It is notoriously difficult to resist payment following a call on an on-demand guarantee or bond. Generally, nothing less than a seriously arguable case of fraud by the beneficiary will suffice. The stringency of this test is backed by strong policy arguments militating in favour of protecting the integrity of the banking system. However, even … Continue reading Nearly, but not quite: the difficulties of resisting payment of an on-demand guarantee
Anyone with a substantial adjudication practice will have experience of a lay client asking these questions (or some version thereof): “Why can’t we call them crooks? They [the other party] are clearly fraudulent. Why can’t we say so?” As a legal practitioner you have to patiently explain that fraud can only be pleaded on specific … Continue reading Fraud and adjudication: a new front
Do long-term contracts need to be construed in a particular way? Do contracts that require the parties to work together and cooperate over a period of many years have their own special rules? Do they demand special treatment when it comes to questions of contractual interpretation? Those are some of the questions raised by the … Continue reading Interpretation of PFI contracts: the long and winding road
Over the past few months, a number of large construction companies have been making headlines for facing severe financial difficulties. However, sub-contractor insolvency can also cause considerable problems for other parties on construction projects who have contractual relations with that party. In Multiplex Construction Europe Ltd v Dunne, the main contractor (Multiplex) took steps to … Continue reading Sub-contractor insolvency – what lengths would you go to?
In Interserve Construction Ltd v Hitachi Zosen Inova AG, the court was asked to interpret the termination provisions of a contract to determine whether there was a condition precedent clause.
The parties to procurement challenges are required to act quickly and in accordance with a strict timetable. When a losing bidder issues a claim, it must serve the claim form on the defendant within seven days after the date of issue. Pursuant to CPR 7.4(2), the particulars of claim are to be served no later … Continue reading Ignore the procurement dispute timetable at your peril
This post examines the legal and practical implications of enforcing adjudicator’s decisions against parties threatening insolvency. The TCC recently considered the applicable principles in Bernhards Sports Surfaces Ltd v Astrosoccer4u Ltd. Judgment has been given and it is in the process of being reported.
Construction, engineering and energy disputes often give rise to issues as to the design standard to which a design and build contractor ought to be held. In such cases, the issues often relate to how the contractor’s obligations (which may be diffuse) interrelate with one another. Disputes are particularly likely to arise where the parties’ … Continue reading Supreme Court rules on diffuse design and build obligations
Recent weeks have brought two Court of Appeal judgments on the status of costs budgets and the unreasonable refusal or failure to mediate: Harrison v University Hospitals Coventry & Warwickshire NHS Trust and Gore v Naheed and another.
The court has jurisdiction to make charging orders over property, shares or other interests by virtue of section 1 of the Charging Orders Act 1979 (COA 1979). In construction claims, a charging order can be an appropriate method of enforcing, or at least securing, a judgment where there is a risk that the judgment debtor may … Continue reading “Out of service”: charging orders and service on non-parties outside the jurisdiction
In the last few months, there have been a number of developments in the court system of considerable potential importance to technology and construction practitioners. A new grouping, the Business and Property Court, has been formed by the judiciary. This essentially comprises the Chancery Division, the Commercial Court and the Technology and Construction Court (TCC). … Continue reading A new Business and Property Court is coming your way soon
Goodlife Foods Ltd v Hall Fire Protection Ltd is a decision of HHJ Stephen Davies (sitting as a High Court judge) on a preliminary issue relating to the proper construction and enforceability of an exclusion clause under the Unfair Contract Terms Act 1977 (UCTA). It was also a decision on an application for permission to amend … Continue reading Court considers proper construction and enforceability of exclusion clause under UCTA
Trying to find a way around an exclusive remedies clause is a familiar challenge. The contract provides the parties with the right to make certain claims against each other pursuant to a specified process. There is a clause that provides that the right to make claims under the contract constitutes the parties’ sole and exclusive … Continue reading Exclusive remedies regimes: how exclusive is “exclusive”?
