Monthly Archives: August 2017

REUTERS | Mike Blake
August 30, 2017

August 2017 digest: fitness for purpose and adjudication costs

Evelyn Waugh, Brideshead Revisited:

“If it could only be like this always – always summer, always alone, the fruit always ripe and Aloysius in a good temper…”

August, often a quiet time, filled with lazy days (because of the school holidays) and a little bit of cricket. This year, August saw two notable judgments handed down out of term:

Both will have far-reaching implications for the construction industry. Continue reading →

REUTERS |
August 30, 2017

Supreme Court rules on diffuse design and build obligations

Construction, engineering and energy disputes often give rise to issues as to the design standard to which a design and build contractor ought to be held. In such cases, the issues often relate to how the contractor’s obligations (which may be diffuse) interrelate with one another. Disputes are particularly likely to arise where the parties’ contract:

  • Requires the contractor to design and build in accordance with a prescribed standard or specification.
  • Separately, requires the contractor to provide the employer with a product that will be fit for an intended purpose or will have a particular design or service life.

In such a case, if the contractor designs and builds in accordance with the prescribed standard or specification, but that standard or specification itself proves to have been defective so the product is not fit for purpose or does not have the required design/service life, should the contractor be held liable for the consequences?

In MT Højgaard A/S v E.ON, the Supreme Court clarified how one ought to approach the issues of interpretation that arise in cases concerned with diffuse design obligations. Continue reading →

REUTERS | Luke MacGregor
August 25, 2017

Ten-day delay in filing cost budget was serious but so what!

Much has been written about the court’s discretion to grant relief from sanctions pursuant to CPR 3.9 over recent years, due to the re-formulation of the rule in April 2013 and the landmark Court of Appeal decision in Mitchell v News Group Newspapers Ltd. The strictness of the approach in Mitchell led to an outcry from academics and practitioners, but that has now been allayed by the Court of Appeal in Denton v TH White Ltd.

Mott v Long is the TCC’s most recent approach to a relief from sanctions application. Continue reading →

REUTERS | Pascal Rossignol
August 23, 2017

Losing the sympathy vote: Robin Rigg revisited

The Supreme Court’s decision in MT Højgaard A/S v E.On Climate and Renewables UK Robin Rigg East Ltd has spawned a predictable welter of case notes and commentaries. Legal luminaries have analysed Lord Neuberger’s judgment from a variety of angles, noting that the contractor (Højgaard) was held to be under a “double obligation” to comply with both the (as it turned out, defective) J101 standard for offshore wind turbine structures and the “fitness for purpose” design life warranty in the technical requirements.

But, when reading the judgment, I found my thoughts wandering down a different track. What was it that motivated the Supreme Court to disagree so fundamentally with the Court of Appeal? And what are the likely implications for parties negotiating future contracts?  Continue reading →

REUTERS | Amir Cohen
August 16, 2017

Signposts to claims-free project delivery (part 1)

Disputes within the construction industry are an inevitable part of doing business. Well, that is the frequent punditry. While parties enter into contracts with the intention of successfully completing their projects without a dispute, often there can be an almost subconscious acceptance that a dispute over time and/or money will occur at some point during the works. It should not be the case that we simply accept this as inevitable and the industry must challenge such thinking and endeavour to improve the number of projects that are delivered claims-free.

Over the years, industry has been invited to take steps to address its adversarial nature, to collaborate and to avoid disputes. From evangelists such as Latham, Egan, McNulty or Wolstenholm, to the more recent collaborative working principles defined through BS 11000 and the new international standard, ISO 44001, “signposts” and techniques to assist projects in avoiding disputes do exist.

In spite of this, the construction industry is still predominantly seen as adversarial and divisive with claims becoming more complex, protracted and costly. There is clearly room for improvement and, rather than focus on remedies and contractual defences, clients should consider what contribution they can make to a more collaborative process from the outset, with the potential to avoid disputes from arising in the first place.

This post looks at one such client that has set out on a journey of collaboration and is challenging the inevitability of disputes across its portfolio. Continue reading →

REUTERS | Navesh Chitrakar
August 15, 2017

What do your T&C’s say about payment?

I wonder how many adjudicators have checked their T&C’s since the judgment in Christopher Linnett Ltd v Harding (t/a M J Harding Contractors) came out. I know we did, just to be sure that it is clear who any appointment is with, where the money should go and what rights we have if we don’t get paid (including how interest is calculated and what we can do about our costs).  Continue reading →

REUTERS | Dinuka Liyanawatte
August 8, 2017

Project monitoring surveyor not negligent

A few weeks ago, I looked at what Coulson J had to say about experts in Bank of Ireland v Watts. I’m returning to that judgment this week to look at the project monitoring angle.

Just like experts are a recurring theme on this blog, it seems that project monitoring is too, as I have I looked at the judgment in Bank of Ireland v Faithful & Gould Ltd and I have also discussed the judgment in Lloyds Bank plc v McBains Cooper Consulting Ltd.

One point I should make. Those cases can be distinguished from this one, as they dealt with allegations of negligence concerning a project monitoring surveyor’s (PMS) progress reporting. Bank of Ireland v Watts concerns allegations of negligence over Watts’ initial appraisal report (IAR). As such, the case will undoubtedly provide clarity to surveyors and banks as to the scope of a PMS’ obligations when preparing such reports (although I suspect surveyors will be much happier with this judgment than the banks). Continue reading →

REUTERS | Lisi Niesner
August 2, 2017

Updating the FIDIC 1999 suite of contracts

This is the first in a new series of bi-monthly blog posts on FIDIC contracts. With the eagerly awaited second editions of the Yellow, Red and Silver Books expected to be published by the end of 2017 or in early 2018, there is likely to be a lot to talk about. Before then, I will be posting on some general FIDIC topics, starting with this introduction, exploring the updating of the FIDIC forms with a nod towards the recently-published NEC4 suite. Continue reading →

Share this post on: