All posts by Practical Law Construction

REUTERS | Stefan Wermuth
January 8, 2019

Do liquidated damages survive termination? (answer in no more than 1000 words)

Whether liquidated damages (LDs) can be claimed after termination is a question which comes up regularly. It is very relevant in the current climate where contracts are often terminated following contractor insolvency. If I were devising a construction law exam paper, this classic question would undoubtedly appear.

An unlucky student sitting my imaginary exam paper might start with the recent case of GPP Big Field LLP v Solar EPC Solutions. This case concerned five EPC contracts relating to solar power generation plants in the UK. The contractor became insolvent and GPP (the employer) sued the parent company of the contractor as guarantor/indemnifier of the contractor’s obligations under four of the EPC contracts. Continue reading →

REUTERS | Heinz-Peter Bader
January 2, 2019

My 2019 wish list

Firstly, and most importantly, a Happy New Year to you all!

As regular readers to this blog will know, in our first piece each year Matt or I like to set out our construction law wish list for the coming 12 months. I don’t know whether it’s been caused by over indulging in turkey and Christmas pudding, but I’ve been struggling to come up with my list, so I decided to refer back to the last list I wrote in 2017 for some inspiration. Continue reading →

REUTERS | David Mdzinarishvili
December 18, 2018

With friends like these…Burgess v Lejonvarn: Christmas cheer for construction professionals

As we all get into the festive spirit you may well find yourself chatting to family or friends about their latest project. Some may ask for your opinion or advice. But don’t get carried away; remember the cautionary tale of Burgess v Lejonvarn before offering any free advice. Continue reading →

REUTERS | Stephen Hird
December 12, 2018

What to give a client for Christmas? Or risk allocation and contract management

“You can’t always get what you want, but if you try sometimes you might find you get what you need.” Or so the song goes. It’s good advice in the run-up to Christmas, lest a lovingly gift-wrapped jumper fails to meet with your immediate approval.

So, as the festive season looms, what goodies are stacked in the aisles of the Construction Land Pop-up Store? And which of them is worth snapping up for our significant others (I’m thinking here of clients and contractors)? The choice is legion, so I shall pick out only a few of my favourite things. Continue reading →

REUTERS | Kim Hong-Ji
December 11, 2018

My adjudicator mentoring scheme

Earlier this year, I wrote about how I thought it was time for some form of mentoring or shadowing scheme to be introduced to enable budding adjudicators to gain exposure to the practical and real-life issues that adjudicators experience and to be able to discuss those issues as part of their development.

I referred to the difficulties for individuals in gaining the experience they need, and drew an analogy with the chicken and egg:

“… gaining admission onto the adjudicator panels or getting your first appointment is even more difficult than it was 20 years ago. This is reflected in the fact that some panels require applicants to have sat as an adjudicator and produced, say, three decisions before they will be considered for inclusion. “

If you are not on a panel, how to do you get experience? If you are inexperienced, how do you get nominated? In those circumstances, what chance do you have of producing a decision (let alone three) that would allow you to be considered for inclusion? Continue reading →

REUTERS | Paulo Whitaker
December 5, 2018

Nottingham Forest 1 – 0 Entire Agreement

A recent decision from the Chancery court offers some helpful guidance on the interaction between entire agreement clauses and claims for misrepresentation. Many practitioners may be under the impression that an entire agreement clause has the effect of defeating a claim in misrepresentation. However, this case shows that is not necessarily the case.

If parties wish to exclude the right to claim for misrepresentation, clear language to that effect will be required. While Al-Hasawi v Nottingham Forest Football Club Ltd [2018] EWHC 2884 is not a change to the law, it is a helpful reminder of how these clauses are interpreted.  Continue reading →

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 →

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