Monthly Archives: February 2019

REUTERS |
February 26, 2019

The TCC applies S&T v Grove (with a twist)

The Court of Appeal’s judgment in S&T v Grove is still the most talked about construction case almost four months after it was handed down, which has much to do with the questions that parties and representatives raised about its practical implications. I discussed some of these implications shortly after the judgment was handed-down, and in particular the Court of Appeal’s finding that:

“… both the Act and the contract must be construed as prohibiting the employer from embarking upon an adjudication to obtain a re-valuation of the work before he has complied with his immediate payment obligation.”

I said at the time that:

“… it is quite clear that, despite section 108 providing a party with the right to refer a dispute to adjudication ‘at any time’, the Court of Appeal has found that there is a fetter on this right, namely that where an employer has not paid the notified sum in accordance with section 111, that employer is unable to refer a dispute concerning the correct value of the works to adjudication.”

In M Davenport Builders v Colin and Julia Greer, Stuart-Smith J has applied S&T v Grove, but with a twist that arguably dispels the conclusion that there is a fetter to the right to adjudicate. Continue reading →

REUTERS | Thomas Peter
February 20, 2019

Time bars under FIDIC 2017 – are more notices the answer?

Construction and engineering contracts often contain provisions specifying that, within a particular time, one party (traditionally the contractor) must notify the other (the employer and/or the contract administrator) of a claim or the likelihood that it might advance a claim. Sometimes these “time-bar” notice provisions are elevated beyond being merely an obligation, to the status of a condition precedent to being able to pursue a successful claim. If such provisions are enforceable, they can be severe: a failure to serve the required notice in the required timescale will be fatal, regardless of the merits of the underlying claim. A well-known example of such a provision is found in clause 20.1 of the 1999 FIDIC contracts.

Unsurprisingly, many contractors have found themselves needing to construct nuanced arguments to get around the “trap” of clause 20.1. As the default final dispute resolution mechanism in FIDIC contracts is arbitration, reported court decisions giving guidance on the specific language used are rare, although some (but most definitely not all) other widely-used standard forms contain similar provisions. There are, nonetheless, a stock of standard arguments that are typically deployed.  Continue reading →

REUTERS | David Gray
February 13, 2019

The primacy of insolvency law over construction law

With the Court of Appeal’s decision in Bresco Electrical Services Ltd v Michael J Lonsdale (Electrical) Ltd just a few weeks old, it is hardly surprising that people are looking again at the relationship between insolvency law and adjudication, noting that in cases of liquidation where parties have a cross claim, construction law defers to insolvency law.

This was clearly illustrated in Gregg Nowak Ltd v CSS Electrical Distributors Ltd, which came before HHJ Bailey earlier this month. Continue reading →

REUTERS | Wolfgang Rattay
February 12, 2019

Consequential corrections are covered by adjudicator’s slip rule

The slip rule is an essential part of the adjudicator’s toolbox, for situations when a mistake has crept into our decision or, as I put it back in 2011:

“It is a handy implied term for those occasions when adjudicators make a mistake.”

It took on statutory form in 2011 with section 108(3A) of the Construction Act 1996 and paragraph 22A of the Scheme for Construction Contracts 1998. Prior to this, we relied on a number of cases, including Bloor v Bowmer & Kirkland, O’Donnell Developments Ltd v Build Ability Ltd (where Ramsey J said the adjudicator must not be “giving effect to second thoughts or intentions but of giving proper effect to his first thoughts”), Redwing Construction Ltd v Wishart and YCMS Ltd v Grabiner (where Akenhead J said that the adjudicator’s mistake must be a “genuine slip which failed to give effect to his first thoughts”).

Over the years, I have looked at the slip rule a few times, most recently to consider Lady Wolff’s judgment in NKT Cables A/S v SP Power Systems Ltd, where she confirmed that it is there to enable an adjudicator to correct clerical or typographical errors, not to allow “changes to the reasoned or intended basis of the decision”.

I’m looking at it again today because, in Axis v Multiplex, Roger ter Haar QC held that, when used properly, the slip rule extends to consequential corrections.  Continue reading →

REUTERS |
February 11, 2019

Private AI – claims against approved inspectors

The extent to which property owners of a defective building have a valid claim against professionals with involvement in the development is a subject that has recently seen an upsurge in interest and litigation. In the past months two TCC judgments have been published that consider the particular role and potential liabilities of approved inspectors (AIs): Zagora Management Ltd and others v Zurich Insurance plc and others and Lessees and Management Company of Herons Court v Heronslea Ltd and others.

To the disappointment of property owners, and perhaps the relief of insurers, these cases demonstrate the difficulties claimants face in succeeding against AIs.  Continue reading →

REUTERS | Gilles Adt
February 6, 2019

Adjudication and insolvency – guidance from the Court of Appeal

Summer 2018 will be remembered as a special time by many readers of this blog: whether it was the spectacular weather, the giddy heights hit by the England football team, or Fraser J’s decision in Michael J Lonsdale (Electrical) Ltd v Bresco Electrical Services Ltd (In Liquidation), it was a summer to remember.

To recap on the latter, Fraser J granted an injunction preventing an insolvent contractor from pursuing an adjudication. The case was the subject of a considerable amount of commentary, including from my colleague Marcus Birch. Importantly, Bresco was in liquidation, rather than some other insolvency procedure. The case was seen as the death knell for the practice of liquidators bringing adjudications.

Perhaps understandably the decision of HHJ Waksman QC in Cannon Corporate Ltd v Primus Build Ltd received considerably less attention. In that case, the judge granted summary judgment and refused a stay of execution to an insolvent contractor in a company voluntary arrangement (CVA). In other words, a company in a CVA might (depending on the facts) still be able to refer matters to adjudication.

In a conjoined appeal, the Court of Appeal has upheld both decisions, and in doing so has provided some useful guidance on whether adjudication remains an option for insolvent companies. Continue reading →

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