Monthly Archives: November 2018

REUTERS | Christian Hartmann
November 30, 2018

After Makdessi and GPP, the question is, are your LDs commercially viable?

Liquidated damages (LD) clauses are a fixture of construction contracts. As we all know, they are a secondary obligations to pay an agreed sum of money, arising upon breach of a primary obligation of the contract. In the case of a construction contract, this will invariably be in the event of delay: the failure to complete the works by a specified date.

LD clauses are the paradigm of something agreed very much in the hope that it will never be needed, when in the rosy glow of the start of a project, everyone is confident it will be completed on time. As a consequence, it may be that parties negotiating the sum don’t necessarily give it as much thought as they later feel it deserves when a project is overrunning, and the LDs are racking up.

However, the recent judgment of Mr Richard Salter QC in GPP Big Field LLP and another v Solar EPC Solutions SL (formerly known as Prosolia Siglio XXI) has confirmed, following on from Makdessi v Cavendish Square, that a genuine pre-estimate of loss does not need to be negotiated in minute (or indeed any particular) detail in order to avoid being seen as an unenforceable penalty.  Continue reading →

REUTERS | Ilya Naymushin
November 28, 2018

“All you need is fraud?”: stays of execution and adjudication enforcement

Earlier this year, Fraser J gave a significant judgment in which he:

  • Confirmed the circumstances in which fraud could be a successful ground to resist the enforcement of an adjudicator’s decision.
  • Developed a new circumstance, or principle, in which a stay of execution of an adjudicator’s decision may be granted.

Gosvenor London Ltd v Aygun UK Ltd was discussed by Dr Tim Sampson on this blog and is subject to an ongoing appeal. This post focuses on, and analyses in further detail, Fraser J’s so-called “principle (g)”. Continue reading →

REUTERS | Brendan McDermid
November 27, 2018

TCC refuses to dig too deeply into adjudicator’s decision and enforces

My last post was a birthday piece, which looked at issues surrounding adjudicators being appointed and getting paid. One area I only briefly touched upon was natural justice (think allegations of bias). There is easily enough material for a series of blogs on the topic, given the range of allegations that can be raised to argue that an adjudicator has breached the rules. However, today I’m looking at just one aspect:

Did the adjudicator breach the rules of natural justice by deciding the dispute on a matter not raised by the parties?

This allegation was raised in Synergy Gas Services Ltd v Northern Gas Heating Ltd. Continue reading →

REUTERS | Thomas Peter
November 23, 2018

Commercial Court upholds hot works “exclusion” in Contractor’s Liability Policy

Aspen Insurance UK Ltd & Liberty Mutual Insurance Europe Ltd v Sangster and Annand Ltd is a case that concerns a fire at a Scottish hotel, and liability under a Contractor’s Liability Insurance policy. It was heard by HHJ Waksman QC (as he then was) in the Commercial Court in June and, earlier this week, the Court of Appeal refused permission to appeal. Continue reading →

REUTERS | Lucas Jackson
November 19, 2018

Appealing findings made by the TCC: guidance from the Court of Appeal

In 2014, a waste plant owned by Wheeldon Brothers Waste Ltd was damaged by fire. Its insurer, Millennium Insurance Company Ltd, declined to indemnify the company in relation to the fire, citing alleged breaches of a variety of policy terms. At first instance, Mr Jonathan Acton Davis QC, sitting as Deputy High Court judge, ruled that Wheeldon was entitled to the indemnity.

Millennium sought permission to appeal this decision on eight grounds. Fatally, the majority of the grounds concerned the first instance judge’s findings of fact and/or his assessment of the expert evidence. In dismissing the application in its entirety, Coulson LJ undertook a review of relevant case law and restated the principles governing appeals from the TCC.  Continue reading →

REUTERS | Leonhard Foeger
November 13, 2018

I’ve been blogging for ten years as well

A couple of weeks ago, Matt wrote about his tenth anniversary of blogging for Practical Law Construction. He mentioned my blogging birthday was also coming up. At the time, I wasn’t sure if I’d do a 10th birthday blog, after all, with Matt and John Hughes-D’Aeth celebrating the 10th anniversary, what more could there be to say?

As Matt talked about issues affecting adjudicators, and John reviewed a few of the important cases he’d written about over the last ten years, I thought I’d consider a few of my blogging “highlights”. I make no apologies for what is (and isn’t) included. It really is a random selection from the last ten years and is intended to illustrate the diversity of topics I’ve touched upon. Continue reading →

REUTERS | Athar Hussain
November 12, 2018

Diversity of tribunals in construction disputes

This year, following the celebration of 100 years of women’s suffrage, and the first occasion where a female majority heard a Supreme Court case, we have seen a greater focus on diversity.

The legal sector has recognised that we should encourage and attract a workforce that exhibits a range of differences which include gender, sexual orientation, disability, culture and ethnicity. It is strongly argued that this is reflective of society and serves to achieve higher standards, fairness and efficiency.

The Construction Industry Council and organisations such as the National Association of Women in Construction have frequently reported that diversity is central to innovation in construction and the future of the sector. It is also well documented that a diverse workforce is of great benefit to growth, new ideas and also profit generation. Continue reading →

REUTERS | Yuri Maltsev
November 7, 2018

Implications of the Court of Appeal’s decision in S&T v Grove Developments

“Never has a Court of Appeal judgment been so eagerly awaited by the construction law community as the appeal in S&T (UK) Ltd v Grove Developments Ltd.”

I admit that this might be somewhat of an exaggeration, but I’ve certainly been keen to read it ever since I heard that Coulson J’s (as he was then) judgment was being appealed. I blogged about it at the time.

In a nutshell, S&T lost its appeal, with the Court of Appeal agreeing with Coulson J that:

  • Grove’s pay less notice complied with the requirements of the contract.
  • Grove is entitled to commence a separate adjudication seeking a decision as to the “true” value of its interim application, with the result that, contrary to ISG v Seevic, an employer can start an adjudication concerning the correct value of the sum due, and is not deemed to have agreed the valuation because of a failure to serve a payment or pay less notice.

Continue reading →

REUTERS | Esam Omran Al-Fetori
November 7, 2018

North Midland Building v Cyden: apportioning risk for concurrent delay in the UAE

In North Midland Building Ltd v Cyden Homes, the Court of Appeal held that parties to a construction contract are free to apportion risk in the event of concurrent delay. For more detail on that case, see my colleague, Alexandra Clough’s blog post, Concurrent affairs: North Midland Building Ltd v Cyden Homes.

Cyden (as employer) entered into a construction contract with North Midland (as contractor) based on the JCT Design and Build 2005 standard form contract. An amendment to clause 2.25.1.3 stated:

“(b) any delay caused by a Relevant Event which is concurrent with another delay for which the Contractor is responsible shall not be taken into account”.

One of the Relevant Events was “acts of prevention“ by the employer. In other words, clause 2.25.1.3 provided that, if the employer prevented progress of the works and caused delay, but the contractor was also responsible for a concurrent delay, the contractor would not be entitled to an extension of time. The Court of Appeal, upholding the first instance decision, held that such a clause is enforceable and does not offend any principle of English law, including the prevention principle. Continue reading →

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