I read the decision in Ziggurat with some incredulity. I hadn’t intended to trespass on Karen Spencer’s territory, and overall I’d agree with her conclusion that the amendments made to the ABI form seem to have confused rather than clarified matters. I’d also agree with Roddy Cormack’s comment that more radical surgery is needed if … Continue reading Ziggurat: the crumbling edifice of surety bonds
Nearly 20 years after the Construction Act 1996 was introduced to stamp out bad payment practices, you would be forgiven for thinking there must be a voluminous pile of case law in relation to the all-important final account. But you would be disappointed. While there is plenty of guidance from the TCC on interim payments, the … Continue reading Final account payments: welcome guidance from the TCC
Where there’s smoke, there’s fire. That might be a self-evident feature of a fire, but what can be far harder to establish is what caused the fire in the first place. This is the challenge the courts face in fire disputes, whether on construction projects or otherwise, where the evidence you would normally rely on … Continue reading No smoke without fire
The recent decision in Riva Properties Ltd v Foster + Partners Ltd, considers the duties that an architect owes to its client, specifically in the context of working in accordance with the client’s budget. Helena White and Matt Malloy have recently written about issues of contributory negligence and evidence arising out of the case. One … Continue reading A cautionary tale on the importance of client service
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.
Building information modelling (BIM) has been steadily gaining traction in the construction industry over the past few years and the prediction back in 2011 from the UK Government’s Chief Construction Adviser, that professions which failed to adopt BIM risked being “Betamaxed out” is ringing eerily true. And it’s not only centrally procured projects that are … Continue reading Injunction prevents consultant holding client to ransom on BIM
On the face of it, the judgment in North Midland Building Ltd v Cyden Homes Ltd is one to which you might say “so what”? The parties agreed in their contract to disregard the effect of any concurrent delay in assessing the contractor’s entitlement to an extension of time. Surprise surprise, the court gave effect … Continue reading Another “nail in the coffin” for the prevention principle?
The TCC’s recent decision in The Royal Devon and Exeter NHS Foundation Trust v ATOS IT Services UK Limited demonstrates how claimants can, in certain circumstances, claim their wasted expenditure in a way that gets around contractual exclusion of liability clauses.
Historically, companies in regulated sectors like electricity, water and rail have carried out the design, build, financing and operation of their own projects. Recently, there has been much talk of a concerted shift away from this practice, as regulators look to replicate the efficiencies of competitive markets. Why? Because various sector regulators see the introduction … Continue reading Direct procurement: the story so far
The Supreme Court’s decision in MT Højgaard A/S v E.On Climate and Renewables UK Robin Rigg East Ltd has spawned a predictable welter of case notes and commentaries. Legal luminaries have analysed Lord Neuberger’s judgment from a variety of angles, noting that the contractor (Højgaard) was held to be under a “double obligation” to comply with … Continue reading Losing the sympathy vote: Robin Rigg revisited
Compared to Dubai, Abu Dhabi, capital of the UAE, can seem like a poor relation. However, Abu Dhabi is rapidly catching up. In this post I look at three recent developments which show that Abu Dhabi is emerging as a jurisdiction to give Dubai a run for its money.
As everyone who is anyone knows, the NEC4 suite was launched in London last month. The event on 22 June was quite a draw: I can’t recall our clients ever before attending in such numbers the official unveiling of a standard form contract. That is usually a niche pastime. It is testament to just how … Continue reading NEC4 and standard form sociology
To be is to be perceived. The 18th century philosopher George Berkeley found himself pondering whether a tree still exists if there is no-one to perceive it. In the recent case of Glen Water v Northern Ireland Water a similar question came up regarding notices. Can a letter be a notice if neither party perceived … Continue reading Glen Water and the unintended notice that nobody noticed
It is quite difficult to explain to a non-lawyer why the decision in Persimmon Homes Ltd and others v Ove Arup & Partners Ltd is important. After all, didn’t the Court of Appeal simply decide that the exclusion clause in question means what it says? But to lawyers, who read exclusion clauses through a prism … Continue reading Exclusion clauses in commercial contracts: the contract is king
Big sheds (by which I mean warehouses, logistics hubs, fulfilment centres and the like) are hot property right now. Industrial floor space is in short supply due to the slowdown in construction during the last recession, and demand is exceptionally high due to the rise of e-commerce and online retailers promising ever-shorter delivery times. Recent … Continue reading Rise of the “big sheds”: construction of industrial floor space
The FIDIC Client/Consultant Model Services Agreement (fourth edition, 2006) – usually known as the White Book – was a rather frustrating form for lawyers. Happily, the new White Book (fifth edition, 2017) addresses some of the frustrations and is a more balanced starting point. The form was particularly frustrating for those advising employer clients, who … Continue reading FIDIC White Book: A step in the right direction
A couple of years ago I blogged about the Court of Appeal’s decision in Gard Marine and Energy Ltd v China National Chartering Company Ltd, a rather complicated charterparty case. In that blog I noted that the Court of Appeal agreed with my view that insurance and subrogation can be a tricky business. The Supreme … Continue reading Joint insurance and rights of subrogation revisited
It has been almost a month since electronic working became compulsory for professional users of the Rolls Building courts, soon to be called the Business and Property Courts, which Paul Darling OBE QC discusses this week. This has come as a shock to many people, although we have been using the scheme for nearly two years … Continue reading Compulsory electronic working in the Rolls Building: time to reflect
In Lejonvarn v Burgess, the Court of Appeal upheld the first instance decision (which Oliver Pearson blogged about) that an architect/project manager providing services gratuitously and in the absence of a contract owes a tortious duty to exercise reasonable skill and care in performing those professional services. The Court of Appeal also clarified the relevant test … Continue reading With friends like these… Lejonvarn v Burgess: the parable for construction professionals continues
A couple of years ago, in a post called Guilty as charged? Or how to get rights wrong, I queried the common practice of an employer assigning its rights under the project documents (building contract and appointments) to its funder. Surely the person who needs to enforce these rights is the employer? The interests of … Continue reading Assignment: rights about turn?
Things are not always what they seem. While in one sense, the UK is busy disconnecting itself from Europe with the advent of Brexit, in another sense it is quite literally becoming more connected than ever through the growth of the electricity interconnector market. This post takes a look at this fast rising market and … Continue reading Key construction risk – interconnectors
Everyone knows that NEC contracts are different. Their fans and detractors are both quick to tell us. And no NEC clause is quite so eye-catching as clause 10.1. Famously it says (in its ECC form): “The Employer, the Contractor, the Project Manager and the Supervisor shall act as stated in this contract and in a … Continue reading NEC: A spirit of mutual trust and comprehension?
Choose life. Choose a job. Choose a career. Choose a £128 million hydroelectric scheme in the Scottish highlands, with a five mile tunnel running through the Conagleann Fault Zone, drilled by an enormous machine the locals affectionately nick-named “Eliza Jane”. Choose NEC ECC, Option A, design and build. Choose a tunnel collapse eight months after … Continue reading Design liability under NEC: lessons from the Scottish courts
It is hard to believe that the CIC Consultants’ Contract was published nearly 10 years ago. Having been involved in its gestation, I am only too keenly aware of the compromises that were needed to create a form that was acceptable to the CIC’s constituent bodies, while also (mainly) meeting the needs of commercial developers … Continue reading ACE professional services agreement: does the house of cards stack up?
While speaking to a client last week, I had an odd feeling of deja vu; I’m sure you have all experienced it at some point. I was listening to a client recalling a recent conversation with their construction director. Currently at the end of the first stage of what they had hoped would be a … Continue reading In vogue again: construction management
The beauty of an on demand bond or standby letter of credit is that the beneficiary can call the security instrument and pocket the money without having to prove that the contractor (or sub-contractor) is actually in default or owes the money. It is a separate, independent agreement between the beneficiary and the provider of … Continue reading “Mens rea” in calls under on demand security instruments
A developer client of mine recently asked me about “guaranteed maximum price” contracts. He had heard mention of them, was keen to keep overspends on his project to a minimum and was under the impression that they would set the contract sum in stone. Thinking this sounded too good to be true, he asked me … Continue reading Guaranteed Maximum Price contracts: do they do what they say on the tin?
It was only to be expected. Hard on the heels of FAC-1 (the framework alliance contract published by the Association of Consultant Architects, the group responsible for PPC2000) comes a guidance note from the NEC brigade, issued in liaison with the Infrastructure Client Group. It patiently explains that NEC3 offers an “ideal” (translation: “better than … Continue reading A brave new world? Implementing “alliancing” using NEC3
There was a full house at the FIDIC International Contract Users’ Conference 2016 which took place in London on 6 and 7 December 2016. The FIDIC conferences always attract a large international audience. However, this year there was an additional draw; a special pre-release version of the second edition of the FIDIC Yellow Book was unveiled.
A client recently asked me to draft a professional appointment for an artist who was designing, creating and installing some public artwork at the client’s new development. This turned out to be more complex than I expected.
I met with a client last week to talk over some issues that they are having on some long term consultant framework agreements where they are the “employer”. One particularly thorny issue is that instructions to proceed with a specific call-off under the framework are often resulting in fresh negotiations on the terms of the … Continue reading Collateral warranties: you can lead a horse to water…
Is it really 16 years ago that we users of the TCC first came face to face with the Pre-Action Protocol for Construction and Engineering Disputes? And for all those years most of us have been extolling its virtues as a great tool to assist early settlement of disputes and yet in the same breath … Continue reading Long live the Pre-Action Protocol
Hong Kong is a dynamic and innovative city, identifiable by its skyline dominated with densely packed skyscrapers. It is known for its expertise in construction of high-rise buildings and complex projects and is increasingly in demand to export its expertise to overseas markets. In this blog post I look at the legal developments that are moulding … Continue reading The changing landscape of construction law in Hong Kong
In O’Hare and another v Coutts & Co, the High Court moved away from the “Bolam” test for professional negligence claims (by reference to what a responsible body of professionals would do), at least in respect of financial advisers alerting their clients to investment risks. Does this suggest a change is coming in assessing negligence claims against … Continue reading Professional negligence claims: a change of direction?
It struck me the other day that, of the vast number of adjudications I have been involved in over the last 12 years, only once has a female adjudicator been appointed. So I asked my colleagues whether my experience is typical. It is.
As an Australian-qualified lawyer, any judicial mention of “good faith” in the English courts piques my interest. Australian courts readily imply broad duties of good faith into commercial contracts. By contrast, you don’t need to look further than Chitty on Contracts, Vol 1 (Sweet & Maxwell 32nd ed, 2015), paragraph 1-039, to find that “in … Continue reading Court of Appeal quells hope of an organising principle of good faith in English law
I have recently been reading the dire predictions of legal futurologist, Richard Susskind, once more claiming that lawyers’ days are numbered and that pretty soon computers will take over the world. For my sins, some of my youth was spent gently snoozing through lectures on inference engines, fuzzy logic, and learning computer systems. One thing … Continue reading The continuing case for wetware solutions in the provision of legal services: vampires and the experienced contractor
One of our clients was recently surprised to see a consultant engineer request a complete exclusion of liability relating to terrorism. Could this be correct, especially for a project in central London? In many cases, shouldn’t designing to take account of terrorism, unpredictable and callous though it is, be an essential part of the professional … Continue reading Excluding liability for terrorism
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 … Continue reading Direct payments to suppliers on a construction project
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 … Continue reading No more cold comfort farm: the future looks bright for renewables
The Society of Construction Law (SCL) has recently issued a consultation draft of the second edition of its Delay and Disruption Protocol (Protocol). The object of the Protocol is to provide guidance on some of the common delay and disruption issues that arise on construction projects. Its stated purpose is to provide a means by … Continue reading Concurrency and the SCL delay and disruption protocol: all together now
As Brexit fears abound, the general consensus seems to be that the UK property market has peaked and is showing signs of cooling down. Some blame the spectre of a “leave” vote in the forthcoming referendum but predict a return to “business as usual” if the UK votes to remain. Others, with a focus on … Continue reading UK property market: a peek behind the fig leaf
In the run up to 23 June 2016, there is a danger that the UK is so caught up in the throes of Brexit that it ignores news of exciting opportunities further afield. One such opportunity is the Chinese “Belt and Road” initiative (also known as One Belt One Road or OBOR). This initiative, which is … Continue reading The Chinese “Belt and Road” initiative
“There is little doubt that the Agreement is tortuously, laboriously and…badly drafted. It makes any draftsman itch to have a try at it. However I have to decide what it means.” As someone involved in drafting and negotiating construction contracts, Proudman J’s analysis of the sale contract in Bristol Rovers (1883) Ltd v Sainsbury’s Supermarkets Ltd … Continue reading Endeavouring to be clear: what does “all reasonable endeavours” mean in practice?
The recent wave of major infrastructure projects in London has produced a number of collateral benefits. Key among these has been the opportunity it has afforded to leading clients to focus on the legacy impact of their projects for the industry as a whole. Enlightened leaders such as David Higgins and John Armitt (Olympic Delivery … Continue reading Leaving a legacy: the rise of ethical sourcing
Unlike 18 April 1930, when the BBC reported there was no news and played out with piano music, 18 April 2016 is an important date for utilities and their suppliers. Today the Utilities Contracts Regulations 2006 will be replaced by the Utilities Contracts Regulations 2016, transposing the Utilities Directive 2014/25/EU into law in England, Wales and … Continue reading Today’s the day: Utilities Contracts Regulations 2016
Two cases on the apparent bias of arbitrators caught my eye recently. Both cases concerned the apparent bias of a sole arbitrator based on an alleged conflict of interest. In Cofely v Bingham, the claimant applied to the court to remove an arbitrator during the course of an arbitration, under section 24 of the Arbitration Act … Continue reading Arbitrators’ conflicts of interest and apparent bias
Last week I went to a presentation on systemic risks in major engineering projects. It certainly got me thinking. What sort of risks really matter to clients, funders and other project stakeholders? High on the list for international projects or major UK infrastructure projects are such things as brownfield risk, the regulatory and political environment, … Continue reading Risky businesses and cottage industries
Part 36 offers. Perhaps not a topic that stokes a fire in your belly or gets you out of bed in the morning. However, I encourage you to spare a few minutes and plough on. Although I cannot promise you scandal, intrigue or even excitement, a recent extension in the law concerning Part 36 offers … Continue reading Challenge to claimant’s Part 36 offer fails to make it out of the starting gate
They say that hard cases make bad law, and Manor Asset Ltd v Demolition Services Ltd is certainly a hard case. The nice folks at Practical Law Construction knew that I would have an opinion on it (they know me too well!) and have asked me to share my thoughts with you. I know that … Continue reading Pay less notices: confusion at the Manor
Parties are often so concerned about getting the express terms of the contract right that they forget about implied terms. Following the Supreme Court decision in Marks and Spencer plc v BNP Paribas Securities Services Trust Company (Jersey) Ltd, this blog looks at some of the key statutory and common law terms which may be … Continue reading What lies beneath: a reminder of some key implied terms in construction contracts
A friend phones you for legal advice. He is in the middle of home extension works and while they started off well, the works are now running well behind schedule and the standard of workmanship is shoddy. What do you do? Hang up in a panic or confidently recite Supreme Court judgments and reassure them … Continue reading With friends like these… Burgess v Lejonvarn: a parable for construction professionals
Along with the more pleasant festive traditions, this winter saw yet another series of floods causing chaos throughout the country. December 2015 was the wettest calendar month on record since 1910 and it is estimated that the cost of this winter’s floods will exceed £5 billion. According to the Met Office, extreme weather has become … Continue reading A wet start to 2016: flooding and stemming the loss
Amid speculation that the Pre-Action Protocol for Construction and Engineering Disputes (Protocol) might be abandoned, or made voluntary, by the Civil Procedure Rule Committee, the TeCSA committee (on which I sit) felt that it was important to obtain the industry’s views, to inform the debate on the Protocol’s effectiveness. As Simon Tolson, retiring chairman of … Continue reading The Pre-Action Protocol for Construction and Engineering Disputes: what do users really think?
Some of you may recognise the title line from the song “I Won’t Dance”, performed by a whole selection of sassy singers throughout the ages: Frank, Louis, Ella, and more recently Lady Gaga. This line is not the easiest to interpret. According to one view, it is all about the perils of dancing with the … Continue reading For, heaven rest us, I am not asbestos: excluding liability for contamination and asbestos
With the festive season in full swing, thoughts invariably turn to the New Year and along with expectations and good intentions comes the prospect of regulatory changes. These include the Business Contract Terms (Restrictions on Assignment of Receivables) Regulations 2015 (the Regulations), which are expected to come into effect in early 2016. The Regulations aim to … Continue reading Construction contracts and assignment of invoices: the future
In Van Oord UK Ltd and another v Allseas UK Ltd, Coulson J showed that the TCC isn’t afraid to roll up its sleeves and get its hands dirty when considering disruption and prolongation claims arising from unforeseen ground conditions, among other things. This type of claim is often very difficult to prove and this judgment demonstrates … Continue reading TCC gets its hands dirty on delay and disruption claims for unforeseen ground conditions
The Consumer Rights Act 2015 (CRA) is now in force. This is a significant piece of legislation for consumers and retailers alike, but how will it impact on construction contracts? Traders involved with domestic work for individuals will need to carefully consider the new rules as they may not be limited to small scale domestic … Continue reading Consumer Rights Act 2015: mostly plain sailing but watch out for Feldarol
The Supreme Court has handed down judgment in the cases of Cavendish Square Holding BV v Talal El Makdessi and ParkingEye Ltd v Beavis. It was not just the construction sector that waited patiently and speculated cautiously as to what the court would do with the rule against penalties. Would it confirm the current rule, … Continue reading Out of chaos arises order: Supreme Court confirms the rule against penalties in El Makdessi and ParkingEye appeals
Never before have there been so many ways to resolve construction and engineering disputes quickly and flexibly in England and Wales. The Technology and Construction Court (TCC) is piloting two speedier procedures and the Royal Institution of Chartered Surveyors (RICS) has recently launched two quicker arbitration procedures, any of which could challenge the supremacy of … Continue reading Construction and engineering disputes: spoilt for choice
Beware of clauses which seek to limit the engineer’s authority as they may be more trouble than they’re worth. Under most of the FIDIC forms, and a number of other construction and engineering contracts, many of the key obligations fall on someone who is not a party to the contract. In the case of FIDIC, … Continue reading Supervising the engineer under a FIDIC contract
The six month transition period for CDM 2015 ends today, 6 October 2015. Since 6 April, transitional provisions have been in place to allow ongoing projects time to adapt to the new regime. Now that time is up and CDM 2015 is for real. For the last few months, we’ve been scrutinising the detail of … Continue reading CDM 2015: taming the beast
In Henia Investments v Beck Interiors, Akenhead J gave important guidance on the implications for contractors of submitting late payment applications. While, understandably, this aspect of the judgment has received most of the attention, Henia provides equally helpful guidance to employers.
Last year saw the publication of Revision 6 of the Model Form of Contract MF/1 (Revision 6), a contract that is well-thumbed in the world of supply and installation of mechanical and electronic plant. The widespread use of MF/1 is in itself a hindrance to the uptake of new revisions. Contractors who have consistently used the … Continue reading MF/1: The world moves on, but not everyone keeps up with the pace
The TCC’s latest judgment on cost estimates shows once again that it is leading the way in keeping legal costs down. In GSK Project Management Ltd v QPR Holdings Ltd, Stuart-Smith J found it: “…hard to imagine anything more sterile than arguing about a grossly excessive cost estimate.” It is possible that he hadn’t imagined a blog … Continue reading Costs budgeting: TCC gives out the hairdryer treatment in GSK v QPR
The lines between mistake, implied terms and ambiguity are blurred in Arnold v Britton. In some ways adjudicators have it easy. Their decisions are difficult to challenge, private and are unlikely to be of any significance outside the scope of the project in question. This allows them a certain freedom to give a decision that, … Continue reading Ambiguity, mistake and Rainy Sky over Oxwich Bay
Being a lawyer in 2015 is, for the most part, a 24/7, modern and instant affair. Drafts of contracts are exchanged in seconds, letters drafted and exchanged without the need to wait for the post (or DX) to be collected and pleadings served remotely in the early hours. Clients benefit too, as they can reach … Continue reading Electronic working in the TCC: is the ball in our court now?
A lot of column inches have been dedicated to the decision in Aspect Contracts (Asbestos) Ltd v Higgins Construction plc. These have naturally focussed on the headline point around adjudication and limitation periods. However, there is another issue arising from the case that interests me.
What did I do before I downloaded my Uber app? I can’t imagine life without it. The latest wave of technology is revolutionising the way construction and engineering projects are managed, and very soon we won’t be able to remember how we lived without it. The importance of keeping site records The current problem is … Continue reading The impact of new technology on construction disputes
In the current overheated commercial property market, we are seeing ever more lively debates about who should take the risk of defects in existing structures on refurbishment projects. As landlords look to refurbish properties in order to capitalise on rising rents and owner-occupiers choose to tart up their existing premises rather than pay those rising rents, … Continue reading Refurbishment projects: scratching beneath the surface…
Two new cases on penalties have revived two old concerns. Do the courts interfere too much with the validity and operation of liquidated damages clauses? And if they do, is it always the employer that suffers?
In my experience, one of the most common causes of construction disputes is conflict or ambiguity between contractual documents. This is perhaps hardly surprising, since they are often prepared by different members of the client’s team. Yet it can easily be avoided if the client is willing to invest a little time and effort (and … Continue reading Design defects in offshore wind turbines: it’s an ill wind…
We are often contacted by clients when a main contractor has failed to provide documents that they are contractually obliged to procure, such as sub-contractor warranties, performance bonds or parent company guarantees. The terms of these documents are usually agreed and appended to the building contract, but the contractor is only required to provide these … Continue reading Bonds and warranties: specific performance v substituted performance?
As Lord Dyson, MR reminded us in last month’s excellent Keating lecture, construction law and the TCC used to be perceived as: “a rather dull specialist subject… all about boring Scott Schedules… and delay claims… known in the trade as ‘buggeration claims’.” But to those of us who know and love this specialist area, we … Continue reading TeCSA and the TCC: 25 years of collaboration
CDM 2015 finally went live on Monday. It’s early days, but are there any patterns emerging as to how the new Regulations will be implemented? I think there may be, given what we are seeing and discussions I’ve had with developers, consultants and others.
Keen to get works underway, employers and contractors too often surge forward without a signed contract in place. I see countless contract formation issues in multi-million pound projects where parties have worked together for several years without formalising their relationship.
The practice of novating design consultants is now a ubiquitous feature of design and build (D&B) contracts in the UK. Over the last 20 years or so, informed by decisions such as Blyth & Blyth Ltd v Carillion Construction Ltd, the wording of novation agreements has evolved to the stage of a largely market standard … Continue reading Design dilemmas in D&B
I recently negotiated a contract for the storage and maintenance of high value critical equipment. In the context of insurance solutions we discussed the issue of joint names insurance; whether it was necessary or desirable in the context of our project, whether a waiver of subrogation was required under the contract and how this might affect … Continue reading Insurance and subrogation
I have recently returned to private practice from a secondment with a major contractor client, which was an excellent experience as it allowed me to see life very much from the client’s point of view and understand, first-hand, many of the issues that clients face on a regular basis. One issue that came up several … Continue reading Back to back contracts: some problems and pitfalls
Should a developer ever be expected to give away its rights as employer under a building contract? You may think the short answer is no, and certainly not when the contractor is about to start work on site or in the middle of the build period. This is precisely when the developer needs to be … Continue reading Guilty as charged? Or how to get rights wrong
As we have come to expect from the TCC, over the last year the judges have taken a proactive approach in grappling with and adopting practices that aid the efficient management and cost-effective conduct of complex, document-heavy litigation.
Do you think the NEC is a place in Birmingham, or the TCC is in Australia? Then you need to improve your know-how. Following the success of last year’s teaser, here is a new festive construction wordsearch to test your legal knowledge.
The Court of Appeal’s decision earlier this year in Hunt and others v Optima (Cambridge) Ltd and others set me thinking about completion certificates in the context of construction projects generally.
Termination for convenience clauses are a common feature of modern commercial contracts. Terminating a contract in this way has the advantage of avoiding a default-based confrontation. It is also traditionally considered a more expensive way to terminate: parties invoking this type of clause will expect to pay an element of lost profit to the contractor … Continue reading Termination for convenience and the “minimum performance rule”
The Dubai International Financial Centre (DIFC) Courts recently consulted on an innovative proposal to allow for the “conversion” of DIFC Court judgments into arbitral awards. The English-speaking DIFC Courts have gained considerable traction in the UAE in recent years. Since 2011, contracting parties can opt-in to its jurisdiction even if they are not based in … Continue reading “Converting” DIFC Court judgments into arbitral awards
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 … Continue reading The role of experts in adjudication
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 … Continue reading Topical issues experienced at the coal face of adjudication practice
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 … Continue reading Penalties: a genuine re-estimate of loss?