In PGF II SA v OMFS Company 1 Ltd, in addressing the question of unreasonably refusing to participate in ADR, Briggs LJ made the link between parties engaging with the ADR process and, in doing so, addressing the question of when ADR should take place. Two recent dilapidations cases demonstrate that parties must now consider … Continue reading Mediation update: the question of when and costs sanction for not getting on with it
There is no overarching statute governing mediation in England and Wales. Instead, a party who wants to know about mediation must turn to the civil procedure rules, court guides and the (now) many judgments that talk about it. Ireland is taking a different approach. Currently, the Oireachtas is considering the Mediation Bill 2017, a 24-page … Continue reading Mediation update: fundamental principles and the Irish Mediation Bill 2017
The Court of Appeal’s decision in Graham Leslie v Farrar Construction Ltd concerned whether an employer could recover a £300,000 overpayment for build costs made to a contractor. While the principles the court applied are well-established and generally uncontroversial, the outcome – that the employer could not recover the overpayment – may be surprising to … Continue reading Employer couldn’t recover overpayments made to contractor
The courts have recently taken the opportunity to remind parties about some of the things mediation may be able to do for their case. Mediation also now gets a specific mention in the new Construction and Engineering Protocol. Here’s what has been happening.
Parties often choose to be represented by claims consultants during the adjudication process. If the unsuccessful party in the adjudication does not pay up, it is often the case that a consultant’s involvement will continue beyond the adjudication proceedings. The question of whether the costs of such involvement may be recovered in court proceedings was … Continue reading You can recover (some of) a claims consultant’s costs (some of the time)
Over the last six months, the JCT has been quietly releasing parts of its new 2016 suite of standard form contracts. What started with the Minor Works Building Contracts (July), has now been joined by the Design and Build Contracts (September) and Standard Building Contracts (October), and is soon to be joined by the Intermediate and … Continue reading What’s new in the JCT 2016?
In Balfour Beatty v Grove Developments, the Court of Appeal has upheld, by a majority of 2-1, the TCC’s first instance decision and concluded that the contractor had no right to receive interim payments after the planned date of practical completion. The judgment not only addresses a number of interesting points of contractual construction arising … Continue reading Court of Appeal says you may be running out of time for interim payments
The general rule for compensation is stated in the well-known judgment of Livingstone v The Rawyards Coal Company: “… where any injury is to be compensated by damages, in settling the sum of money to be given for reparation of damages, you should as nearly as possible get at that sum of money which will … Continue reading Damaging times: a short note on depreciation, inflation and exchange rates
Recent weeks have brought a further decision on settlement agreements in the form of Caroline Gibbs v Lakeside Developments Ltd.
The judicial task is one fraught with difficulty: the complexity of the issues, the evolving nature of the common law, and the risk of appeal all figure large. This is particularly the case when judges turn to consider the correct interpretation of limitation and exclusion clauses, for two principal reasons: The law of interpretation of … Continue reading Court of Appeal in Transocean interprets limitation and exclusion clause
Saga Cruises BDF Ltd v Fincantieri SpA is a recent decision of Ms Sara Cockerill QC sitting in the Commercial Court and concerning a contract to dry dock, repair and refurbish a cruise ship. It provides a welcome opportunity to revisit the principles governing a contractor’s entitlement to an extension of time for completion of … Continue reading Concurrent delay – the “Saga” continues
The dust has had a bit of time to settle since Edwards-Stuart J’s decision in Commercial Management (Investments) Ltd v Mitchell Design and Construct Ltd, which was handed down in January. Since then, the sub-contractor has been refused permission to appeal, and the litigation has now been settled. Despite this, the decision does raise some important … Continue reading Conditions precedent and the potential application of UCTA
The courts have often stressed that parties should mediate early before litigation hardens attitudes and costs become an additional aggravating factor. In Kupeli and others v Sirketi (t/a Cyprus Turkish Airlines) and another, the High Court restated the now familiar message that parties should discuss or negotiate their dispute early.
