Last time, Jonathan talked about some of the lessons he’s learned while resolving disputes remotely. I thought I’d follow that with a few thoughts on the remote training that I’ve been doing this year (for obvious reasons) on the topic of expert determination.
When a project goes so poorly that an employer feels obliged to terminate its main contractor, the employer will often take an assignment of various sub-contracts. But what exactly does it mean to “assign a sub-contract”?
Of course, the employer may also claim against the main contractor for delay damages, additional costs to complete and so on, and the main contractor may wish to pass down its liability to the sub-contractor(s) whom it blames for the problem. But can it do so?
These questions, and more, were addressed by O’Farrell J in the recent TCC case of Energy Works (Hull) Ltd v MW High Tech Projects UK Ltd. Continue reading
In 2015, one of the hot topics of the day (at least in construction circles) was the case of Galliford Try Building Ltd v Estura Ltd, where the TCC unusually ordered a partial stay of an adjudicator’s decision on the basis that to enforce the decision in full would result in “manifest injustice” to the paying party. There was a concern that the case would encourage a flurry of cases seeking to test the boundaries of that principle.
Indeed, since Estura, various attempts have been made to seek a stay on grounds of manifest injustice, but rarely have these cases been successful. This was not to be unexpected; the failure to secure a stay on the basis of “manifest injustice” simply emphasised the exceptional nature of the decision in Estura.
However, the recent case of JRT Developments Ltd v TW Dixon (Developments) Ltd is an example of where the TCC decided to buck the trend and follow Estura. In that case, the court ordered a stay of enforcement of a £1.15 million smash and grab adjudication decision obtained by JRT Developments Ltd (JRT) on the basis that in the “exceptional circumstances” of the case, there would be manifest injustice to TW Dixon (Developments) Ltd (TWD) if the judgment was not stayed.
In reaching that conclusion, the court considered “all of the circumstances of the case” and therefore took into account factors beyond those that had been identified in Estura as relevant. These factors included, significantly, the factual context in which JRT had submitted its payment application, which resulted in an adjudicator’s decision in its favour, and the nature of the sums claimed in that application. Continue reading
I appreciate that the title of this blog may have put some people off, partly because they’ve had enough of reading about this frankly horrible pandemic, and partly because much ink has already been spilled on the issues arising from the resolution of disputes during it (including by Matt in earlier blogs). However, for those of you still reading, I want to assure you that this is not intended to be a detailed guide, but rather a summary of a few lessons I have learned, in some cases the hard way.
I’ve intentionally referred to “resolving disputes” as many of these lessons have been learned conducting arbitrations during the pandemic, as well as adjudications. I’ve not yet conducted a mediation during the pandemic, so that will have to wait for another day. Continue reading
In this challenging economic climate, contractors are striving to keep their businesses afloat. Healthy cash flow is key and a major barrier to achieving this can be the slow release of (or indeed the failure to release) retention.
The idea of a retention in theory is simple: a way of incentivising the contractor to return to site to remedy outstanding defects and/or complete the project. If it fails to do so, the employer is not left high and dry. Provision for retention is routine in a number of standard forms including many in the JCT family and in NEC4 Option X16.
But, as with many good ideas, the problem comes with their operation in practice. The February 2020 summary of responses to the BEIS 2017 consultation on the practice of cash retention under construction contracts makes a sobering read. It highlights unfair practices surrounding retentions in certain corners of the industry. Continue reading
Hot on the heels of the Supreme Court’s decision in Bresco Electrical Services Ltd v Michael J Lonsdale (Electrical) Ltd, in what may be the first summary judgment to enforce an adjudicator’s decision in favour of a party in administration, we have successfully represented the claimant in Styles and Wood Ltd (in administration) (S&W) v GE CIF Trustees Ltd.
Relying on the Supreme Court’s judgment in Bresco, S&W argued that the insolvency set-off rules did not trump a construction contract party’s right to adjudicate. Further, S&W proposed to fulfil the conditions of enforcement, as set out in Meadowside Building Developments Ltd (In Liquidation) v 12 – 18 Hill Street Management Co Ltd, with the joint administrators undertaking to ringfence the sum the adjudicator awarded and providing an ATE insurance policy to cover any potential adverse costs order in subsequent final determination proceedings.
The court accepted these arguments and decided in favour of S&W.