Regular users of international arbitration know that choice of seat is important, but what factors influence parties for or against a particular venue? Are certain venues considered better or worse than others and are there any emerging trends for regional choices? Earlier this year, Berwin Leighton Paisner’s fourth annual arbitration survey asked arbitration users these … Continue reading International arbitration: East or West of Java?
When you’re in the midst of drafting a complex international construction contract, probably the last thing on your mind is specifying the governing law of your arbitration agreement. You may not think this is particularly important, or that it will be the same as the governing law of the underlying contract. This could prove a … Continue reading What law governs your arbitration clause? You decide
Most of us are only too familiar with the argument (so beloved of contractors) that “time is at large”. We also know that it is rarely successful. The principle by which time becomes at large was recently commented on by Ramsey J in Bluewater Energy Services BV v Mercon Steel Structures BV and others: “The principle … Continue reading Time to change “time at large”?
A case of two halves In our last blog Katy Saunders said farewell to the World Cup whilst also discussing key personnel LDs, in Bluewater Energy Services Limited BV v Mercon Steel Structures. While any mention of liquidated damages in the TCC sparks almost as much water cooler chatter as Luis Suarez’s appetite, this post … Continue reading Keeping the (good) faith: discretion advised
Reading through a judgment the length of Bluewater Energy Services BV v Mercon Steel Structures BV and others is no mean feat. Luckily for the brave and steadfast, the case considers a number of core issues that arise time and again in construction contracts and raises some interesting questions. One example that caught my eye … Continue reading The World Cup may be over, but should losing your key players always lead to penalties?
“Procedural irregularities” are increasingly being used as the basis for resisting domestic arbitral awards in the UAE. For any party who is or may be involved in an arbitration in the UAE, it is critical to understand the procedural requirements contained in the UAE’s Civil Procedure Code (CPC) and how this is being interpreted by … Continue reading Enforcing domestic arbitral awards in UAE: anticipating the inevitable
Obrascon Huarte Lain SA v AG for Gibraltar approves an interpretation of the notice requirements in the FIDIC Conditions of Contract that may offer contractors greater flexibility as to when they must notify an entitlement (or risk losing it).
The continued proliferation of legislation providing for the mandatory adjudication of construction payment disputes is a welcome step in the global trend of encouraging alternative and interim dispute resolution. Experience of dispute resolution models of this type feeds into international practice in jurisdictions where this is not, presently, the norm, with positive results for all. … Continue reading The continued growth of statutory adjudication is good news for a global construction industry
We now have the revised TCC Guide, updated to ensure TCC practice is aligned with the CPR changes brought in as part of the Jackson reforms. Through TeCSA, we were fortunate in that we had the opportunity to assist Edwards-Stuart J, Judge in Charge of the TCC, in updating the Guide. For those of you … Continue reading TCC Guide catches up with Jackson
Having read some of the academic material out there on the civil/common law divide as a law student, as I stepped into my first international construction arbitration I was very curious to see how cross-examination and oral evidence would work in practice.
In University of Brighton v Dovehouse Interiors Ltd, Carr J in the TCC gave guidance on the meaning of “commenced” adjudication proceedings for the purposes of challenging a final certificate under the JCT standard form of contract. The judgment also considers what the position is where the adjudication is then aborted.
I can’t believe that it is nearly five years since I blogged on the Langstane case. Time obviously flies when you’re getting old. For those of you with short memories or with youth on your side, in Langstane a Scottish judge held (among other things) that a net contribution clause (NCC) in a consultant’s appointment … Continue reading Net contribution: a problem shared?
With design and build (D&B) now firmly established as the procurement route of choice for many UK building projects, novation is a popular way of ensuring that single point responsibility for design rests with the contractor. However, the recent decision in Hillcrest Homes Ltd v Beresford and Curbishley Ltd reminds us that we must not … Continue reading “The Legend of Sleepy Hollow” – pitfalls of a failed novation
We are nearly one year into the Jackson reforms, but it would be fair to say that the full implications of the reforms are still being worked out by the courts. How the changes are operating in practice has generated much debate in the legal press, although much of the coverage has focused on the … Continue reading Does the court have to sanction all extensions to the litigation timetable?
It is very difficult to procure a construction or engineering project in a city like London without encountering at least one third party with potentially “at risk” assets. Typically, these third parties want their assets protected, measures taken to mitigate the risk of damage and insurance-backed compensation arrangements put in place to cover any conseqeuntial costs … Continue reading The wrong side of the tracks: indemnities and asset protection agreements
The Ministry of Justice (MoJ) has consulted on increasing court fees, including in the TCC. The aim is to reduce the cost to the taxpayer; to achieve full cost recovery by making those who can afford to pay contribute more to the costs of the courts. Many lawyers are up in arms about the proposals. My … Continue reading Is the cost of litigating set to rise as court fees are increased?
A client called me recently to discuss an issue that is probably familiar to many clients. On this particular project the pace of work is slowing, the contractor has missed a number of key programme dates and completion by the contractual date for completion is looking very unlikely. The contractor is obliged to progress the works … Continue reading Proceeding regularly and diligently
It is well recognised that because of its consensual foundation, arbitration can be difficult as a means of settling complex multi-party and multi-contract disputes. This has historically been a problem for construction practitioners and clients because an ever increasing proportion of large disputes are complex and involve multiple contracting parties.
Instead of the usual straightforward Christmas quiz, this year we give you our festive construction wordsearch!
Cost management in the courts has been around now for some time. In the TCC, we have had extended pilots dating back to 2010 and, since April 2013, the new provisions courtesy of section II of CPR Part 3 and PD 3E have been in place. With this backdrop, I am often being asked whether I think … Continue reading Is cost management by the courts working?
In April this year I looked at the “new test” (set out in Cavendish Square Holdings BV and another v El Makdessi) for determining whether or not a contractual provision is a penalty. Last week, the Court of Appeal overturned the decision at first instance, and struck out the relevant clauses as penalties. In doing so, … Continue reading Penalty clauses: genuine pre-estimate of loss versus commercial justification
If you like puzzles, I’ve got some for you: they’re called provisional sums. Most people in the construction and engineering sectors are aware of provisional sums since they appear in many contracts and price build-ups. However, the impression I have is that “provisional sums” mean quite different things to different people. Perhaps a bigger puzzle … Continue reading Do provisional sums always add up?
On 1 November 2013, Edwards-Stuart J formally launched a new e-disclosure protocol to the masses as part of a stimulating and extremely well attended all-day conference, “E-disclosure in practice”. The protocol is the brainchild of Steven Williams and the TeCSA e-disclosure working group. The event was organised by TeCSA, TECBAR and the SCL to provide practical guidance … Continue reading Launched and ready for use: TECSA’s e-disclosure protocol
The real estate industry can be slow to react to innovation. The slow uptake of third party rights in lieu of collateral warranties is a classic example of this: the Contracts (Rights of Third Parties) Act 1999 (Third Party Rights Act 1999) is 14 years old, yet there are still parts of the industry that do … Continue reading Third party rights or collateral warranties? The world after Parkwood
Berwin Leighton Paisner’s (BLP) third annual arbitration survey indicates that most arbitration users feel that document production adds significant delay and cost to the process, yet rarely contributes much to the outcome of the arbitration. It also indicates that tribunals and parties are struggling to get to grips with e-disclosure, and that tribunals are often … Continue reading Document production in arbitration – is it all worth it?
I recently had the fortune of sitting on the TeCSA marshalling scheme, which allows junior lawyers specialising in technology, engineering or construction the opportunity to shadow TCC judges for one week. This gave me the unique opportunity to witness hearings from an entirely neutral perspective, without the normal influence of one’s own involvement in either … Continue reading A view from the bench: observations on the TeCSA marshalling scheme
After nearly 30 years in the construction law game, I should no longer be surprised when an unexpected decision comes along. But Akenhead J’s judgment in Parkwood Leisure Ltd v Laing O’Rourke Wales & West Ltd made me sit up and draw breath. Last week’s Practical Law legal update notes that the decision will be a “surprise … Continue reading Collateral warranties and the Construction Act – a nasty surprise
The Court of Appeal has recently been grappling with the issue of guarantees again. In CIMC Raffles Offshore (Singapore) Ltd and another v Schahin Holding SA it considered the extent to which an anti-discharge provision may operate to exclude the purview doctrine in the context of guarantees.
