All posts by Practical Law Construction

REUTERS | Esam Omran Al-Fetori
October 28, 2014

The Ebola crisis: knowing your force majeure provisions

The rapid spread of the Ebola virus in west Africa is already having an impact on projects and business activities there. As the virus spreads, so will that impact.

For example, in August, steel and mining company ArcelorMittal said that contractors working on one of its iron ore mines in Liberia declared force majeure and are moving people out of the country because of the outbreak. Governments and aid organisations are attempting to limit the spread of the outbreak but cases are being reported more widely in the region and beyond. Continue reading →

REUTERS | Amit Dave
October 22, 2014

Multi-tiered dispute resolution clauses. What are they? Why include them? Are they enforceable?

Many construction contracts (in common with other commercial contracts) now contain what are known as multi-tiered dispute resolution clauses. By these clauses, the parties agree at the outset on a number of stages of ADR before a party can commence proceedings in respect of a dispute. They can be relatively straight-forward (single-step) procedures that simply require a negotiation or mediation. Or, they may be more complex and consist of a series of meetings between increasingly senior representatives of the parties, followed by mediation and/or some other form of ADR. Continue reading →

REUTERS | Srdjan Zivulovic
October 21, 2014

A good use of Part 8 in adjudication

In the long, slow days of the summer court recess, it was interesting to read Ramsey J’s judgment in Hurley Palmer Flatt v Barclays Bank plc.

From my perspective as an adjudicator, the judgment demonstrates a good use of CPR Part 8 during an adjudication and, as we rarely see the Third Party Rights Act 1999 before the courts, some may even consider it a bit of a treat! Continue reading →

REUTERS | John Kolesidis
October 21, 2014

The role of experts in adjudication

Should we be able to take it for granted that an expert providing a report for use in an adjudication is required to act independently or do we need to put safeguards in place to ensure that the adjudicator is not misled by a partial expert?

This is the question I found myself pondering after reading HH Francis Kirkham CBE’s report prepared following the Society of Construction Law’s consultation into the use of experts in construction disputes. Continue reading →

REUTERS | Ina Fassbender
October 15, 2014

Topical issues experienced at the coal face of adjudication practice

BLP and Crown Office Chambers recently hosted a workshop on behalf of the Adjudication Society. The informal and interactive format proved to be a hit with the Society and its members.

The event was attended by the full range of professionals from the construction industry, giving rise to some lively and topical discussions on the issues experienced at the coal face of adjudication practice. Two of the topics that sparked most interest and which I wanted to share were:

Most readers will spot some old favourites that are still causing a few headaches, and also some newer issues that have been building to a crescendo more recently. Continue reading →

REUTERS | Tobias Schwarz
October 15, 2014

Why try to resolve a neighbour dispute using mediation?

The courts have long urged neighbours to seek to resolve disputes by using mediation. Indeed in Bradford v James (a boundary dispute), Mummery LJ said that parties should attempt mediation at the beginning of the dispute:

“…and certainly well before things turn nasty and become expensive. By the time neighbours get to court it is often too late for court-based ADR and mediation schemes to have much impact. Litigation hardens attitudes. Costs become an additional aggravating issue.”

Further, Jackson LJ said in Faidi v Elliot Corporation (a noise case):

“…before embarking upon full blooded adversarial litigation parties should first explore the possibility of settlement. In neighbour disputes of the kind now before the court…if negotiation fails, mediation is the obvious and constructive way forward.”

A recent judgment suggests we are one step closer to seeing a standard order for mediation. Continue reading →

REUTERS | Jason Lee
October 14, 2014

Expert determination cases are a bit like buses as two come along together

The English language is full of phrases and idioms in everyday use. A few that spring to mind include it’s raining cats and dogs, on a wing and a prayer, horses for courses, pillar of strength and all sweetness and light. We all use them and we all understand what they mean, even if they may appear nonsensical to an outsider.

Another phrase that is often used refers to buses and how you can wait ages for one and then three turn up together. I often think case law is a bit like buses. Just after I had finished writing about Shafi v Rutherford, I read another Court of Appeal judgment on expert determination (Premier Telecom Communications v Webb). This time, in contrast to Shafi (where Floyd LJ held that the expert’s determination was invalid and unenforceable), Moore-Bick LJ held that the expert’s determination was binding as the expert had not departed from the mandate. Continue reading →

REUTERS | David Mdzinarishvili
October 8, 2014

Penalties: a genuine re-estimate of loss?

As a solicitor in private practice, I am routinely subjected to training on anti-money laundering rules. These courses place you in hypothetical scenarios and offer you multiple choice questions, such as should you (a) run screaming to the Police and national press; (b) ignore your suspicions and pocket the fees; or (c) have a quiet chat with the firm’s MLRO? The recent case of Unaoil Ltd v Leighton Offshore Pte Ltd not only presents a fascinating “real-life” version of one of these training scenarios, but also raises a new line of attack for parties challenging liquidated damages (LDs).  Continue reading →

REUTERS | Stefan Wermuth
October 8, 2014

TCC decides unreasonable refusal to mediate but for other reasons imposes no costs sanction

In Northrop Grumman Mission Systems Europe Ltd v BAE Systems (Al Diriyah C4i) Ltd, BAE successfully argued that its interpretation of a licensing agreement was correct. Northrop then argued that BAE’s costs should be reduced by 50% because BAE had unreasonably refused to mediate. While Ramsey J found that BAE had unreasonably refused to mediate, for other reasons, the court awarded BAE its costs on the standard basis without any reduction.

This decision is important because:

  • It re-emphasises the danger of refusing to mediate.
  • It directs parties (again) to the guidance in the ADR Handbook.
  • It says that when considering the “prospects of success” of an ADR process, the court should not just look at the positions taken by the parties.

Continue reading →

REUTERS | Sean Yong
October 8, 2014

Mitigation and the reasonableness of a settlement agreement

In Rentokil Initial 1927 plc v Goodman Derrick LLP, the court revisited the issue of mitigation which I commented on in August. This time the context was somewhat different as the point arose in relation to a solicitor’s negligence claim where the claimant had resolved remedial arbitration proceedings that it had launched, seeking to recoup its losses due to alleged negligence in drafting a sale agreement. Indeed, it spent some £600,000 on costs in the arbitration, which it claimed as damages. Notwithstanding this expenditure, the arbitration was compromised, apparently as a commercial deal without regard to the merits of either party’s case. Continue reading →

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