- International assessors are examining whether the Isle of Man’s financial-crime regime works effectively in practice
- At the same time, Government and Lambert Smith Hampton remain defendants in the long-running £90m Lord Street litigation
- Questions are raised why MONEYVAL is not investigating Lord Street
- The ‘appalling’ landmark but long-running case raises issues about governance, records and institutional accountability
The Isle of Man is undergoing one of the most important international examinations of its financial system in a decade.
But the £90 million Lord Street litigation continues to expose unresolved disputes over government decision-making and the role of property consultancy Lambert Smith Hampton.
MONEYVAL inspectors began their on-site evaluation on September 28 and are scheduled to remain until October 9 – the same day as key documents in the case will be exchanged.
The Council of Europe body is testing the effectiveness of the Island’s systems for combating money laundering, terrorist financing and proliferation financing.
Compliance with the international standards, established by the Financial Action Task Force, is also being investigated.
The sixth evaluation round places particular emphasis on whether systems deliver measurable results in practice, rather than simply whether legislation and procedures exist.
But one businessman has asked why MONEYVAL is not investigating the Lord Street case, and the ferry terminal overspends, specifically.
“The £90 million Lord Street case, and the £100 million ferry terminal fiasco, are textbook examples of alleged official misgovernance involving huge sums of government money,” the Isle of Man entrepreneur told Expose.News.
“Why isn’t MONEYVAL investigating these cases?
“Where is the accountability of consultants such as Lambert Smith Hampton. Or numerous consultants and contractors involved in the construction of the ferry terminal.
“Astonishingly, neither of the cases have been resolved because they are still bogged down in the courts, or complex contractual disputes, after years and years.
“There is a common link in both of these cases: the Department of Infrastructure. Are MONEYVAL inspectors making inquiries at Sea Terminal Building?
“I have said it before there is a toxic governance culture on this Island and MONEYVAL should be de-toxifying it.”
The timing places renewed attention on the court dispute involving two government departments and one of the UK’s biggest commercial property consultancies.
Sondica Group Inc is pursuing damages of up to £90 million against the Department of Infrastructure, Treasury and Lambert Smith Hampton over the handling of the tender to redevelop the former Lord Street bus station site in Douglas.
LSH has now asked for legal questions concerning the claim against it to be resolved before the case proceeds to a full trial.
Its case is that its professional obligations were owed to its government client and that it owed no independent duty of care to Sondica.
Sondica disagrees and says LSH remains central to the factual history of the tender.
At the September 3 hearing, Sondica’s advocate highlighted what the claimant says were two materially different LSH recommendations.
According to Sondica’s case, an initial signed letter identified it as the best bid and recommended that it proceed. Around a week later, the claimant says, another version contained criticisms of Sondica and recommended that it should not proceed.
Sondica alleges that a government official intervened during that period.
Deemster Andrew Corlett made clear that the pleaded allegation of misfeasance in public office concerns the government official rather than LSH itself.
Sondica nevertheless argued that LSH remained a “critical witness” to the process.
The case is also still grappling with disclosure.
Against this backdrop, MONEYVAL’s assessors are examining the regulatory question: whether the Island can demonstrate effective defences against financial crime.
The Isle of Man’s own updated 2026 National Risk Assessment assesses its overall money-laundering risk as Medium High, reflecting its role as an international financial centre and exposure to cross-border structures.
Government says it has invested heavily in strengthening investigation, supervision, enforcement and cooperation between agencies ahead of MONEYVAL.
The Island also enters the assessment from a substantially improved technical position compared with 2016.
By 2020 MONEYVAL said the Isle of Man was fully compliant with 20 of the FATF’s 40 recommendations and had only one area with larger-scale deficiencies.
Its 2022 follow-up recorded remaining shortcomings around Recommendation 23.
Lord Street does not determine whether those systems are effective.
But for the next ten days two very different tests of Manx institutions will be running almost side by side.
International assessors will be asking how effectively the Island’s systems operate.
Across Douglas, the courts are still trying to determine how a dispute rooted in events dating back to 2015 should finally be brought to trial.
ENDS
