REUTERS | Jonathan Drake
June 11, 2019

A missed opportunity – Haberdashers and subrogation

REUTERS | Jonathan Drake
June 11, 2019

A missed opportunity – Haberdashers and subrogation

Earlier this year I found myself waiting for the Court of Appeal to bring the next instalment in a series of interesting decisions regarding subrogation claims in insurance disputes (not a contradiction in terms, I promise!), which I and my colleague John have been taking it in turns to blog about (see Joint insurance and rights of subrogation revisited and Co-insurance and subrogation rights revisited (again!)). Unfortunately (though perhaps not for those involved) the case in question (Haberdashers‘ Aske’s Federation Trust Ltd v Lakehouse Contracts Ltd and others) settled.

But it feels as though there’s been a missed opportunity to answer a question that was left entirely open in Gard Marine and Energy Ltd v China National Chartering Company Ltd: where there is a co-insurance policy in place and a sub-contractor causes loss, if the co-insurance policy (for whatever reason) does not cover the sub-contractor, can the insurer bring a subrogated claim against the sub-contractor or, does it first have to prove the sub-contractor is liable for the loss?    Continue reading →

REUTERS | Maxim Shemetov
June 4, 2019

What does “expert in the field of X” mean?

Picture this scenario. The parties’ contract provides that when there is a dispute, an adjudicator is to be appointed from a panel of three, which the parties have already agreed on. In the alternative, if the parties cannot agree the identity of the three panel adjudicators, they will be nominated by the President of the Chartered Institute of Arbitrators (CIArb) as the adjudicator nominating body (ANB). In the event, the parties fail to agree on who the three should be, and then one of them is unhappy with who the CIArb selects.

This scenario played out before Jefford J earlier this year. It was, in effect, a dispute about a dispute, but led to some interesting comments from the judge about adjudicator nomination.

Continue reading →

REUTERS | David Gray
May 29, 2019

Beware the short-cut – are preliminary issue hearings a bad idea?

Anyone who has used a GPS knows that sometimes the shortest route can take a mighty long time. On a trip to Pebbly Beach in New South Wales it took me down a little dirt road with so many potholes it resembled swiss cheese. If that wasn’t bad enough, the road led to a dead end, necessitating a slow drive back, in reverse, trying not to get trapped with no mobile phone service.

Preliminary issues hearings carry the risk of becoming much like that shortcut, at least for the parties in Walter Lilly v Clin as they navigated the equally treacherous terrain of court procedure. Unfortunately the preliminary issues hearing, while supposed to assist with resolving their dispute, failed to achieve its aims and ended up taking the parties through four hearings spread out over four years, lengthening and adding to the expense of the court process.

In this post I look at the difficulties that arose in the case and discuss some key considerations to bear in mind when framing a preliminary issue. But first, let’s have a quick recap of the procedural history and the facts.  Continue reading →

REUTERS | Ali Hashisho
May 22, 2019

FIDIC 2017’s enhanced contract management provisions

In a blog I posted soon after the FIDIC 2017 contracts were launched, I commented that the vast majority of the changes in the second editions related to enhanced contract management provisions. There are many elements to these provisions including stricter formalities for notices, many more situations in which notices have to be given and a greater number of time limits, deeming provisions and potential time-bars. The purpose behind these changes is essentially twofold; they are aimed at providing greater clarity and certainty and at encouraging the parties to deal with issues as they arise. The increased number of potential time-bars has been a particular source of discussion and debate. By their nature, this is hardly surprising given the potentially onerous consequences that follow from them. In this blog, I look at the intention behind these provisions and the issues that may arise in practice. Continue reading →

REUTERS | Erik De Castro
May 22, 2019

Further clarification on the impact of a CVA on adjudication enforcement

In January, in the second of the two conjoined appeals of Bresco Electrical Services Ltd v Michael J Lonsdale (Electrical) Ltd, Cannon Corporate Ltd v Primus Build Ltd, the Court of Appeal upheld the first instance decision to enforce an adjudicator’s decision where the enforcing party was in a company voluntary arrangement (CVA).

