All posts by Practical Law Construction

REUTERS | Kham
December 13, 2016

JCT payment changes and summary judgment

A few weeks ago I read with interest Peter Brogden’s blog on some of the key changes included in the JCT’s 2016 suite of contracts. Of particular interest were his comments on payment, where he identified three main changes, including how a “common valuation date” will operate across the supply chain. This obviously depends on every party using the appropriate JCT standard form contract or sub-contract, and not amending the payment clauses. I sincerely hope that parties are sensible and adopt the unamended versions of the new JCT contracts, but the pessimist in me anticipates that the temptation to amend will be too great.

Peter also noted another much smaller change, tucked away in clause 4.11.7 (at least in the SBC), namely that any unpaid amount and its simple interest “shall be recoverable as a debt”. Under the previous edition of the SBC it was only the final payment and interest that could be recovered as a debt, and not unpaid amounts arising from interim payments. As Peter noted:

“This opens up summary judgment as a faster means to get cash-flow moving on an ongoing project.”

It was that bit of his post that really got me thinking. Continue reading →

REUTERS | Brian Snyder
December 13, 2016

Email arrangements over Christmas and the new year

Following business as usual this week, Practical Law Construction will send its last email of 2016 next week, to arrive in your inbox on Thursday 22 December 2016. We are then taking a break until the new year.

The first email of 2017 will be sent to arrive in your inbox on Thursday 5 January 2017. This email will include reports of all developments since 21 December 2016, as well as Practical Law’s looking forward to 2017 pieces.

Merry Christmas and a happy new year from Practical Law.

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REUTERS | iStockphoto
December 7, 2016

Are oral variations worth the paper they aren’t written on?

The recent decision in Zvi Construction Co LLC v Notre Dame University (USA) in England has been commented on in terms of its decision on expert determination. However, there is more to that case. A key issue turned on the reliance that could be placed on a clause that prevented any variation (or waiver) of the terms of the agreement from being effective unless:

“it is in writing and signed by or on behalf of the party against which the enforcement of such modification, alteration or waiver is sought.”

I will refer to such a clause here as an “in writing” clause. The provision for expert determination was said to have been orally agreed and not recorded as required by that clause. Continue reading →

REUTERS | Amit Dave
December 6, 2016

Serial adjudication again

A couple of weeks ago I wrote about the judgment in Niken v Trigram and highlighted some of the issues that arise in serial adjudication. Just as I went to press (so to speak), the issue popped up again, this time in Imperial Chemical Industries Ltd v Merit Merrell Technology Ltd. It is a long-running dispute that I’ve looked at before, although then I was discussing the parties’ contract drafting and the question mark over which ANB and which adjudication rules applied to the parties’ disputes.

While in Niken v Trigram it was very apparent that the same dispute had not been referred to more than one adjudicator, in ICI v Merit, the point was not so clear cut (at least, not the way ICI argued it). Perhaps this time, it was less shades of grey and more a whiter shade of pale. Continue reading →

REUTERS | Michaela Rehle
November 30, 2016

November 2016 digest: Ch-ch-changes

David Bowie, Changes:

“I watch the ripples change their size
But never leave the stream
Of warm impermanence and
So the days float through my eyes”

The government’s appeal to the Supreme Court on Article 50 will not be heard until next month (and the outcome may not be known until early next year), and so it is pure speculation whether the 11 Law Lords will uphold the High Court’s decision, or decide something else. Either way, Brexit has caused a constitutional debate the like of which the country has not seen before, at least not in modern times.

While that outcome remains unknown, after the Autumn Statement, we know what the government’s plans are in the short term. It looks like it will be business as usual for the construction industry, with some big promises on infrastructure and housing spending but little of the detail (although separately, we heard about HS2’s route and the Cambridge/Milten Keynes/Oxford corridor). Continue reading →

REUTERS | Mukesh Gupta
November 30, 2016

Court of Appeal’s guidance on the Party Wall Act and basement construction

In Gray v Elite Town Management Ltd (unreported), the Court of Appeal considered a number of issues, including section 7(1) of the Party Wall Act 1996 in the context of a building owner’s basement works. The court concluded that there is no absolute obligation on party wall surveyors to authorise a design that causes the minimum of inconvenience to the adjoining owner. The duty under section 7(1) concerns the manner in which construction works are carried out and does not extend to the scheme chosen.
Continue reading →

REUTERS | Ilya Naymushin
November 29, 2016

Should I stay or should I pay now? Adjudication and insolvency

Before anyone objects, I know that I have lifted this title from a blog that Matt wrote in October 2013 but, quite frankly, when writing about stays can you think of a better title? I certainly can’t, so apologies to Matt (and The Clash) for the plagiarism.

When the party seeking to enforce an adjudicator’s decision is (or is thought to be) in financial difficulties, it is common to see the defendant argue that there should be a stay of execution of the summary judgment. The logic is that it will be unfair for the defendant to pay over money now, only to find that, following a final determination of the parties’ dispute, there is no money left to pay the defendant back. It may sound relatively simple but, as Coulson J says in his book (at paragraph 17.20) “this argument can be far from straightforward”.

However, it was an argument that the defendant raised when the matter came before Stuart-Smith J in LXB RP (Crown Road) Ltd v Squibb Group Ltd, albeit on this occasion the defendant sought an order that the money should be paid into court or into an escrow account. Continue reading →

REUTERS | Brendan McDermid
November 25, 2016

Time to party (over that wall) like its 1996

As the incredible rise of our transatlantic wall-building friend sets gently into the twilight of credulity, it provides us with an opportunity to get back to reality with the Party Wall etc. Act 1996 (PWA 1996).

The PWA 1996 remains something of an unusual beast. For an Act that features so heavily in a construction practitioner’s life, there remains very little case law on the subject and even less in the way of procedural guidance. As such, dealing with the PWA’s somewhat arcane drafting can feel like death by immurement.

The particular aspect of the PWA 1996 that I would like to pick up on today is enforcement and, more specifically, the procedure for enforcing payment of sums of money awarded under a party wall award. Continue reading →

REUTERS | Ilya Naymushin
November 23, 2016

But what about my adjudication costs?

Despite the relatively short timetables applied in adjudications, adjudication costs can still be substantial. Significantly, in the absence of an effective agreement to the contrary, the Construction Act 1996 is silent on the issue and makes no provision for the recovery of adjudication costs. Unsurprisingly, and perhaps because adjudication costs bills can become rather huge, over the years parties have deployed various arguments to try and recover their adjudication costs.

The question of adjudication costs can also become more complex where parties are engaged in parallel or contemplated parallel court proceedings. For example, where a party accepts a Part 36 offer, does it have to pay the related adjudication costs? It was this question that was considered recently by Coulson J in WES Futures v Allen Wilson. Continue reading →

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