There are many reasons why a party might wish to change expert witness. For example, the litigation may have dragged on for some time and the expert may wish to be released, a fee (or other) dispute may have arisen and sometimes it becomes apparent that they are simply not up to the job. The … Continue reading The cost of switching experts
In Carillion Construction Ltd v Emcor Engineering Services Ltd and others, an issue arose as to the proper interpretation of a relatively unusual extension of time clause in a standard form construction contract. Carillion contended that the particular nature of the clause warranted a departure from the method by which extensions of time are usually added … Continue reading Extension of time orthodoxy prevails in Carillion v Emcor
Two recent decisions have provided a good opportunity to re-examine an old debate. In interpreting contracts, to what extent is it legitimate to look at words that the parties have deleted in order to construe the remaining words?
In Burgess and another v Lejonvarn, Alexander Nissen QC (sitting as a Deputy High Court judge) determined that the defendant owed a duty of care in tort to her former neighbours in connection with what the court held to be the provision of a number of professional services on their garden project. This was so irrespective … Continue reading Blurred lines between liability in contract and tort
This post considers two independent, albeit related, issues: What if a deed has been signed and executed by only one party? In what circumstances will there be a valid contract where the parties envisage execution of a further document in respect of the terms of an agreement, which document is not in fact subsequently executed?
With Christmas fast approaching (along with terrible cracker jokes – I’m sorry, and thank you for reading on), you might be forgiven for missing the costs decision in Van Oord UK Ltd and Sicim Roadbridge Ltd v Allseas UK Ltd (OSR and AUK respectively). However, it provides a useful consideration of whether, and if so when, a defendant’s … Continue reading When is a door not a door? When it is ajar!
Recent weeks have brought two further decisions concerning an unreasonable refusal to mediate. The message from the courts on when to deal with a request to mediate is now clear: parties are expected to respond promptly. The message on how parties should respond is more opaque. The courts, with Halsey v Milton Keynes no doubt in mind, … Continue reading Mediation update: indemnity costs for unreasonable refusal to mediate and no dispute too intractable
In Marks and Spencer plc v BNP Paribas Securities Services Trust Company (Jersey) Ltd, the Supreme Court has clarified the law on implied terms. In doing so, it appears to have consigned Lord Hoffmann’s decision in Attorney General of Belize v Belize Telecom Ltd to history.
This post considers the implications of the Supreme Court’s ruling on penalty clauses in Cavendish Square Holding BV v El Makdessi and ParkingEye Ltd v Beavis but first, the background to the penalty rule.
Recent weeks have seen a flurry of decisions relevant to mediation, considering issues as varied as the courts’ ability to compel parties to mediate, failure to attend a mediation and the drafting of settlement agreements.
Earlier this year, Akenhead J handed down judgment in Mears Ltd v Shoreline Housing Partnership Ltd, the last in a trilogy of cases of the same name dealing with, among other things, the nature and scope of estoppel by convention. The case makes essential reading for the construction practitioner, not least because of its discussion of the … Continue reading Estoppel by convention: a shield or a sword?
It is comparatively rare that TCC decisions make their way up to the Court of Appeal, so, when they do, the judgments usually contain something of note for the construction practitioner. The judgment in Northrop Grumman Missions Systems Europe Ltd v BAE Systems (Al Diriyah C4I) Ltd is no exception. Although the court itself appeared keen … Continue reading Court of Appeal guidance on incorporation of terms and limits of the factual matrix
Just over a year ago, I wrote a piece for this blog considering where the burden of proof lay if an adjudicator’s decision was challenged in subsequent litigation. If the adjudicator had, for example, decided that a contractor was entitled to additional payment for a claimed variation, would the employer have to disprove that entitlement, or … Continue reading Walker and the burden of proof: where are we after Aspect?
On 1 October 2015, new far reaching regulations come into force that (subject to limited exceptions) will affect all businesses in the UK which sell goods, services or digital content to consumers. This will include many traders in the construction industry. The regulations are contained in the Alternative Dispute Resolution for Consumer Disputes (Competent Authorities and … Continue reading Are you trading with consumers? Complying with the new ADR Regulations (part 2)
On 1 October 2015, new far reaching regulations come into force that (subject to limited exceptions) will affect all businesses in the UK which sell goods, services or digital content to consumers. This will include many traders in the construction industry. The regulations are contained in the Alternative Dispute Resolution for Consumer Disputes (Competent Authorities and … Continue reading Are you trading with consumers? Complying with the new ADR Regulations (part 1)
With recent stark increases in court fees, new guidance from the TCC on proportionality and another case on unreasonable refusal to participate in ADR, is it time for parties to revisit the question of why they should mediate?
