Monthly Archives: March 2016

REUTERS | Navesh Chitrakar
March 31, 2016

March 2016 digest: budget, payment and procurement

Lewis Carroll, Alice in Wonderland:

“‘Take some more tea’, the March Hare said to Alice, very earnestly.
‘I’ve had nothing yet’, Alice replied in an offended tone, ‘so I can’t take more’.
‘You mean you can’t take less’, said the Hatter: ‘it’s very easy to take more than nothing’.
‘Nobody asked your opinion’, said Alice.”

Some may feel that this month’s budget was a bit like Alice’s exchange. There was more in it for some, less for others. As we said at the time, we are scratching our heads to find a sweetener for the construction industry, although those who like to pour some sugar in their tea (or coffee) may have to wait a while before they are subject to the new tax. For all the other budget-related news, see our budget landing page. Continue reading →

REUTERS | Carlo Allegri
March 31, 2016

“What are you referring to…?” The increased latitude required when considering adjudicators’ jurisdiction

With both the US and London mayoral elections gaining momentum, and leading commentators poised to offer independent research, enlivened views and sage analysis, you really would be forgiven for not having had your eyes trained on recent enforcement action in the TCC.

The judgment in Penten Group Ltd v Spartafield Ltd, is therefore one you might have missed (but wouldn’t want to). Continue reading →

REUTERS | Stefan Wermuth
March 29, 2016

Implied terms in construction disputes, but not as we know them

It’s funny how the construction world can throw up cases with unexpected outcomes. For example, I recently commented on my surprise at Coulson J’s judgment in Deluxe v Beck Interiors. I was also similarly surprised by Edwards-Stuart J’s judgment in Manor Asset v Demolition Services, which was handed down just three days later. There the court found that there was an implied term in the parties’ building contract that allowed their bespoke payment provisions to comply with the Construction Act 1996. One might have thought that, when faced with non-compliant payment provisions, the relevant parts of the Scheme for Construction Contracts 1998 would be implied, but not so. Instead, we got an implied term that the parties had agreed the prescribed period for giving a pay less notice was to be reduced to nil.

There is certainly debate raging over whether the court got it right by implying such a term, whether the Scheme should have been imported “lock, stock and barrel” instead, or whether the employer “consciously chose to forgo his right to give a pay less notice”. Whatever your views on which argument is correct (or have your own alternative theory), there are other aspects of the judgment that are also worth a brief look. Continue reading →

REUTERS | Mukesh Gupta
March 23, 2016

Risky businesses and cottage industries

Last week I went to a presentation on systemic risks in major engineering projects. It certainly got me thinking. What sort of risks really matter to clients, funders and other project stakeholders?

High on the list for international projects or major UK infrastructure projects are such things as brownfield risk, the regulatory and political environment, obtaining consents and the cost of capital. Similarly, for commercial and other non-infrastructure developments issues such as the economic cycle, availability of finance, tenant/onward purchaser sentiment and planning risk will feature. Major construction risk, for example a tunnel flooding while under construction and the associated time and cost consequences, will also appear on any list of key issues. Continue reading →

REUTERS | Maxim Shemetov
March 22, 2016

TCC reminds parties too many adjudication challenges are without merit

These days, adjudicators don’t always get named in TCC judgments. It seems to depend on who the judge is, what the matters in dispute are and how well the adjudicator performed. That said, Coulson J is one judge who seems to like naming the adjudicator and the keen-eyed among you will have noticed that Matt was name-checked in two of his most recent judgments. Therefore, I will be looking at those cases.

This week it is the turn of  AMD Environmental Ltd v Cumberland Construction Company Ltd (I’ll leave Penten Group Ltd v Spartafield Ltd for another time). Continue reading →

REUTERS | Mohamed Nureldin Abdallah
March 21, 2016

Alliance contracting: no blame, no fault

This is the third of a series of quarterly blog posts on alliance contracting and looks at the “no blame, no fault” provisions that are key to a number of alliancing contracts. It examines the meaning of these concepts in an alliance contract, the benefit to the contracting parties and, most importantly, whether such provisions are enforceable.

Probably the most alien characteristic of the alliance contracting model to both contracting parties and lawyers alike is the “no blame culture” that underpins the agreement. Essentially, this means that parties agree not to bring legal proceedings against each other, save in the event of “wilful default” or if an insolvency event occurs. Continue reading →

REUTERS | Heinz-Peter Bader
March 15, 2016

No manifest injustice so no stay of enforcement

Last March I wrote about Edwards-Stuart J’s judgment in Galliford Try v Estura and the implications, both in terms of a party’s ability to start a counter adjudication following a “smash and grab” adjudication, and also with regard to the “manifest injustice” arguments that were raised in the enforcement proceedings.

Almost a year on and we’ve had the second reported judgment where a party sought to rely on manifest injustice to support a stay of enforcement proceedings. I’m referring to RMC v UK Construction, another Edwards-Stuart J judgment. Continue reading →

REUTERS | Baz Ratner
March 11, 2016

Transparency is key to avoiding bias allegations

It is not unusual in construction disputes for parties to go back to the same advisors time and again. Everyone has their “favourites”, their preferred experts, mediators, adjudicators and arbitrators, who will be appointed as required.

Therefore, Hamblen J’s judgment in Cofely Ltd v Anthony Bingham and another acts as a reminder to all those involved in our industry of the relationships that may develop and the need for transparency about those relationships. It demonstrates the consequences that may arise when that does not happen and is bound to cause people to sit up and think carefully about who their adjudicator or arbitrator is, and who else may instruct (or has instructed) them. Continue reading →

REUTERS | Miro Kuzmanovic
March 10, 2016

Blurred lines between liability in contract and tort

In Burgess and another v Lejonvarn, Alexander Nissen QC (sitting as a Deputy High Court judge) determined that the defendant owed a duty of care in tort to her former neighbours in connection with what the court held to be the provision of a number of professional services on their garden project.

This was so irrespective of the fact that the parties had concluded no contract, for a whole host of reasons, including that there had been:

  • No offer and acceptance.
  • No intention to create legal relations.
  • No consideration.

Indeed, the court went so far as to say that “the contention that the parties had concluded a contract was a hopeless one”.

Oliver Pearson has already provided a detailed account of the facts of the case in an earlier post, so I won’t repeat that here. I want to look more closely at some of the tortious duties that were found to arise. A number of those duties imported positive obligations to act, and beg the question: if you haven’t entered into any contract, can the law of tort build one for you? Continue reading →

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