Monthly Archives: June 2020

REUTERS | Regis Duvignau
June 29, 2020

Growing old gracefully? – the Blackpool Tram saga

Long ago, as a kid growing up in what was then Lancashire, my parents took me for a ride on the Blackpool Tram. I well remember the clatter of the rickety old tramcar as it trundled along the promenade towards Fleetwood, its fading paintwork a sad reminder of Blackpool’s bygone heyday as a fashionable seaside resort.

I’m now old and rickety, but the Blackpool Tram has a new lease of life. In 2008 the Council embarked on an £85 million modernisation programme, including shiny new tramcars, track upgrades and a landmark new depot at Starr Gate. The depot was constructed by Volker Fitzpatrick (VF) under a design/build contract based on the NEC3 ECC. Completion was certified in May 2011 and the restored tramway came back into service in early 2012. Continue reading →

REUTERS | Clodagh Kilcoyne
June 24, 2020

Global supply chains in the COVID-19 era: 10 things we have learned so far…

With construction and infrastructure sites increasingly operative around the world, and most governments keen to lift lockdown restrictions more broadly across their economies, it seems like an opportune time to ask ourselves what we have learnt about supply chains during the unprecedented times (in peacetime at least) we have been journeying through, and what that might mean for construction and infrastructure supply chains going forward. It is not just the UK Government that has had to learn tough lessons on procurement and risk distribution in global supply chains.

International construction and infrastructure supply chains are complex. Some have proven resilient, while others have not. Construction lawyers understandably tend to focus on construction contracts, but construction and infrastructure supply chains descend far below the main and subcontract levels with which we are familiar. The problems and challenges encountered further down supply chains are the genesis of much of the time and cost pressures resulting in claims under those contracts on which we advise. The COVID-19 crisis has, of course, been the ultimate storm, impacting labour, logistics, distribution, and merchants both simultaneously and globally. Continue reading →

REUTERS | Issei Kato
June 24, 2020

Experts and conflicts of interest

It’s been a while since I last wrote about experts (last August to be exact, when I looked at “The good, the bad and the ugly” of expert witnesses). However, I couldn’t let the issues that cropped up in Essex County Council v UBB Waste (Essex) Ltd go without comment. If you read the judgment or, at least the relevant paragraphs (35-57), you’ll see what I mean. Continue reading →

REUTERS | Navesh Chitrakar
June 17, 2020

Supreme Court’s decision in Bresco is ground-breaking for construction insolvencies

The Supreme Court has handed down a judgment that will fundamentally affect construction insolvencies by allowing insolvent companies the unfettered right to start adjudications.

Today’s decision in Bresco Electrical Services Ltd (in Liquidation) v Michael J Lonsdale (Electrical) Ltd allows Bresco’s appeal from last year’s Court of Appeal decision. Pythagoras Capital acts, as it has throughout, for the liquidator of Bresco.

The decision firmly redresses the balance that was previously in favour of solvent construction companies and firmly against insolvent construction companies. It is a crucial development in a recent line of case law that recognises the importance of administrators and liquidators being able to recover debts owed to insolvent companies – using any mechanisms available.

From a public policy viewpoint, the decision could not have come at a better time. Given the current economic downturn caused by COVID-19, it is an unfortunate reality that there will be many more construction insolvencies in the coming months and years. Adjudication is a critical tool that has been denied to insolvent companies for too long. No longer. Continue reading →

REUTERS | Leonhard Foeger
June 17, 2020

URDG 758: finally tested and it does what it says on the tin

2020 is anything but normal. It is rare for there to be any judicial treatment of the ICC Uniform Rules on Demand Guarantees No. 758 (URDG 758) but 2020 has already brought us not one but two cases on its interpretation and applicability.

URDG 758 applies to all demand guarantees (commonly performance bonds or advance payment guarantees in the construction industry) that incorporate the rules. Despite being around for almost a decade, uptake and usage of URDG 758 has been patchy, which is often blamed on the rules not being sufficiently tested in the courts. 2020 court rulings may encourage users of demand guarantees, particularly in international construction projects, to now adopt URDG 758. Continue reading →

REUTERS | Hannibal Hanschke
June 11, 2020

TCC dismisses “no dispute” jurisdictional challenge to adjudicator’s decision

The TCC is continuing to pump out a large number of judgments despite hearings being conducted remotely due to the COVID-19 pandemic and, in May, no less than 13 judgments were published on BAILII.  By my reckoning you have to go back to October 2015 for such a number of judgments in one month. Perhaps remote hearings are working so well (for the judges at least) that we’ll see them continuing even after the lockdown restrictions are eased.

However, it’s a more recent judgment I want to focus on this week, namely the very clear and well written judgment by the new Judge in Charge, Mrs Justice O’Farrell DBE, in MW High Tech Projects UK Ltd v Balfour Beatty Kilpatrick Ltd. This was a Part 8 claim commenced by MW seeking a declaration that an adjudicator did not have jurisdiction to due to the dispute in question not having crystallised.

The “no crystallised dispute” jurisdictional challenge is one that I see quite frequently in adjudications, but it’s normally as a bolt-on to another challenge and not one that we often see reported in judgments from the TCC. My view is that this is because it is so difficult to make out a “no crystallised dispute” challenge, and this was one of the reasons the case caught my eye. The other reason is that it concerned new submissions concerning an extension of time, and this adds an interesting twist to the “no crystallised dispute” challenge under JCT contracts. Continue reading →

REUTERS | Russell Cheyne
June 3, 2020

Copyright in construction: some common queries

Questions about intellectual property rights routinely arise during construction contract negotiations and serve as a refreshing reminder that COVID-19 issues are not the sole focus of negotiations at the moment.

Copyright is one type of intellectual property right and is the area where we tend to encounter the most queries. This blog, the first in a series, takes a look at a few of the more common queries we regularly encounter on this topic. Continue reading →

REUTERS | Reuters
June 3, 2020

COVID-19 and variations

A great deal has been written about force majeure and change in law in the context of COVID-19. This blog considers as an alternative whether a contractor can recover time and/ or money as a contract variation, with particular reference to three standard form contracts – FIDIC’s 1999 Yellow Book, NEC4’s Engineering and Construction Contract and JCT Design and Build Contract, 2016 Edition.

We typically think of a variation as being a change to the permanent works and the COVID-19 crisis will have resulted in many instances of this type of change. For example, where a specified product is not available and needs to be replaced with something else – a situation most people in the construction industry are reasonably familiar with. Instead, this blog focuses on changes to the way the works are undertaken and whether this can be said to be a variation, entitling a contractor to additional monies. For example, as a result of changes to site procedures or methods of working.

It is useful to break this topic down into three separate points:

  • The need for an instruction.
  • The type of change that can qualify as a variation under a contract.
  • Whether the change is outside the contractor’s risk.

I will look at each of these points in turn before considering the ramifications of being able to claim compensation for increased costs arising from COVID-19 as a variation.  Continue reading →

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