Monthly Archives: November 2017

REUTERS | Erik De Castro
November 29, 2017

November 2017 digest: adjudication, arbitration and payment

John Steinbeck, The Grapes of Wrath:

“A large drop of sun lingered on the horizon and then dripped over and was gone, and the sky was brilliant over the spot where it had gone, and a torn cloud, like a bloody rag, hung over the spot of its going. And dusk crept over the sky from the eastern horizon, and darkness crept over the land from the east.”

Sadly, Sir Michael Latham, whose report, Constructing the Team, did so much to change the UK’s construction industry, died this month. His legacy is remarkable, whatever you may think of adjudication or the continuing cash flow issues that persist within the industry. Certainly, both issues were at the fore at the Adjudication Society annual conference, which Richard Booth, Joanne Button and Daniel Johnson told us about. On the same topic, Jonathan Cope told us about the review of the 2011 amendments to the Construction Act 1996 and Julie Scott-Gilroy considered whether the payment terms are working in Scotland. Continue reading →

REUTERS | Yusuf Ahmad
November 29, 2017

No smoke without fire

Where there’s smoke, there’s fire. That might be a self-evident feature of a fire, but what can be far harder to establish is what caused the fire in the first place. This is the challenge the courts face in fire disputes, whether on construction projects or otherwise, where the evidence you would normally rely on has, quite literally, gone up in flames.

In Stoke-on-Trent College v Pelican Rouge Coffee Solutions Group Ltd, the court explored the issues around determining causation, which are especially relevant to disputes about the cause of a fire.

The judgment contains an interesting discussion about whether obligations implied into contracts for services are continuing or “once-and-for-all” obligations, and the different tests for causation for breach of statutory duty compared to contract and tort claims. In this blog I will concentrate on the test for causation under breach of contract and/or tortious duty. Continue reading →

REUTERS | David Mdzinarishvili
November 28, 2017

Back to school for lessons on Scottish assignation law (or assignment to you)

I had a feeling of deja vu when I looked at Lord Bannatyne’s judgment in Edinburgh Schools Partnership Ltd v Galliford Try Construction (UK) Ltd, not only because Galliford Try were involved, but because the main focus of the judgment was on assignation, the Scottish equivalent of assignment.

I looked at these issues earlier this year when I considered O’Farrell J’s judgment in Mailbox (Birmingham) Ltd v Galliford Try Construction Ltd. At the time I said that the judgment was “enough to make your head hurt”. I’m not sure it has got any easier, second time around! Continue reading →

REUTERS | Gleb Garanich
November 22, 2017

When silence is deafening: adverse inferences in relation to absent witnesses

Staff turnover in the construction industry can be particularly high and finding the right person to give evidence on all issues in a case can sometimes be difficult. Parties are often suspicious when they know there is someone who should be able to give evidence for their opponent, but whom their opponent does not plan to call. There is an obvious risk in a party calling that witness when there has been a seemingly positive pre-existing relationship with the opposing party. Consequently, it is more common for a party to invite the court to draw an adverse inference where a witness should have been called to give evidence, but is absent from the proceedings.

The principles as to when such an inference will be drawn were recently considered by the TCC in Riva Properties Ltd v Foster + Partners Ltd. Interestingly, the court took into account the fact that, in cross examination, the defendant’s witness evidence had leant towards the claimant’s case as a relevant factor in deciding whether or not an inference should have been drawn against the claimant. Continue reading →

REUTERS | Ilya Naymushin
November 21, 2017

What is and isn’t adjudication business in the TCC

On the face of it, Jefford J’s judgment in Merit Holdings Ltd v Michael J Lonsdale Ltd is a fairly typical one about payment, arising as it does, out of the construction of a new development, One Angel Court, London. However, her comments about when parties should use Part 8 for “adjudication business”, as set out in the TCC Guide, make the judgment interesting because, she says:

“… there is a real risk of the Part 8 procedure being used too liberally and inappropriately with the risks both of prejudice to one or other of the parties in the presentation of their case and of the court being asked to reach ill-formulated and ill-informed decisions.”

Continue reading →

REUTERS |
November 15, 2017

A cautionary tale on the importance of client service

The recent decision in Riva Properties Ltd v Foster + Partners Ltd, considers the duties that an architect owes to its client, specifically in the context of working in accordance with the client’s budget. Helena White and Matt Malloy have recently written about issues of contributory negligence and evidence arising out of the case. One of the most interesting aspects of the decision for me is that, over the course of a searing 313 paragraph judgment, Fraser J delivers a forceful reminder that client service is at the heart of the construction industry. Although the case specifically concerns the provision of architectural design services, it is a cautionary tale of the consequences of failing to put clients’ objectives first, which is just as relevant to lawyers, professional advisers of any specialism and indeed to all parties involved in the delivery of construction projects. Continue reading →

REUTERS | Hannah McKay
November 15, 2017

Adjudication Society annual conference: early intervention, consultations and adjudicator diversity

Over 170 delegates attended the Adjudication Society’s annual conference in London last week to listen to speakers discuss and debate issues centring on “The users’ experience and what can be done to improve it?“.

However, the conference started with a tribute to Sir Michael Latham whose report, Constructing the Team, was so instrumental in introducing statutory adjudication in the UK. Sir Michael’s report acknowledged the adversarial attitude of the UK construction industry and identified that, while the best solution is to avoid disputes, a system of adjudication needed to be introduced. He recommended that:

“… if a dispute cannot be resolved first by the parties themselves in good faith, it is [to be] referred to the adjudicator for [a] decision.”

Therefore, it was fitting that the first session considered the collaborative and non-adversarial Conflict Avoidance Process (CAP), first introduced by Transport for London (TfL) into Costain plc’s contract for the Bond Street refurbishment and Crossrail upgrade. Continue reading →

REUTERS | Denis Balibouse
November 7, 2017

2011 amendments to Construction Act 1996 are under review

On 1 May 2018 it will be 20 years since the Construction Act 1996 came into force. I think it is fair to say that, despite initial reservations by some about its introduction, most people would agree that, overall, the statutory adjudication and payment provisions have been successful. That said, like any adolescent, its teenage years have been somewhat difficult, which is mainly down to the 2011 amendments (introduced by Part 8 of the LDEDC Act 2009) to both the Act and the Scheme for Construction Contracts 1998.

Therefore, I was delighted to receive an email from a friend a couple of weeks ago letting me know that the Department for Business, Energy & Industrial Strategy (BEIS) had published a consultation on the 2011 amendments. The consultation can be accessed here and you have until 19 January 2018 to submit your thoughts.

Not only that, but the government has also published a consultation on the practice of cash retention under construction contracts (with the same January deadline). Although it is a very relevant and worthwhile consultation, it is the consultation on the 2011 amendments that I want to focus on today. Continue reading →

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