There has been a lot of hype in the past year about predictive coding. Lawyers have prided themselves on being fantastically “in the moment” when proposing this advanced technology to clients, in the context of large disclosure exercises, with the promise that it will save time and money. Indeed, using this latest technology has become an … Continue reading Predictive coding: a helpful new technology or merely the latest buzzword?
I was recently negotiating a procurement contract that brought to mind recent cases concerning good faith obligations. It occurred to me that if there is a move towards including express good faith obligations in construction contracts, should we not also consider addressing the consequences of acting in bad faith?
Parties too often under-estimate the value of having their case on quantum in order in the lead up to a hearing. In the context of complex high value construction disputes much has been written about the role of experts and ensuring that their evidence is properly presented to the court. The court’s gaze is increasingly … Continue reading A thought shower on managing quantum experts in and out of the hot-tub
The extent to which a party may be obliged to sacrifice its own commercial interests in complying with an “endeavours” obligation in a commercial contract is an issue to which there is no easy answer. A different but related issue was considered in two recent cases: whether a party who is in financial difficulty can … Continue reading Using all reasonable endeavours to commit commercial suicide
I am always worried that failing to tick the correct box on a form could have dangerous consequences, but it is reassuring to see that the TCC does not view such an error as fatal, at least when it comes to revising an approved costs budget. Since the introduction of the costs management pilot scheme … Continue reading Consequences of failing to tick a box in costs management
I recently attended a topping out ceremony organised by a developer client. At the ceremony, I was extremely interested to hear the developer attribute the early completion of this particular superstructure to the spirit of good faith in which the parties had worked. Having drafted the JCT-based building contract between the developer and the contractor, … Continue reading Good faith in practice: a view from the top
The uncertainty surrounding how to enforce dispute adjudication board (DAB) decisions that are binding but not yet final is a favourite topic for debate amongst FIDIC practitioners. However, it is more than simply an academic point. Arbitral tribunals are repeatedly grappling with it and are broadly divided, adding to the uncertainty. That FIDIC has recently (on … Continue reading FIDIC guidance on enforcing binding (but not final) DAB decisions: does it help?
I recently advised on the question of whether a liquidated damages clause was a penalty. My attention was drawn to the recent case of Cavendish Square Holdings BV and another v El Makdessi. You may not have come across this judgment, as it is not a construction case, and does not concern liquidated damages. Rather, the … Continue reading Penalty clauses: does the punishment fit the crime?
I am always nervous when contracts that I had a hand in drafting end up in the High Court. Thankfully it hasn’t happened too often, but when it does there is an inevitable frisson as I wonder what the judge will make of it. Will he agree that my drafting means what I intended it … Continue reading Rainy Sky revisited – common sense in the TCC
Have you ever been involved in negotiating a contract term that seemed eminently sensible, only to find that its application was rather more complex than initially supposed? Sometimes I feel that Parliamentary draftsmen must feel the same way, trying to draft legislation of general application against a backdrop of a huge existing body of law … Continue reading Recovering costs under late payment legislation
My last blog on cost management was, I now appreciate, rather boldly titled “Cost management by the courts is here to stay”. I was writing in the context of the TCC but my thoughts were soon endorsed when the judiciary announced that the cost management regime would be applied to all multi-track cases in all courts … Continue reading Cost Management in the TCC: here today, gone tomorrow?
With the increased use of “cost reimbursable” or “cost plus” contracts such as the IChemE Green Book and NEC3 option E, now is a good time to consider the employer’s right of audit in more detail.
In so far as there can be trends among construction lawyers, it is, “trendy” to question whether delay is an area of “expertise”. Whether or not you use the evocative term “expert” or stick to my preferred, “analyst”, it is interesting to explore why the area of delay evidence is contentious and engenders so much … Continue reading How to get what you want – delay analysis
Our previous blog post considered whether JCT bonds were on-demand instruments or guarantees. The issue of bonds and guarantees came up again recently in a slightly different context. Our client asked us to advise on its demand for payment under a “performance bond“. The client explained that the performance bond was an on-demand instrument and … Continue reading On-demand bonds or guarantees: clarity and commercial certainty at last?
Allow me to set the scene. Our client, Q, is procuring a major office development in the City of London. Q tells me that, in order to secure the most competitive tenders for the project, he has decided to give the contractor advance payments and payments for off-site goods and materials. Fairly standard practice, particularly … Continue reading JCT bonds: on demand instruments or guarantees?
Is your Christmas tree a complex structure? Are there three wise men on your dispute board? Berwin Leighton Paisner’s Christmas quiz is back to test your legal knowledge with a stocking full of construction teasers, one for every day of Christmas.
While most of us were caught up in the wall-to-wall coverage of the Leveson report last Thursday, other significant announcements were being made in Westminster. The Energy Secretary, Ed Davey, made a statement on the publication of the Energy Bill 2012, which is the product of months of industry-wide dialogue and debate on how we … Continue reading Keeping the lights on?
The tragic earthquake in L’Aquila, Italy, followed a number of minor tremors and not only shook the population of the historic town, killing 308 people and leaving tens of thousands homeless, but also sent shock waves through the scientific and engineering communities both in Italy and worldwide, stirring much indignation among them. Why? Four seismologists, two … Continue reading “Shaken and stirred” when a criminal prosecution follows an earthquake
Do we need to think a little more carefully about what the public procurement rules cost to implement? Few people could disagree with the government’s stated procurement policy to: “… buy the goods, works and services that it needs under a fair and open procurement process, guarding against corruption and seeking to secure value for … Continue reading The hidden cost of public procurement
Expert evidence is pivotal in most construction and engineering disputes. This means that, as lawyers, we need to be on top of our game when it comes to expert evidence. Most of us probably think that we are very good at managing the expert-lawyer relationship. However, the fact that expert evidence keeps coming in for … Continue reading The importance of expert evidence
I recently blogged on Ampleforth Abbey Trust v Turner & Townsend Project Management Ltd and how the court in that case held that the liability cap in the project manager’s standard terms did not pass the Unfair Contract Terms Act 1977’s (UCTA) test of reasonableness. RIBA’s recent announcement that it is about to release a … Continue reading Liability caps: does Ampleforth have anything to teach RIBA?
This blog post looks at liability caps in professional appointments following Ampleforth Abbey Trust v Turner & Townsend Project Management Ltd (last week we considered letters of intent in light of the same case). In Ampleforth, the project manager’s appointment contained a provision that limited its liability under the appointment. HHJ Keyser QC had to … Continue reading Liability caps: When the cap doesn’t fit
Letters of intent on construction projects are often condemned as a Bad Thing and to be avoided at all costs. They are particularly prevalent in the construction industry and can create all sorts of problems for both the contractor and the employer. However, this is not to say that using a letter of intent is … Continue reading Are letters of intent necessarily a “bad thing”?
Arbitration users’ perceptions of the speed of the arbitral process have been a bit of a roller-coaster. Initially arbitration was trumpeted as being speedier than litigation, but users have increasingly expressed frustration at the delays experienced in obtaining an arbitrator’s award. Earlier this year, Berwin Leighton Paisner (BLP) surveyed arbitration users regarding delay in the … Continue reading Delay in arbitration: is it really so bad?
I had a call from a client (I’ll call him “Mr D”) not so long ago. Mr D was developing a scheme behind an existing façade, which the lovers of early 20th-century architecture at planning control had insisted needed to be retained. Mr D’s contractor therefore had to construct various brackets and supports during excavation … Continue reading Does my engineer have to check that my contractor’s wall won’t fall down?
It seemed as if everything was up for discussion at the TeCSA and TECBAR symposium which BLP hosted last Monday evening. The ever impressive line up of speakers included Ramsey J and Akenhead J, to present talks on the theme of the interventionist judge and better case management. The slight irony of the evening seemed to … Continue reading The project manager, case management and the interventionist judge
In Kazeminy v Siddiqi, a “full and final settlement” wasn’t so final. It’s a valuable reminder of the first rule of settlement.
