In Interserve Construction Ltd v Hitachi Zosen Inova AG, the court was asked to interpret the termination provisions of a contract to determine whether there was a condition precedent clause. Continue reading
REUTERS | Denis Balibouse
REUTERS | Leonhard Foeger
November 14, 2017
How testing the evidence differs in adjudication and court
When I read Fraser J’s judgment in Riva Properties Ltd v Foster + Partners Ltd, the thing that struck me was how, in adjudication, we don’t always get the benefit of seeing the evidence tested to the same degree as you do in court or arbitration proceedings. Continue reading
REUTERS | Denis Balibouse
November 7, 2017
2011 amendments to Construction Act 1996 are under review
On 1 May 2018 it will be 20 years since the Construction Act 1996 came into force. I think it is fair to say that, despite initial reservations by some about its introduction, most people would agree that, overall, the statutory adjudication and payment provisions have been successful. That said, like any adolescent, its teenage years have been somewhat difficult, which is mainly down to the 2011 amendments (introduced by Part 8 of the LDEDC Act 2009) to both the Act and the Scheme for Construction Contracts 1998.
Therefore, I was delighted to receive an email from a friend a couple of weeks ago letting me know that the Department for Business, Energy & Industrial Strategy (BEIS) had published a consultation on the 2011 amendments. The consultation can be accessed here and you have until 19 January 2018 to submit your thoughts.
Not only that, but the government has also published a consultation on the practice of cash retention under construction contracts (with the same January deadline). Although it is a very relevant and worthwhile consultation, it is the consultation on the 2011 amendments that I want to focus on today. Continue reading
REUTERS | Vijay Mathur
In Adam Architecture Ltd v Halsbury Homes Ltd, the Court of Appeal has confirmed that section 111 of the Construction Act 1996 (and the requirement to serve pay less notices) applies to payments due following completion or termination of a contract, as well as interim payments.
In giving the leading judgment, Jackson LJ said he reached this conclusion based on the clear words in the Act and in light of the authorities (of which, see below). Consequently, employers (and their agents) need to be alive to the need to serve a pay less notice in response to any such account if they wish to avoid the prospect of an adjudicator’s decision against them for the full amount claimed. Continue reading
REUTERS | Juan Carlos Ulate
November 2, 2017
Are payment provisions working in Scotland?
Payment in the construction industry is regulated by the Construction Act 1996, as amended by the LDEDC Act 2009. One of the reasons behind the introduction of the Construction Act 1996 was to ease cashflow and speed up payment. However, it has to be questioned whether this aim has been achieved (and I note this is the sort of issue raised in the English consultation on the Act, which was published last week). Continue reading
REUTERS | Christian Hartmann
November 1, 2017
Direct procurement: factors for investors to consider
This is the second blog in our series on direct procurement. In this blog we consider the rise of investor interest in direct procurement projects and some of the headline legal and regulatory factors which they would do well to bear in mind before getting involved. Continue reading
REUTERS | Jacky Naegelen
October 31, 2017
October 2017 digest: Construction Act review and B&PCs
Francis Bacon, The Essays:
“Read not to contradict and confute; nor to believe and take for granted; nor to find talk and discourse; but to weigh and consider. Some books are to be tasted, others to be swallowed, and some few to be chewed and digested: that is, some books are to be read only in parts, others to be read, but not curiously, and some few to be read wholly, and with diligence and attention.”
October has been a busy month, with lots of interesting developments, not least a consultation to review the Construction Act 1996 and one to review the use of retentions in the construction industry. We’re not sure if anyone else remembered the government’s promise to review the effectiveness of the changes introduced in October 2011 after five years (and it has taken them six), but it will be interesting to see the results. You have until 19 January 2018 to respond, just a few months before the Act celebrates its 20th “in force” birthday. Continue reading
REUTERS | Jonathan Drake
October 31, 2017
Is the notice an adequate agenda for an adjudication?
When it comes to the adequacy or otherwise of a pay less notice under the Construction Act 1996, I was reminded the other day of something that Alexander Nissen QC (sitting as a Deputy High Court judge) said in Surrey and Sussex Healthcare NHS Trust v Logan Construction (South East) Ltd, namely that it is a question of whether the documents supplied can provide “an adequate agenda for an adjudication“. If there is nothing more the contractor needs to know when it receives documents from the employer (or its agent), then it can. Alexander was borrowing his words from Akenhead J in Henia Investments Inc v Beck Interiors Ltd, and I’m going to borrow them for the purposes of this post.
I mention this because of Lord Bannatyne’s judgment in Muir Construction Ltd v Kapital Residential Ltd. Continue reading
REUTERS | Issei Kato
October 30, 2017
Contributory negligence and construction contracts
A plethora of issues were raised, and disposed of, by Fraser J’s recently handed-down judgment in Riva Properties and others v Foster + Partners Ltd, the most awkwardly entertaining one being the sense of pantomime arising from the court’s clear disapproval of the architect’s behaviour, which was described at various stages as “grubby”, “disingenuous” and “wholly unprofessional”.
Putting pantomime reluctantly to one side (or perhaps “behind you…”), the crux of the case was that Fosters had been negligent when they advised their client that a design that would cost £195 million to carry out and complete could be “value engineered” down to £100 million, a mere £25 million more than the client’s original budget of £75 million. The expert evidence was that such value engineering would have been impossible and the judge awarded the claimant, or at least the first claimant, just over £3.5 million for the professional fees wasted on account of the negligence advice. The rather heftier claim for loss of profits (around £16 million), was dismissed on the basis that the claimant’s inability to secure funding for the project was partly attributable to his lack of cash reserves and to the 2008 global financial crisis.
However, I want to turn my attention to a relatively small aspect of the judgment concerning the defendant’s plea of contributory negligence and take the opportunity to remind us when it is possible to raise contributory negligence in the context of construction claims. Continue reading
REUTERS | Thomson Reuters Global Creative Services
October 27, 2017
The value of obiter in the TCC
Melissa Moriarty’s recent blog post covered the complex subject of delay. It also touched on something seemingly simple: the difference between the ratio and obiter elements of a judgment. So how is it that lawyers manage to disagree about this elementary distinction and why does it matter? Continue reading
