background. In order to fix the Contract Price at the 16 date of this Agreement, certain Pricing Assumptions 17 represent factual statements that the Parties 18 acknowledge represent facts and circumstances that are 19 not consistent with the actual facts and circumstances 20 that apply." 21 Now, viewing that as a solicitor, Dr Fitzgerald, 22 what does that final statement mean? 23 A. I need to read the whole thing again, Mr Martin. 24 CHAIR OF THE INQUIRY: Do you want it enlarged? 25 A. Yes, please. That would be very helpful, thank you. 169 1 (Pause) 2 Okay. Sorry, Mr Martin, what was your question 3 again? 4 MR MARTIN: The question relates to the final sentence which 5 I read. I'll take it in stages. 6 In order to fix the contract price as at the date of 7 this agreement, so in other words, it was for the 8 purpose of fixing the contract price. That is stated? 9 A. Yes. 10 Q. Is that right? 11 A. Yes. 12 Q. So the purpose is stated in clear words. It's to 13 provide this fixed contract price: 14 "... certain Pricing Assumptions represent factual 15 statements ..." 16 So there are factual statements being represented in 17 the Pricing Assumptions, that the parties acknowledge, 18 that includes tie, represent facts and statements "that 19 are not consistent with the actual facts and 20 [statements] that apply". 21 CHAIR OF THE INQUIRY: I think it's "facts and 22 circumstances". 23 MR MARTIN: Sorry, "facts and circumstances". What does 24 that mean? 25 A. It means that bearing in mind I don't have any factual 170 1 background in terms -- it means that the pricing has 2 been based on certain assumptions which the parties have 3 agreed to apply, but in reality there are other facts 4 and circumstances that reflect the reality, and if 5 the -- I mean, it's -- you know, I suppose reading it 6 through, it's basically -- you know, to my mind it's 7 just setting it up for the fact that a Notified 8 Departure will be triggered if what is acknowledged to 9 be the basis on which the price is fixed changes. 10 Q. I'm going to come to the Notified Departure just in 11 a few seconds, but concentrating on the sentence which 12 I have just read out, it is an agreement between the 13 parties, including tie, that certain statements of fact, 14 factual statements, included in the Pricing Assumptions 15 are not true. They are known not to be true. Perhaps 16 the word "true" is pejorative. They're known not to be 17 accurate. Known not to be consistent with the true 18 facts? 19 A. Mm-hm. 20 Q. Is that right? 21 A. I would use the language that was there, it's consistent 22 with the actual facts and circumstances. I think for 23 all of us understanding this, it would be useful to 24 understand what this was actually talking about, and so 25 forgive me, I can't give any background on what -- 171 1 Q. I'm not asking for background. I'm asking you about 2 what this is actually saying. 3 So in other words, the fixed price which you 4 acknowledged was important to both tie and the Council 5 was based in the contract in Schedule Part 4 upon 6 factual statements which were known by the parties at 7 the time to be incorrect. Is that correct? 8 A. And going back to the start of the clause, that was why 9 certain Pricing Assumptions have been necessary and they 10 are listed. So it was off the back of that 11 acknowledgment, which is on the face of the contract. 12 That's why there were Pricing Assumptions, and a trigger 13 which would apply -- if the Pricing Assumption was not 14 met, then that would trigger the Notified Departure 15 which was in effect a public sector risk. 16 Q. I understand all of that, Dr Fitzgerald. I'm not asking 17 you about that. 18 I'm asking you about the underlying statement in 19 this paragraph which is to the effect that the contract 20 price is to be based upon factual Pricing Assumptions 21 which are known to be incorrect. That is right, isn't 22 it? 23 A. I think it's known not to be consistent with actual 24 facts and circumstances. So -- 25 Q. Come on, Dr Fitzgerald. That means not correct. It 172 1 probably also means false and untrue. But let's just 2 say it means incorrect. Known to the parties. 