Good quality and available infrastructure is a key component of economic growth. Indeed, the government is currently looking at increasing its spend on infrastructure as a key component of its strategy for UK growth. However, what is the future of long term project financing for UK infrastructure projects, especially given the global financial crisis and … Continue reading Field of Dreams? Pension fund investment in UK infrastructure
When negotiating commercial contracts, parties are often preoccupied with what level of obligation to accept, whether this is “reasonable endeavours”, “best endeavours” or some other standard. Alternatively, they use such terms as some sort of compromise wording where they can’t quite agree or identify what is actually required. Importantly, they often neglect to consider the … Continue reading Being certain in your endeavours
I was pleasantly surprised to see a few fellow lawyers at the RICS recently, for the launch of its New Rules of Measurement (NRM) and the accompanying QS & Construction Standards (the Black Book). I had thought this was classic “QS’ing for QSs” territory and that I was the only lawyer sad enough to be … Continue reading The new RICS measurement rules
I was looking back over the files from an old adjudication where I had represented the responding party. This case was interesting because it was one of those claims where the referring party’s lack of preparation reversed the usual (and true) maxim that adjudication favours the referring party.
Although much has been written about the proposed reforms to the civil litigation system, in many ways we remain slightly in the dark about how the changes, once implemented, will work in practice. In terms of how IT will assist in this, until the thirteenth lecture in LJ Jackson’s series of lectures aimed at explaining … Continue reading A “Brave New World”: how IT is going to transform civil litigation
By now, you’ll no doubt have noticed that the ninth edition of Keating on Construction Contracts (Sweet & Maxwell, 2011) has arrived on your bookshelves. Published earlier this year, the new edition has been eagerly awaited, not least because some of us were impatient to see what colour it was going to be (it’s a … Continue reading Delay and concurrent delay
With the London 2012 Olympics now just around the corner, only time will tell whether the hotly negotiated liquidated damages (LADs) provisions in many “Games-related” contracts will be put to the test. We are involved in a number of projects where the timing of completion is absolutely critical, given the impending Games and the sheer number of … Continue reading Liquidated damages – fun and games
We all know that things change. What seemed like a good idea a few years ago, might now be less appealing. We may all cringe at old photos, at a past hairdo or choice of outfit. The same can apply in a commercial context. Added to that are the likes of continuing financial uncertainty, strikes, bail outs, … Continue reading How can I get out of this contract?
Recently a number of our employer clients have told us they are not entirely satisfied with the alliances that they have entered into. Whether this is a mere coincidence or represents a broader trend away from alliancing is unclear, but the list of complaints seems to be fairly consistent.
We’ve all been there – sitting quietly in our office when an adjudication referral lands on our desk. Straight away the clock is ticking and deadlines are looming. However, before you even begin drafting the response, there’s the small matter of checking whether the contract’s provisions are Construction Act 1996 compliant. This might be your first ground for … Continue reading When is a construction operation not a “construction operation”?
Benjamin Franklin once memorably wrote: “In this world nothing can be said to be certain, except death and taxes.” Litigation lawyers can be sure of one further thing: the issue of costs will be controversial.
Do you know your Tolent clause from your Santa Claus? Then why not test your knowledge of construction law? Berwin Leighton Paisner’s Christmas quiz is back and as challenging as ever.
I was surprised at the Court of Appeal’s recent decision in Daventry District Council v Daventry & District Housing Ltd. To me, this seems at odds with what I thought were the well-established rules of contract interpretation and rectification.
A Technology and Construction Court (TCC) working party is undertaking a review of the Pre-Action Protocol for Construction and Engineering disputes. I understand that there is support from some quarters for its abolition. I would like to add my voice to Catherine Gelder’s blog: to stand up for the Protocol and record my support for … Continue reading Don’t let the Pre-Action Protocol go
Keen readers of this column will recall my bafflement at the Court of Appeal’s decision in Rainy Sky SA v Kookmin Bank. An (as it seemed) routine call on an advance payment bond was denied on the basis of one word – “such“. The word had been carelessly inserted into a clause of the bond, presumably with … Continue reading Common sense prevails in the Supreme Court: Rainy Sky
International arbitration can sometimes be a lengthy process that does not always address the complex nature of construction disputes. The International Chamber of Commerce (ICC) has issued a revised set of rules for international arbitration, due to come into force from 1 January 2012 (the ICC Rules 2012). It hails these as being the “answer … Continue reading ICC Rules 2012: do they really respond to today’s business needs?
Few expressions are more likely to get construction practitioners hot under the collar than “fitness for purpose”. But is the hype justified? And what does it really mean? I was pondering these questions when recently reviewing a client’s in-house (bespoke) form of design and build contract.
Akenhead J’s judgment in PHD Modular Access Services Ltd v Seele GmbH provides a useful analysis of when a party can apply for pre-action disclosure under CPR Part 31.16 and the breadth of the order sought by the applicant, particularly where there are ongoing adjudication proceedings. It is a common consideration where disputes arise between parties in … Continue reading Going fishing: can you use pre-action disclosure in adjudication?
There I was, quietly drafting some LDEDC Act 2009-compliant payment terms when, hitting a patch of writer’s block, I turned to my trusty PLC mark-up of the revised English Scheme. All of a sudden it dawned on me that either I had fundamentally mis-read the LDEDC Act 2009 or the revised English Scheme was not Act-compliant.
From 1 October 2011, for the first time, parties will be entitled to refer disputes arising under wholly or partly oral contracts entered into after this date to adjudication. We will have to wait and see whether this change produces an avalanche of new claims but, even if it doesn’t, clients, their advisers, adjudicators and … Continue reading Adjudicating an oral contract
So, after the tense negotiations, you have popped the champagne corks and finally have a building contract signed and completed. But now what? Do you let it become an attractive paperweight? Or is it going to be your Satnav – the tool that guides you through the construction process and helps you navigate any roadblocks … Continue reading Is your building contract gathering dust?
With all aspects of court proceedings coming under scrutiny and reform to ensure they are cost effective, it is perhaps not surprising that the Technology and Construction Court (TCC) is looking at the Pre-Action Protocol for Construction and Engineering Disputes. Is it a waste of time and money, or does the upfront investment lead the parties … Continue reading More change at the TCC: abolition of the Pre-Action Protocol?
On 27 July, the Supreme Court overturned the Court of Appeal’s decision in Nurdin Jivraj v Sadruddin Hashwani, holding that arbitrators, because of their unique, non-subordinate, relationship with the parties, are not “employees” for the purposes of Equality Act 2010 (the Act) and therefore anti-discrimination legislation does not apply to the appointment of arbitrators. This … Continue reading Jivraj: Sanity Prevails!
The latest HSE figures show that fatalities on construction sites rose in 2010 (from 41 to 50) for the first time in four years. This was not a revelation: every week the industry press reports a serious accident on a construction site somewhere in the country, but it still shocked me. With all the recent … Continue reading Health and safety in the construction industry: under the spotlight again?
The recent case of Urang Commercial Ltd v Century Investments and another, has caused concern that it is difficult to reconcile with the existing authorities, particularly those where the adjudicator has taken too narrow a view of his jurisdiction. In my view there is no conflict with this line of authority. The case instead shows that, … Continue reading Counterclaims and frolicking: does Urang change anything?
Last Thursday, members of TeCSA and TECBAR came together at their annual joint conference to discuss the subject of “E-disclosure and e-working in the TCC”. The excellent line-up of speakers included included Mr Justice Akenhead, who delivered an update from the TCC, and Mr Justice Edwards-Stuart, who reported on e-working in the TCC. This post summarises … Continue reading E-working in the TCC – a view from the Bench
We are often asked by clients whether an NHBC warranty and a collateral warranty or third party rights (TPRs) provided by a contractor offer the same protection. They don’t and here is why.
There may have been some dissenters when cost management initially came to the fore during Jackson LJ’s far-reaching civil litigation costs review, but the majority view now seems to be that cost management through the courts is to be welcomed. After all, cost uncertainty and the fear of unmanageable costs represent some of the biggest … Continue reading Costs management by the courts is here to stay
How do you verify the identity of an overseas company, whether it has power to enter into the contract and who is authorised to act on its behalf? Does it matter if you don’t know the difference between a Gesellschaft mit beschränkter Haftung and an Aktiengesellschaft? Individuals travelling overseas with any frequency are used to having to prove … Continue reading Should companies have passports?
Although early neutral evaluation (ENE) in the TCC got off to a slow start, interest in it seems to be increasing. Recently, we have found that more clients are considering ENE as a dispute resolution method and as an alternative, or as an add on, to more traditional methods such as mediation.
At the construction law and strategies conference on 12 April 2011, several leading lights in construction law gave talks. Among them was Akenhead J, the head of the TCC, who spoke about its history and its future. Akenhead J regularly talks to the construction industry. He is always keen to emphasise that, as a wholly High Court institution, the TCC … Continue reading Very soon the TCC’s future will arrive
The recent TCC case of Simon Carves Ltd v Ensus UK Ltd underlines the importance of knowing how and when any performance security expires.
