Monthly Archives: August 2020

REUTERS | Peter Cziborra
August 26, 2020

When can contractual limitation of liability clause limit third party’s tort claim?

This was the question the court was asked to answer in RSK Environmental Ltd v Hexagon Housing Association Ltd.

Amidst the summer recess and the ongoing pandemic, the case may have slipped past many practitioners. However, it raised two valuable points:

  • First, a heavy-weight legal question: can parties be bound in tort by limitation clauses in contract, in circumstances where no contract exists and the tortious duty is not concurrent? In other words, if and how a contractual clause can limit a free-standing tortious duty.
  • Secondly, a point of procedure: in this case, was part 8 the suitable way of resolving the issue?

Spoiler-alert: O’Farrell J answered the second question in the negative, leaving the first question unresolved. That said, the court carefully reviewed the relevant case law, providing readers with an up-to-date consideration of an issue that (at least one party said) was not decided. Continue reading →

REUTERS | Mohammad Ponir Hossain
August 19, 2020

Calculating the final date for payment under a construction contract

It isn’t unusual to see one party start Part 8 proceedings asking the court to determine what the parties have agreed in their contract and to grant declaratory relief to that effect. In the adjudication enforcement context, we’ve seen it multiple times. Sometimes it feels like one party is “appealing” the adjudicator’s decision, since it is asking the court for a final determination on an issue it thinks the adjudicator has got wrong.

In Rochford Construction Ltd v Kilhan Construction Ltd, that is pretty much what Rochford did, since it refused to pay the sums the adjudicator awarded and, instead, issued Part 8 proceedings asking the court for a number of declarations, all of which (if successful) would have had the effect of reducing its liability to Kilhan to zero.

However, as is often the case when matters reach the TCC, things didn’t go quite to plan. Continue reading →

REUTERS | Kim Hong-Ji
August 12, 2020

Supplier beware: the CIGA 2020

The Corporate Insolvency and Governance Act 2020 (CIGA 2020) came into force on 26 June 2020 after a fast-tracked consultation process. Intended to provide a lifeline to struggling businesses during the COVID-19 pandemic and beyond, it consists of temporary measures, meant to alleviate the short-term disruption caused by the pandemic and permanent measures, which are more broadly designed to assist companies in times of difficulty.

But while it may sit more comfortably with “traditional” contracts for the supply of goods and services, it pushes against the legislation, measures and standard terms that have evolved to combat the inherent cash flow challenges present in the construction industry and protect supply chains.

The CIGA 2020 not only has a significant impact on the Construction Act 1996 but also requires updates to construction standard forms such as the JCT and NEC (explored further in this post and in Practical Law’s practice note on the CIGA 2020). These changes demand that parties upskill on what the new rules entail at a time when (arguably) they may have more pressing concerns.  Continue reading →

REUTERS | Heinz-Peter Bader
August 4, 2020

TCC refuses to strike out claim where smash and grab decision not paid

Summer felt like it had come early in May, but much of June and July served to remind us that we don’t live in the Mediterranean. Although summer has now most certainly arrived, the judges in the TCC are still hard at it. A recent judgment that caught my eye was O’Farrell J’s in Kew Holdings Ltd v Donald Insall Associates Ltd. In it, she ordered a stay of proceedings pending payment of an adjudicator’s decision. She also ordered the claimant to provide £600,000 security for costs, but rejected the defendant’s strike out application.

I’ve seen a few articles on the judgment, many focusing on the stay pending payment. However, given that the parties agreed to the stay, I think the more interesting issue is the strike out application and that is what I’m looking at today. Continue reading →

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