Two recent decisions in the TCC have considered the circumstances in which indemnity costs are awarded in adjudication enforcement hearings: Savoye and Savoye Ltd v Spicers and Eurocom v Siemens.
On numerous occasions the courts have emphatically stressed the need to comply with the Pre-Action Protocol for Construction and Engineering Disputes (the Protocol). Sometimes, however, a claimant is hard up against the expiry of the limitation period and, as the lesser of two evils, has to issue proceedings without complying with it. In such circumstances … Continue reading Issuing a TCC claim before complying with the Protocol: “extreme peril”?
I’m often asked how parties can be successful at a mediation. My answer is always that there are two rules parties need to follow: Rule 1: prepare for a mediation and not trial, arbitration, adjudication or anything else. Rule 2: prepare for your specific mediation, and not just any mediation. Now, although these two rules do sound … Continue reading Two rules and some practical tips for mediation
Often parties engaged in proceedings want to park those proceedings while they turn their attention to alternative dispute resolution (ADR). In some types of dispute, judges favour a stay for ADR. Indeed in any boundary, right of way or other neighbour dispute (as I discussed last month in relation to Norris J’s decision in Bradley … Continue reading Parties in the TCC: prepare for trial and to settle
In adjudication, the identity of the adjudicator can be of critical importance. Not only do adjudicators decide the referred dispute, they also deal with questions of jurisdiction, and manage the fairness of the process. Some experienced users of adjudication develop favourites or those they would rather avoid. Not surprisingly, referring parties have sought to influence … Continue reading Eurocom v Siemens: a “strong prima facie” case of fraudulent misrepresentation
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 … Continue reading Multi-tiered dispute resolution clauses. What are they? Why include them? Are they enforceable?
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 … Continue reading Why try to resolve a neighbour dispute using mediation?
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, … Continue reading TCC decides unreasonable refusal to mediate but for other reasons imposes no costs sanction
With the advent of online legal resources and, in particular, the online availability of legal textbooks such as Chitty on Contracts, many lawyers do away with purchasing hard copy practitioner’s texts. I always think that is a bit of a shame. I am surely not the only one who has been scrabbling around Chambers the … Continue reading The curious case of CPR 7.7
In JSC BTA Bank v Ablyazov and others, the claimant Kazakhstani Bank sought disclosure of documents concerning Mr Ablyazov’s assets from Mr Ablyazov’s current and former solicitors. It was agreed that these documents would attract legal professional privilege unless falling within the so-called “iniquity exception”. As the judgment arguably widens the application of this exception, those acting in … Continue reading Legal professional privilege versus the iniquity principle
This post considers some of the advantages (financial and otherwise) of mediating, as well as looking at how best to prepare for the mediation of a delay claim and how best to present a delay claim at a mediation.
Consequential loss exclusion clauses are very common in commercial contracts, especially in those relating to construction and energy projects. They usually take a similar form to the following, which is from clause 17.6 of the FIDIC Red Book: “Neither Party shall be liable to the other Party for loss of use of any Works, loss … Continue reading Consequential loss exclusion clauses: the pitfalls
Relief from Sanctions: The background Following the implementation of the Civil Procedure Rules it was widely considered that the courts were being too indulgent in their attitude towards parties that failed to comply with deadlines imposed by rules, practice directions and court orders. This general perception led to the publication of the Review of Civil … Continue reading Denton: Mitchell clarified and amplified
Mediation remains a hot topic. Section 7 of the TCC Guide (ADR) has just been revised and there are two recent cases about an unreasonable refusal to engage in ADR, R (on the application of Paul Crawford) v The University of Newcastle-upon-Tyne and Garritt-Critchley v Ronnan.