For anyone who (like me) is going through the ordeal of domestic building work, the tale of Michael Phillips Architects Ltd v Riklin and another has a painful resonance.
The European Commission proposes amending the Brussels Regulation to reduce the scope for avoiding arbitration by commencing court proceedings in breach of an arbitration agreement. This is a welcome boost to those involved with international contracts. The proposals would reinstate one of arbitration’s main advantages: access to speedy justice outside of a judicial system.
We regularly act for clients negotiating professional appointments. Historically, in the domestic market, professional consultants had not sought to limit liability for losses caused by their negligence or breach. However, over the past few years, requests for limits on liability have become increasingly common.
The Court of Appeal’s recent decision in Robinson v Jones considered the extent of a contractor’s duty of care in tort not to cause economic loss. Specifically, it considered the extent, if any, to which the making of a contract in itself gives rise to an assumption of responsibility (in the Hedley Byrne v Heller … Continue reading Are D&B contractors liable for tortious economic loss following Robinson v Jones?
A client recently raised this question in the context of a project using the NEC3 ECC. It throws up a number of issues including whether the bank holiday: Is a change in law. Is a Compensation Event under clause 60.1(19). Entitles employees to an additional days holiday.
The overwhelming practice in international arbitration is for disclosure to be governed by the IBA Rules on the Taking of Evidence in International Arbitration (the IBA Rules). The IBA Rules’ disclosure requirements are equivalent to option two of Jackson LJ’s proposed menu of options for disclosure (as set out in his preliminary report). In my … Continue reading How does Jackson LJ’s option two for disclosure work in practice?
Traditional procurement has come under scrutiny recently and has acquired a poor reputation in some quarters. It is accused of being adversarial, inefficient and fragmented. It is even suggested that lawyers recommending a traditional procurement route may be negligent! Some would have us believe that the grass is greener elsewhere, but I am sceptical.
Once again, it’s time for the Berwin Leighton Paisner Christmas quiz. Why not test your knowledge of construction law? This year’s quiz is as challenging as ever.
It’s been an “interesting” six months for the infrastructure industry in the UK. I can’t remember a time when there has been so much policy focus from government on infrastructure.
Construction projects nearly always involve a number of parties. For example, in addition to the employer and the contractor, most projects include the services of consultant engineers and architects, with various sub-contractors engaged along the contractual line. Sometimes there are funders and developers too. Therefore, it is not unusual for disputes to arise between a number … Continue reading The tangled web of a multi-party dispute
These are tough times for contractors. A recent Construction News survey of price prediction data revealed that tender prices are dropping, with an expected average reduction of 3.7% during 2010. In a market where contractors are battling to survive, here are my top three tips for addressing the risk of contractor insolvency.
The planned nuclear new build programme in the UK has been the subject of much discussion over the last few years: will the new coalition government support, oppose or be indifferent to it? On a more personal level, how safe is nuclear power and do people want it on their doorstep? Commercially, there have been … Continue reading Building Britain’s nuclear future and developing a worldwide nuclear renaissance
The Supreme Court’s decision in Oceanbulk Shipping & Trading SA v TMT Asia Ltd & Ors, in which Berwin Leighton Paisner acted for Oceanbulk, was handed down on 27 October 2010. In a landmark ruling the Supreme Court revisited those instances where without prejudice negotiations may lose their privileged status. The court introduced a new exception … Continue reading “Without prejudice” negotiations: or are they?
False. The recent case of Azimut-Benetti SpA v Darrell Marcus Healey is another example of the courts moving away from the “genuine pre-estimate of loss” test and looking at whether the clause is commercially justifiable.
Legal advice privilege exists so that a client and his solicitor may speak candidly to each other when seeking and providing advice as to what should be done in a relevant legal context. That candour would be impaired if those communications might be disclosable to a third party. This area of privilege has been undermined in … Continue reading A privileged position? Legal advice privilege under scrutiny
On Friday, the latest version of the TCC Guide takes effect. The TCC has used the opportunity to set down a procedure that reflects where it wants to be when it takes its position as part of the new business court in the Rolls Building in 2011.
The Court of Appeal’s decision in Nurdin Jivraj v Sadruddin Hashwani, could have the unexpected consequence of rendering a vast number of arbitration clauses void, thereby undermining London as an international arbitration centre. This sounds extreme, but is it?
Sustainability has been firmly on the agenda for some time now and yet the transition towards sustainable development has been slow. Sustainability is often seen as being about “green buildings”, with a focus on managing environmental impacts, waste and energy cost savings. However, sustainable development is also about recognising that buildings are part of the … Continue reading The sustainability equation: finding the gold in green buildings
What do you do when your contractor is in delay, but a key part of the works is substantially complete and could be used? You don’t have all the technical documents, such as your as-built programmes and operating manuals, and the tests haven’t been fully completed yet. Despite this, the needs of your business are … Continue reading Taking the plunge of early take-over
As the City of London office market gradually picks up, we are involved in a number of projects that are following the construction management (CM) route. Are these isolated examples of the use of CM, or is this the start of a trend? And should other developers think about joining the CM bandwagon?
The Contracts (Rights of Third Parties) Act 1999 (the Act) has applied (unless specifically excluded) to contracts entered into since 11 May 2000. Ten years on, it seemed timely for us to take stock of receptiveness to third party rights among the industry’s key players. The outcome was encouraging.
Last Monday, TeCSA and TECBAR held their annual joint conference with an excellent line up of speakers, including Ramsey J, who gave an informative “state of the nation” talk on the TCC, and Akenhead J, who gave an entertaining and practical perspective on early neutral evaluation in the TCC. This post summarises the highlights from … Continue reading Akenhead J’s perspective on early neutral evaluation in the TCC
When I first read the Court of Appeal’s decision in Kookmin Bank v Rainy Sky SA, I couldn’t believe it. Surely I had misunderstood the facts? So I read it again, and everything was as I had thought. Was I missing something?
The decision in Banner Holdings Limited v Colchester Borough Council has already caught the attention of Matt Molloy. It is another decision of the TCC on a Part 8 claim dealing with non-compliant adjudication clauses, and it raises (and indeed revisits) a number of interesting issues.
There are obvious and well-documented risks associated with contracting on the basis of a letter of intent (LOI). What is less obvious is that different forms of contract raise particular challenges when it comes to framing LOIs. This was brought home to me recently when I looked at an LOI for works to be let … Continue reading Letters of intent in NEC projects
If you were asked to carry out works to a small part of a large building on the basis that you had to insure the whole building for its full reinstatement value, at a disproportionate cost to the value of the works, would you take the job? This is the issue that is currently facing … Continue reading Tenant’s works and insurance: a problem shared is a problem solved?
Given the current limited supply of development funding from traditional financial institutions, developers are looking for alternative sources, both to kick start new projects and to finish off projects where their existing credit limits have been exceeded. A possible alternative source of funding may come from contractors. Some contractors appear willing to dip into their … Continue reading Who pays the piper? Contractor funding for developments
Working on a major infrastructure project recently, I was reminded of the issues that can arise when dealing with contractors undertaking projects on a joint venture (JV) basis. This is an increasingly common approach on large and complex projects (particularly in the roads, tunnelling and power sectors) as contractors look to pool their expertise or … Continue reading Contracting with joint ventures
I have been working in our Abu Dhabi office for about a year now. During this time I have come across a number of legal issues in the construction and engineering context that are very different from those we are familiar with in the UK. This post highlights some of the UAE law issues that … Continue reading Contracts of muqawala and decennial liability: a middle eastern perspective
The first thing to remember is don’t Google it! But don’t panic either, it’s not as bad as it sounds. “Hot tubbing” or “concurrent evidence”, as it is less scarily known, is a method of giving evidence where both experts (or witnesses of fact) sit in the box together and the tribunal chairs a discussion … Continue reading Hot tubbing with your expert: will it leave you exposed?
The past 18 months have been tough for the construction industry, with many existing development projects put on hold. You only have to look around any major city to see sites locked up, cranes standing still and part-built properties. The good news is that things are slowly beginning to move again, with major developers (such … Continue reading Don’t keep me in suspense
Given that, from 1 April 2010, the e-working pilot scheme will become permanent, allowing parties to submit claims and take subsequent steps in the litigation electronically, now seems a good time to review what we have learnt so far from the pilot.