3 A. I wouldn't be using that sort of language, Mr Martin, in 4 the context of a clause that's been set up by both 5 parties to acknowledge that these are the triggers for 6 a Notified Departure if a certain assumption isn't met. 7 Q. All right. 8 A. So I think that's an open acknowledgment of -- 9 Q. I'll leave your answer to that. 10 On the basis, however, that it is known that 11 different facts and circumstances will apply ultimately 12 to those which are stated in the Pricing Assumptions 13 upon which the contract price is fixed, that means 14 inevitably that a different price will ultimately have 15 to be paid, won't it? 16 A. If the Notified Departures are triggered. 17 Q. Well, indeed. That's the procedure. I was about to 18 say. And it's beyond doubt that that is the case, 19 because it is said that there will be an immediate 20 Notified Departure, and there may very well be other 21 Notified Departures. 22 A. Yes. 23 Q. So it is obvious from this clause that what was agreed 24 by reference to the Pricing Assumptions which were based 25 on incorrect facts and circumstances, it was inevitable 173 1 that the price would not be the contract price, wasn't 2 it? 3 A. I think from my understanding from what Andrew had 4 explained and the Wiesbaden deal and my earlier 5 comments, I think that's the presence of having Notified 6 Departures took this out of being a fixed price contract 7 with the risk being met by Infraco to being a contract 8 where a -- presence of a -- an occurrence of a Notified 9 Departure passed that risk to the public sector. 10 CHAIR OF THE INQUIRY: I think the question, Dr Fitzgerald, 11 was: wasn't it inevitable that the price would not be 12 the contract price? 13 A. In my opinion, yes, that was -- that's the effect of 14 this clause. 15 MR MARTIN: Thank you, my Lord. 16 Finally, then, Dr Fitzgerald, did that not give 17 rise, in your own mind as a solicitor, to a particular 18 duty to advise the ultimate paymaster, City of Edinburgh 19 Council, that that was the inevitable result of the 20 contract which they were going to authorise tie to enter 21 into, that in fact it was not a fixed price contract by 22 reference to the contract price stated in the documents 23 themselves; it was inevitably going to be a contract 24 with another unidentified and unidentifiable price? 25 MR DUNLOP QC: My Lord, I apologise for interrupting. This 174 1 witness is more than capable of looking after herself, 2 but my learned friend keeps asking questions which are 3 purely questions for his Lordship. The extent of any 4 duty of care is a matter of law, purely a question for 5 your Lordship, and we might as well ask any solicitor 6 that comes into the witness box to answer this question. 7 CHAIR OF THE INQUIRY: I appreciate your interest, 8 Mr Dunlop, but I think I'll let the question stand. 9 MR MARTIN: My Lord, I hope I don't have to repeat it, but 10 I am happy to have it answered and it was going to be my 11 final question. 12 A. I think, Mr Martin, as I said earlier, in terms of 13 the -- please bear with me, but I wasn't involved in 14 drafting all of the documentation. I didn't attend all 15 of the meetings. But there is a risk matrix which 16 clearly shows Notified Departures as being a public 17 sector risk. 18 MR MARTIN: My Lord, I'm much obliged. 19 CHAIR OF THE INQUIRY: I don't think there are any other 20 questions. 21 Dr Fitzgerald, that concludes your evidence today. 22 You're still under your citation, and it may be that you 23 may be required to come back again. If that happens, 24 the Inquiry will keep in touch. Hopefully it won't be 25 necessary. But thank you in the meantime for your 175 1 attendance today. 2 A. Thank you. 3 (The witness withdrew) 1 INDEX 2 PAGE 3 MR IAIN MCALISTER (continued) ........................1 4 5 Examination by MR MCCLELLAND (continued) ......1 6 7 Examination by MS FORSTER ...................106 8 9 DR SHARON FITZGERALD (affirmed) ....................127 10 11 Examination by MR LAKE ......................127 12 13 Questions by CHAIR OF THE INQUIRY ...........153 14 15 Examination by MR MARTIN ....................158 16 17 MR NEIL RENILSON (sworn) ...........................176 18 19 Examination by MR LAKE ......................176 20 21 22 23 24 25 202