Much has been said and written about the decision in Mitchell v News Group Newspapers Ltd on the new, stricter approach to applications under CPR 3.9 for relief from automatic sanctions. However, relatively little has been said about the consequences of the Mitchell sanctions for the ongoing conduct of the action. This post considers two common types … Continue reading Surviving Mitchell: what happens when you serve witness and expert evidence late?
The third revision of the second edition of the TCC Guide was published on the MOJ website on 1 May 2014. The first edition of the Guide since the Jackson reforms, it contains interesting and important changes from the second revision, published in October 2010. Here are a few of my selected highlights for practitioners to watch … Continue reading The new TCC Guide: post-Jackson pitfalls
Hastings pier opened in 1872, enjoyed its prime in the 1930s and was a popular music venue in the 1960s, with many notable bands (including the Who and the Rolling Stones) playing there. But, like all Victorian piers, it reached the end of its design life and has, more recently, been in increasing dilapidation. The … Continue reading A first under the Building Act 1984 (part 2)
Mediation is fast becoming a popular method of alternative dispute resolution in many areas of law. The courts’ support for mediation is evident from the many decisions, including PGF II SA v OMFS Company 1 Ltd (which I looked at last year), emphasising that parties should attempt to resolve their dispute early and without being encouraged … Continue reading Mediation: some frequently asked questions
A simple question perhaps, but is the answer just as simple? Since the Construction Act 1996 came into force, the general position has been that, unless the parties agreed (either contractually or specifically in relation to an adjudication), that the adjudicator had jurisdiction to determine whether one party would pay the other party’s costs (legal … Continue reading Are adjudication costs recoverable or not?
A contractor and employer are in dispute as to whether a particular item of work constitutes a variation under their contract. The contractor starts an adjudication to resolve the dispute. The claim succeeds and the resulting adjudicator’s award is paid by the employer, who then issues court proceedings to recover the money. Does the employer … Continue reading Adjudication: reversing the burden of proof?
What is the correct approach to causation in cases concerning natural nuisances where a landowner does nothing at all to abate such a nuisance on his land? That was the question for the Court of Appeal in Robbins v London Borough of Bexley, a case that concerned property damage caused by tree roots.
The background to this case is well known. The Sun newspaper reported that the then Chief Whip of the conservative party had engaged in a foul mouthed rant against police officers at the entrance of Downing Street. Mr Mitchell alleged defamation against the Sun and the Sun defended the action on the basis of justification and … Continue reading The implications of Mitchell v News Group Newspapers Ltd
Almost ten years ago, the Court of Appeal addressed, as a matter of principle, the extent to which it was appropriate for the court to use its powers to encourage civil litigants to settle their disputes. In Halsey v Milton Keynes General, it held that a successful party can be deprived of all or part … Continue reading Warning about unreasonably refusing to participate in ADR as Halsey principle extended
Public procurement is a hybrid of commercial and public law. It comprises a set of statutory rules, based on European Union law principles of non-discrimination and transparency, which are designed to ensure fair competition between companies from different member states. If a public body (a “contracting authority”) infringes the rules, an economic operator who may … Continue reading The use of mediation to resolve public procurement disputes
An aggrieved tenderer will always want to find out as much as possible about what happened during a procurement process in order to fully understand why its bid failed. For most procurements (other than those either under threshold or for Part B services), the Public Contracts Regulations 2006 (SI 2006/5) (and as amended) (Regulations) contain … Continue reading Disclosure in public procurement challenges
Two recent High Court decisions (AB and another v CD Ltd and Newbury v Sun Microsystems) illustrate the importance of knowing early each and every settlement term either desired by your client or necessary to make the settlement work.
In April 2013, I wrote about mediation and costs management, which were hot topics as a result of the new Civil Procedure Rules. Since that blog, there have been three cases of particular interest in relation to mediation and costs management.
