All posts by Practical Law Construction

REUTERS | Russell Cheyne
August 2, 2016

Is applying for summary judgment an alternative to adjudication?

Think of a payment dispute under a construction contract and you usually think about adjudication. After all, it has become the method of choice for resolving construction disputes and was introduced primarily to deal with cash flow, often referred to as the lifeblood of our industry.

Therefore, in Volkerlaser Ltd v Nottingham City Council, I was a little surprised to see an unpaid contractor adopt a slightly different tactic, preferring instead to start court proceedings (presumably under CPR 7) and then apply for summary judgment on sums set out in its interim application for payment, and for which no payment or pay less notice had been served.  Continue reading →

REUTERS | Regis Duvignau
July 29, 2016

July 2016 digest: sporting moments and judgments abound

JRR Tolkien, The Fellowship of the Ring:

“‘So my plan is spoilt!’ said Frodo. ‘It is no good trying to escape you. But I’m glad, Sam. I cannot tell you how glad. Come along! It is plain that we were meant to go together. We will go, and may the others find a safe road! Strider will look after them. I don’t suppose we shall see them again.’ ‘Yet we may, Mr Frodo. We may,’ said Sam.”

The aftermath of the Brexit vote dominated the news again this month. We still don’t know when the Article 50 notice will be given (which triggers the two-year period for exit negotiations under the Lisbon Treaty), but we now know that Theresa May will lead the country during those negotiations. Francis Ho looked at some of the potential consequences for construction. Continue reading →

REUTERS | Jon Rousell
July 29, 2016

No green light to making exaggerated insurance claims but “gilding the lily” may be okay

With the Insurance Act 2015 set to come into force within the next two weeks, contractors will be turning their attention towards the new provisions to clarify their legal obligations under policies incepted after 12 August 2016.

In anticipation of these significant and wide-ranging reforms to insurance contract law, the courts have begun the task of interpreting the new provisions and, in doing so, have endorsed the legislative movement towards a re-balanced law of insurance that better serves the requirements of the modern insurance market.

Last week, in the landmark case of Versloot Dredging BV v HDI Gerling Industrie Versicherung AG, the Supreme Court considered the fraudulent claims rule as it applied to policies under the Marine Insurance Act 1906 and as it will apply to policies incepted under the 2015 Act. It decided that fraudulent devices or “collateral lies” advanced in support of an otherwise genuine claim will not have the effect of invalidating that claim. However, that is not to say that contractors should take this as an invitation to embellish their insurance claims without fear of consequence. It is only lies that have no bearing on the recoverability or amount of a claim that will disentitle the insurer to deny the indemnity. Continue reading →

REUTERS | Thomas Peter
July 29, 2016

Introduction to party wall issues

Building works and developments on or near a boundary between properties in differing ownerships provide an open invitation to numerous and much reported arguments and disputes. The Party Wall etc. Act 1996 (PWA 1996) contains a dispute resolution framework administered by impartial surveyors. It sets out statutory rules and regulations that give notice of proposed works and a procedure for both the building and the adjoining owner to follow before, during and after works are carried out.

This series will highlight common problems that a party wall surveyor experiences, provide practical hints and tips for both building and adjoining owners to assist the process and address some of the key issues we are often asked. Continue reading →

REUTERS | Reuters
July 26, 2016

Unintentional witness bias in court

A few weeks ago, I wrote about Harb v HRH Prince Abdul Aziz Bin Fahd Bin Abdul Aziz, and the Court of Appeal’s assessment of whether the trial judge, Peter Smith J, was biased against the Prince. As I said then:

“The Court of Appeal decided this ground of appeal should fail but, in doing so, it was extremely critical of the judge for his conduct, suggesting it was a ‘disgraceful letter to write’ and showed a ‘lack of understanding of the proper role of a judge’. However, the fact that he acted in such a ‘deplorable way’ was not a reason to allow the bias allegation to succeed.”

Since then, I have been sent a copy of the Houses of Parliament’s Postnote on unintentional bias in court, which is an interesting read. While it focuses on what it describes as “cognitive biases” and how to minimise their influence in the context of criminal trials, it makes a number of points regarding witness evidence that are worth sharing and could apply in most contexts, whether civil or criminal.  Continue reading →

REUTERS | Toby Melville
July 26, 2016

Direct payments to suppliers on a construction project

A client who is building a large mixed use development called me yesterday with a dilemma. He had received a letter from a local equipment supplier, who was on the verge of bankruptcy because the sub-contractor who had engaged him had gone into administration after the hire period had come to an end. He was pleading with my client to help him recover some £20,000 of hire fees still owed to him.

The supplier had already approached the main contractor (appointed by my client) who had refused to pay the outstanding hire fees, because it had already paid the (now insolvent) sub-contractor. The supplier suggested that my client surely must have a guarantee, bond or retention monies available to ensure that small local traders (like him) would get paid in circumstances like this? Why couldn’t my client pay the supplier and recover this from the main contractor? Continue reading →

REUTERS | Jitendra Prakash
July 25, 2016

Alliance contracting: breaking with tradition

This is the final post of a series of quarterly blog posts on alliance contracting and it looks at the extent to which alliancing has been adopted in particular sectors in the UK. It considers some of the key differences between traditional contracts, partnering agreements and “pure” alliancing contracts, and whether the perceived benefits of alliancing can be realised within a traditional contracting mind-set. Continue reading →

REUTERS | Neil Hall
July 19, 2016

Conditions precedent and the potential application of UCTA

The dust has had a bit of time to settle since Edwards-Stuart J’s decision in Commercial Management (Investments) Ltd v Mitchell Design and Construct Ltd, which was handed down in January.

Since then, the sub-contractor has been refused permission to appeal, and the litigation has now been settled. Despite this, the decision does raise some important points of principle for parties to contracts in our field of construction, but also in related commercial fields where claims control type provisions are prevalent, and specifically in relation to the potential application of UCTA. Continue reading →

REUTERS | Navesh Chitrakar
July 19, 2016

Court considers failure to complete standard form contract and section 106

We are all familiar with the section 106 residential occupier exception in the Construction Act 1996. Notwithstanding that exception, we are equally familiar with residential occupiers entering into building contracts that contain adjudication clauses and (probably) the most common of all the contracts used in this situation is the JCT’s Minor Works Building Contract.

Therefore, in Goldsworthy  (t/a Goldsworthy Builders) v Harrison, it wasn’t really much of a surprise to see the parties arguing about whether they had entered into the 2011 Edition of the Minor Works contract (MW 2011). If they had (as the claimants argued), there was a contractual right to adjudicate the parties’ payment dispute and the adjudicator’s decision could be enforced. If not (as the defendants argued), it wasn’t and it couldn’t be. Simple (or so you might think). Continue reading →

REUTERS | Yves Herman
July 12, 2016

No more cold comfort farm: the future looks bright for renewables

A few weeks ago I attended a roundtable discussion with Andrea Leadsom MP, energy minister at the Department of Energy and Climate Change, perhaps better known these days for her dashed Prime Ministerial ambitions. I was interested to hear what comfort Ms Leadsom could provide to renewables investors in view of the unknown political landscape for the sector.

Of course, comfort for renewables has been rather thin on the ground recently. Brexit aside, over the last year or so, the UK’s renewables sector has experienced a period of deep uncertainty. It’s probably fair to say that the current Tory government has so far been a lukewarm friend at best to this sector. Twelve policy decisions in the last six months of 2015 removing various incentives took the industry by surprise; the predictable end result being a nosedive in investor confidence. Continue reading →

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