The Challenge had been attempting to sue the NCS Trust for £26m after it lost a £60m contract to deliver NCS services in August last year, which led to the organisation going into administration.
The Challenge’s High Court lawsuit included claims that an “inadequate and/or not fit for purpose” NCS IT system led to places not being filled on the 2019 programme. The NCS Trust rejected the allegations.
The £2.8m settlement, announced today, relates to the cost of unfilled places on the 2019 scheme owed to The Challenge under the terms of its contract with the NCS Trust.
The NCS Trust has not accepted liability as part of the legal arrangement.
About 210 people worked for The Challenge at the time it went into administration.
A statement from the NCS Trust said the High Court proceedings had been settled without any admission of liability from the trust.
“The parties can now confirm that they have agreed mutually acceptable terms of settlement which resolve all outstanding issues between them,” the statement said.
“Without any admission of liability, NCS Trust has agreed to pay a sum of £2.8m in respect of costs incurred by The Challenge for unfilled places during 2019 which can be claimed under the contract.
“NCS Trust has accepted no liability in respect of the other two parts of the £26m claim brought by The Challenge.
“The payment was authorised by the Department for Digital, Culture, Media & Sport and HM Treasury and was negotiated with Phillip Sykes of RSM Restructuring Advisory LLP as joint administrator on behalf of the creditors of The Challenge.
“Neither party shall make any further comment.”