In my November blog post, I thought there was a real risk that any deal reached during the Copenhagen climate conference would be a toothless tiger, with very few binding commitments to reducing CO2 emissions. Well, on reflection, even that pessimistic prediction was a little over-optimistic. The Copenhagen “accord” fails to provide any binding commitments … Continue reading There is no Planet B: after Copenhagen, what next?
Time is money on any construction project and a well drafted pre-planning appointment could save you both. At the start of a construction project, legal formalities are generally not a priority for the parties, who are more likely to be focused on pre-commencement practicalities, such as selecting the right project team, creating a concept design, … Continue reading Pre-planning appointments: why bother?
How good is your knowledge of construction law? Fancy rounding-off the year in style? Why not test your mettle with our Christmas quiz, but beware our yuletide-themed trick questions?
What a perfect defence to a claim: being able to tell the claimant, sorry folks but you’ve got the wrong defendant! We novated the contract, so you need to go after the people that took over from us.
The government has published six draft national policy statements (NPSs) for consultation. They are the latest step in a detailed consultation on energy and, in particular, nuclear energy aimed at taking policy to the year 2030.
As I write this post, there are less than 33 days until the UN-sponsored Copenhagen climate change conference begins, where world leaders will meet to thrash out a successor to the Kyoto protocol. Gordon Brown recently described the conference as the last chance to set the course for a reduction in carbon dioxide (CO2) emissions … Continue reading Copenhagen: the last chance saloon
Choosing the right form of contract is fundamental to the success of any project, particularly if the parties are contracting outside their own jurisdictions. The FIDIC forms were traditionally the contracts of choice for international projects. However, since the IChemE published its International Suite of Contracts almost two years ago, parties need to consider whether … Continue reading FIDIC or IChemE, which is best for your project?
When things go wrong on a project we tend to think that the contract will finally determine issues between the parties. Of course, this is not always the case: we must not forget about statutory rights.
The TCC takes a robust approach to enforcing adjudicators’ decisions and a dim view of parties “simply scrabbling around to find some argument, however tenuous, to resist payment” (Chadwick LJ, Carillion Construction Ltd v Devonport Royal Dockyard). However, a technical breach by one of the parties can result in the court declining to enforce an … Continue reading A mere technicality?
Last week, those participating in TeCSA’s technical training course, “Building Stadia: from the start to the finishing line!” were extremely fortunate to be given the opportunity to tour the Olympic Park. This included being taken into the bowl of stadium itself and driving up the 100 metre “track”!
The construction industry has an unenviable health and safety record. In the year to 31 March 2009, there were 53 construction site deaths. Although this number was lower than the previous year (when there were 72 deaths), the construction industry remains one of the most dangerous industries to work in.
Mediation is widely used in the construction industry to resolve construction disputes. Between a third to a half of the disputes that we are involved in are mediated at some point and our experience of this form of ADR is that it can prove successful, even in the most unlikely of circumstances.
In last week’s post I explained the format and purpose of the JCT’s Project Bank Account documentation (PBA) and pointed out problems with its trust provisions. This week I consider the PBA’s provisions for payment into the project account.
The adoption of Project Bank Accounts (PBAs) is one of the key elements in the Office of Government Commerce’s (OGC) drive to promote fair payment practices in the construction industry. So, with the draftsmen of the JCT, NEC and PPC2000 contracts vying for the prize of most OGC-compliant standard form, it comes as no surprise … Continue reading JCT Project Bank Account documentation: do the trust provisions work?
Current market conditions mean there may be valid commercial reasons why a developer may not want to build out a development. Equally, there may be valid commercial reasons why a purchaser may not want to continue with its purchase of a completed development. This issue was the focus of a recent case, Menolly Investments 3 … Continue reading For the sake of completion…
What is the practical value of step-in rights in collateral warranties? I ask because a number of people have recently questioned me about such rights in the context of a development project: who requires them and in which warranties?
In the recent case of Siemens Building Technologies FE Limited v Supershield Ltd, the TCC considered the circumstances in which a party may settle a claim against it and recoup the amount of that settlement from another party. This is a common scenario in construction and engineering disputes, which routinely involve a large number of … Continue reading Passing a settlement along the contractual chain
In our previous post we outlined the facts in Kent County Council v Robertson Construction Northern Limited and considered the court’s decision on the allocation of availability and performance deductions in PPP/PFI projects. Another interesting aspect of this case is the comments the court made in relation to interface agreements, which are a common feature … Continue reading PFI interface agreements
The Outer House of the Court of Session recently considered the allocation of availability/performance deductions in PPP/PFI projects and concluded that these deductions related only to failures in the provision of operational services, not failures in design or construction.
Disputes are increasing; cash is short. Where does that leave you and your project? We live in troubled times. The commercial property and construction industries have been particularly affected. In the construction industry, two trends are noticeable: There are more disputes. There are more contractor and sub-contractor insolvencies.
In my previous post, I outlined the facts in Langstane Housing Association Ltd v Riverside Construction Aberdeen Ltd and considered the judge’s surprising decision on the meaning of “current” when deciding which version of the ACE conditions applied. In this post I look at the judge’s analysis of the net contribution clause in the ACE … Continue reading Net contribution clauses and UCTA
The decision in Langstane Housing Association Ltd v Riverside Construction Aberdeen Ltd features some highly dubious judicial reasoning and illustrates the extent to which the courts are out of touch with the real world of contract negotiations for major construction projects. Although a Scottish case, its findings will resonate in England and Wales as well.
Persistent late payment or non-payment of invoices may constitute a repudiatory breach of contract in some situations, but not in others. It is not always easy to spot the difference. In the current economic climate, this has become a common problem. Employers are reluctant to make payments to contractors who are on the brink of insolvency, … Continue reading Termination or repudiation: that is the question
What happens if your construction contract contains adjudication provisions that do not comply with the Construction Act 1996 (Act)? “That’s easy”, you say, “the Scheme for Construction Contracts 1998 (Scheme) applies because section 108(5) of the Act says that if the contract does not comply with section 108(1) to (4), the adjudication provisions of the … Continue reading Adjudication provisions: a recipe for confusion?
The Court of Appeal’s recent judgment in Laker Vent Engineering Limited v Templeton Insurance Limited is a reminder of the importance of being aware of (and complying with) the disclosure and notice requirements of an insurance policy.
It can be of no surprise that in the recent decision of PT Building Services Limited v ROK Build Limited  EWHC 3434, Ramsey J held that a contractor could not both “approbate and reprobate” an adjudicator’s decision.
In the recent case of Balfour Beatty v Modus Corovest an employer argued that a contractor needed to issue a withholding notice if it did not intend to pay liquidated and ascertained damages (LADs) claimed by the employer. As far as we are aware this is the first time that such an argument has been raised.
In a previous blog post we raised some of the practical problems that arise when trying to comply with the Pre-Action Protocol for Construction and Engineering disputes (the “Protocol”) in large multi party actions. It would have been overly optimistic therefore to think the impending new Practice Direction on Pre-Action Conduct (the new Practice Direction) … Continue reading Pre-action problems likely to persist
We recently reviewed a bond/guarantee which started with the wording above and continued in the “archaic” form that was widely criticised in the Trafalgar House case in the mid-90s.
We have recently been involved in a large, multi-party dispute where compliance with the Pre-Action Protocol for Construction Engineering Disputes (the Protocol) gave rise to various practical questions:
Construction companies are complex businesses. Typically, a construction company will have entered into numerous contractual arrangements with a range of clients, sub-contractors and suppliers, as well as ancillary undertakings such as bonds, guarantees and collateral warranties. There will be a mix of ongoing and completed contracts, with potential liabilities extending for up to 12 years after … Continue reading Selling a construction company
In the construction industry, more than any other industry, there is a tendency for works to be carried out on the basis of unsigned contracts and letters of intent. While there are often legitimate commercial pressures to start work before all the contractual terms have been agreed, two recent cases have highlighted the risks in … Continue reading Letters of intent: often used and often problematic
What is “Adj-Med”? In their blog posted on 29 October, PLC Construction referred to the new adjudication rules launched by CEDR Solve. These provide that, once the adjudicator reaches a decision, he may invite the parties to take part in a mediation. He does not reveal his decision to the parties, unless the mediation is … Continue reading “Adj-Med”: a new and improved form of ADR?
Everyone involved in construction and engineering appreciates the effort involved in planning a project and choosing an appropriate procurement strategy. All too often that work is undermined by careless errors made when compiling the contract documents into a formal agreement. The resulting disputes can be expensive and time-consuming. Here are some tips for avoiding trouble: