- £90m Lord Street redevelopment dispute could leave taxpayers footing the bill.
- Analysts warn payout may trigger ‘technical default’ and threaten credit rating.
- Michael Josem: Lord Street site in Douglas is ‘literally in ruins’ with taxpayers at risk.
- Former minister Chris Robertshaw: Island ‘living off the interest from reserves’.
- MoneyVAL review looms, with charity sector flagged as a potential weak spot.
- Court told government disclosure ‘painful, costly and time consuming’.
The Isle of Man is facing mounting questions over its financial stability as a £90 million court case drags on and international regulators prepare to scrutinise the island’s defences against money laundering.
Analysts have warned that if the government is forced to pay out £90 million on the Lord Street case, it could trigger a technical default and put at risk the island’s prized gold-standard credit rating, raising borrowing costs and further undermining financial stability.
Key Facts : Lord Street case
• Value at stake: £90 million
• Key parties: Sondica Group Inc., Department of Infrastructure, Treasury, Lambert Smith Hampton
• Main allegations of last hearing: Missing documents, altered emails, misfeasance in public office
• Time elapsed: More than 6 years since first disclosure order in 2019
• Next hearing: 5 November 2025
Michael Josem, of the Manx Taxpayers’ Alliance, said, ‘….with the Lord Street redevelopment court case is just another straw on the camel’s back whereby we have this giant scar in the middle of our town… And to learn that there’s now 90 million pounds at stake in this court case is scary to me as a taxpayer of the island man, because it means that I suspect that the government officials who made this decision are not going to be held to account. ‘And yet again, it’s going to be the banks taxpayer who’s going to have to fork out their money if this goes even more pear shaped than it already is’.
He added: ‘if we pull 90 million pounds out of that fund, then that means that you’re going to either have to cut the medical and health and pension and social care, or you’ve got to extract that money from elsewhere in. That money doesn’t grow on trees’.
Timeline: The Lord Street Court Case
• 2017 – Initial reports by Lambert Smith Hampton produced, with draft and final versions referenced in correspondence.
2018 – Plans announced to redevelop the old Lord Street bus station site in Douglas into a major mixed-use complex.
2019 – Initial agreements made with developers Sondica descend into a legal dispute after DoI and Treasury choose another firm using an alleged pretence.
• 2019 – Wide order for pre-action disclosure made against the Department of Infrastructure.
• 2021 – Dispute fescalates further in court with more disclosure issues raised.
• 2021 – Site cleared, leaving a prominent empty plot in the centre of Douglas.
• 2024 – Court hears repeated complaints of missing documents; list of 62 items flagged as outstanding.
• 8 August 2025 – Case management hearing held; claimant alleges missing and altered documents, government disputes claims.
• 5 November 2025 – Next hearing scheduled, with trial preparations urged by judge.
Former minister Chris Robertshaw has also raised the alarm. ‘We haven’t balanced our books since 2008. We’ve been living off the interest from reserves built up during better times. That’s dangerous for a small nation that cannot print its own money,’ he said.
Alongside the domestic risks, the Isle of Man is also preparing for an international test of its financial systems.
The Council of Europe’s MoneyVAL body will next year begin assessing the island’s anti-money laundering and counter-terrorist financing regime.
What is MoneyVAL?
MoneyVAL is the Council of Europe’s Committee of Experts on the Evaluation of Anti-Money Laundering Measures and the Financing of Terrorism.
It is one of the most influential international bodies monitoring how countries and territories prevent dirty money from flowing through their financial systems.
The organisation assesses whether jurisdictions comply with global standards set by the Financial Action Task Force (FATF). Its findings are closely watched by banks, regulators and investors.
A poor rating can damage a jurisdiction’s reputation, make international payments more difficult, raise compliance costs for local businesses, and even deter foreign investment.
For the Isle of Man, which relies heavily on its status as a trusted international financial centre, the stakes could hardly be higher.
Timeline: MoneyVAL and the Isle of Man
• 2002 – Isle of Man undergoes its first MoneyVAL assessment.
• 2009 – Follow-up review highlights progress but urges stronger supervision of trust and corporate service providers.
• 2016 – Latest full assessment concludes the island has a ‘sound framework’ but needs more robust enforcement in certain areas.
• 2026 – The Isle of Man is scheduled for its next evaluation. Inspectors will scrutinise financial institutions, charities, law enforcement and government systems.
For Josem, the bigger picture is one of intergenerational fairness. ‘For me, today is my birthday. I turned 44, so I’ll be theoretically eligible for a government pension in 20 something years. I have no expectation that there’ll be any money left for people of me and my generation, people who are younger. And so if we are going to have some degree of internet generational fairness, people need to recognise that taking money from your children to pay for such endeavours is really scary. It’s not fair’.
Robertshaw has argued that structural reform is essential if the Isle of Man is to weather both domestic and international pressures.
He criticised a system where ‘what you get is eight individuals around the table each representing their department. It’s not collaborative. It means policy can be bludgeoned through even if only half of those involved actually support it’.
The Lord Street case is now scheduled for a disclosure hearing in November.
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