Christina Rossetti, In the Bleak Midwinter:
“In the bleak midwinter, frosty wind made moan,
Earth stood hard as iron, water like a stone;
Snow had fallen, snow on snow, snow on snow,
In the bleak midwinter, long ago.”
Christina’s words seem apt for the weather the country has experienced this month. While our thoughts may turn towards spring and warmer weather, we have had plenty to ponder during January. Continue reading
Our previous blog post considered whether JCT bonds were on-demand instruments or guarantees. The issue of bonds and guarantees came up again recently in a slightly different context. Our client asked us to advise on its demand for payment under a “performance bond“. The client explained that the performance bond was an on-demand instrument and that it had followed the requirements of the bond exactly in making its demand. This seemed to be relatively straightforward, so what was the problem?
This month’s Ask the team considers the relevance of the Construction (Design and Management) Regulations 2007 (CDM 2007) to offshore wind farms. Continue reading
Last week, the Supreme Court handed down its judgment in R (Prudential plc and another). It may not have come as a surprise that the court held, by a majority of 5:2, to limit to members of the legal profession the right to claim legal advice privilege (LAP).
I’ve got a multiple choice question for you: is a Project Bank Account (PBA)?
A. a simple mechanical process which allows for fast and secure payments to be made to the supply chain, cutting out slow payers;
B. a complicated pain in the proverbial which achieves no real benefit for anyone; or
C. a small animal living under my staircase (well, there is always one multiple choice answer you can rule out).
Whatever you think, PBAs, love them or loath them, are here and they are here to stay. Great if you answered “A”, but less so if you answered “B” or “C”.
As a topic, adjudicators’ reasons have appeared on this page fairly regularly over the years, most often to do with one party alleging that there has been a breach of the rules of natural justice because the reasoning provided is inadequate. Conversely, we seldom see parties arguing before the court on enforcement that the adjudicator wrote too much, that his reasoning was too detailed and overly long.
However, when I was reading Ramsey J’s judgment in WSP v Dalkia, the thought struck me just how much of the judgment was actually obiter. Continue reading
Allow me to set the scene. Our client, Q, is procuring a major office development in the City of London. Q tells me that, in order to secure the most competitive tenders for the project, he has decided to give the contractor advance payments and payments for off-site goods and materials. Fairly standard practice, particularly in this market. Q goes on to explain that these payments will be bonded using the JCT standard forms of advance payment and off-site goods and materials bond (the “JCT bonds”) because they are on demand and as good as money in the bank, aren’t they?
Hardly a month goes by where I don’t have an English or Scottish judgment to consider on this blog, where one party is seeking to enforce an adjudicator’s decision, the other party is resisting, in its defence raising a jurisdictional challenge or arguing there has been some breach or other of the rules of natural justice. So it was in SW Global v Morris & Spottiswood, which was heard by Lord Hodge just before the new year.
A contractor whose progress and performance are unsatisfactory presents an employer with a number of options as to how to proceed. Whichever option the employer chooses, it will be wise to bear in mind the implications of that course of action for other interested parties, including a bondsman of the contractor’s obligations (as in the case of Aviva v Hackney Empire Ltd, decided by the Court of Appeal last month).
In 1992, the House of Lords said that a contractual obligation to exercise good faith was “…inherently repugnant to the adversarial position of the parties when involved in negotiations… [which] is unworkable in practice…” (Walford v Miles 1992 AC 128). It refused to imply such an obligation during pre-contract negotiations. 20 years later, has anything changed?