In contrast, last week in Indigo Projects London Ltd v Razin and another, the court refused to enforce an adjudicator’s decision where the enforcing party was in a CVA. The reasoning was that enforcement of the decision would interfere with the accounting exercise to be carried out under the CVA. The court provided useful guidance on when this argument is likely to succeed.  Continue reading →

REUTERS | Yves Herman
May 21, 2019

Jefford J decides brace of natural justice challenges

In recent months, we haven’t seen many challenges to adjudicator’s decisions based on allegations that the adjudicator breached the rules of natural justice, and so it came as a bit of a surprise last week to see two handed-down by the same judge on the same day!

Jefford J has dealt with these cases in her customary detailed manner,  leaving no stone unturned. My thoughts on RGB P&C Ltd v Victory House General Partner Ltd and JJ Rhatigan & Co (UK) Ltd v Rosemary Lodge Developments Ltd are as follows. Continue reading →

REUTERS |
May 15, 2019

Build UK’s recommendation on contract terms: a step in the right direction

Build UK, a leading representative organisation for the construction industry, has published a non-binding recommendation on which contract terms its members should (as a minimum) refrain from using. The recommendation “seeks to form a new common ground between clients and the supply chain on contractual practice in the construction sector” with the key objectives being “to promote collaboration, encourage a fairer allocation of risk through the supply chain, and deliver better project outcomes”.

In this blog I look at each of Build UK’s recommendations and consider whether they represent a departure from current market practice, or a consolidation of the examples of best practice that we are already seeing clients and contractors adopting in the current market. Continue reading →

REUTERS | Ilya Naymushin
May 14, 2019

Burning a Bridge

It is unusual for a court of first instance to decline to follow obiter dicta of the appellate courts. This tendency is particularly marked where that appellate court is the House of Lords, and even more so when the obiter dictum in question is not in direct conflict with any other statement of the law on the point at the appellate level.

However, in his recent decision in Thomas v Taylor Wimpey Developments Ltd and others [2019] EWHC 1134 (TCC), HHJ Keyser QC departed from the norm by concluding that the second of Lord Bridge’s qualifications, in Murphy v Brentwood DC [1991] AC 398, to the general principle that a builder does not owe a duty in tort in respect of latent defects in a building absent an assumption of responsibility, “does not represent the law”.  Continue reading →

REUTERS | Bobby Yip
May 13, 2019

Validity of contractual notices and valuation of variations – Maeda v Bauer

The Hong Kong High Court judgment in Maeda and China State v Bauer, handed down on 9 April 2019, deals with two issues that arise regularly in practice but are rarely the subject of judicial consideration.

The issues, in short, are:

  • Will a notice be valid where it has been given on the basis of one ground of dispute under the contract but the claimant succeeds on a different ground? (Notices Issue).
  • If work is to be valued using fair and reasonable rates, should the valuation be based on market rate or cost? (Valuation Issue).

Continue reading →

REUTERS | Lucy Nicholson
May 8, 2019

(Un)signed, sealed, delivered: Anchor 2020 v Midas Construction

It is common practice for parties in the construction industry to undertake work under a letter of intent before the contract is formally executed. This practice ensures that design can be undertaken, materials can be procured, the site can be prepared and, ultimately, work can begin notwithstanding ongoing contractual negotiations.

However, letters of intent often form the basis of disputes and their contractual status can be unclear. For example, letters of intent have been:

Uncertainty, and with it disagreement, is plainly likely when contractors perform work in anticipation of a final contract that is never formally executed. That was the case in RTS Flexible Systems v Molkerei, where the employer sent a letter of intent containing a draft contract. It also contained a “subject to contract” clause which stipulated that the terms within the letter of intent would not be binding unless executed by both parties, which it was not. The Supreme Court held that the parties had nevertheless entered into a binding agreement: on the evidence, the parties had agreed to waive the “subject to contract” requirement.

The recent case of Anchor 2020 v Midas Construction Ltd raised similar issues to RTS but will be of particular importance to the construction industry, not least because the contract in question was a JCT Design and Build Contract, 2011 Edition. Continue reading →