Last time, I looked at recent developments in mediation, including in light of the new Civil Procedure Rules. This time, I’m looking at the mediation of neighbour disputes. Neighbour disputes often have two common features: hostility and (if the dispute goes as far as trial) the potential for huge legal costs to be run up. … Continue reading Advantages of mediation in neighbour disputes
Hastings pier opened in 1872, enjoyed its prime in the 1930s and was a popular music venue in the 1960s, with many notable bands (including the Who and the Rolling Stones) playing there. Like so many Victorian piers, since then, the pier was not kept in good repair (it also suffered major storm damage). Consequently, in … Continue reading A first under the Building Act 1984
Jackson LJ’s final report recommended that “there now needs to be a single authoritative handbook, explaining clearly and concisely what ADR is” and that “most judges and litigators would have the current edition of the proposed handbook on their bookshelves”. The Jackson ADR Handbook was published in April 2013. It contains a foreword from Lord Dyson … Continue reading The Jackson ADR Handbook really is essential reading
Mediation is a hot topic at the moment. One reason for this is because of Sir Alan Ward’s judgment in Wright v Michael Wright Supplies Ltd; another is the changes to the Civil Procedure Rules (CPR), which came into force at the beginning of April.
In Jacobs UK Ltd v Skidmore Owings & Merrill LLP, Coulson J was asked to consider the meaning of an agreement that had been reached between Jacobs and SOM compromising their previous round of litigation. The case is a salutary warning of the need to ensure that the terms of any such agreement are clear … Continue reading Compromise agreement should be clear and comprehensive
In Adyard Abu Dhabi v SDS Marine Services, the Commercial Court had to determine whether SDS could rescind two shipbuilding contracts and reclaim the sums it had paid to Adyard. Adyard had commenced proceedings, arguing that SDS could not rescind, as SDS had caused delays to the project. Adyard cited the prevention principle: the principle that SDS could not rely on the consequences … Continue reading Relevant event must cause actual delay
To the surprise of the man on the street, relatively low value disputes are difficult to litigate cost effectively. Often the value of the claim is soon exceeded by each party’s legal costs. At the end, when one side comes second, it is presented with a very large bill. Mediation offers the parties a way to avoid this.
In December 2010, I was involved in resisting an application to lift the automatic suspension imposed by regulation 47G(1) of the Public Contracts (Amendment) Regulations 2009 (SI 2009/2992) (2009 Regulations) so as to enable a hospital trust to award a public contract to the successful tenderer. This post sets out my experience of the court’s approach … Continue reading Lifting the automatic suspension in public procurement after Indigo and Exel
Cases relating to the definition of “construction operations” under section 105 of the Construction Act 1996 often concern adjudication, and not payment. However, whether a contract is a “construction contract” for the purposes of the Construction Act 1996 affects the parties’ payment obligations as well as their right to adjudicate.
The decision in Pilon v Breyer Group addresses some very interesting issues on adjudication enforcement. It is probably one of the more important decisions to have emerged this year. Broadly speaking, the judgment clarifies the law on two main issues: Enforceability of adjudicators’ decisions where an adjudicator has wrongly excluded one of the responding party’s … Continue reading TCC reviews enforceability and severability of adjudicators’ decisions
The recently released judgment of Edwards-Stuart J in Geoffrey Osborne Limited v Atkins Rail could have a major impact upon adjudication enforcement and substantially affect the enforceability of adjudicators’ decisions. It raises two important issues: The use of CPR Part 8 proceedings to avoid enforcement. Obtaining final determination of only part of a dispute.
2009 will not, perhaps, be remembered as a ground breaking year in construction law. There has been no single case that has got people talking like, say, Melville Dundas v George Wimpey did, and adjudication-related cases have continued to show that the Technology and Construction Court (TCC) is extremely reluctant to allow parties to avoid the effect of decision … Continue reading Cases and developments in construction law: 2009
Claims for interest are particularly contentious at present as: The base rate is 0.5%. Banks and building societies are only offering low interest rates on savings. The current economic climate has led some to bring previously forgotten claims on the eve of the limitation period expiring.
In SG South v King’s Head Cirencester & Anor, the contractor sought enforcement of two adjudicators’ decisions under a JCT management form of contract. The subject matter of both adjudications was the enforcement of interim payment certificates in the absence of any withholding notices issued by the employer. In both adjudications, the employer raised a defence of … Continue reading Alleging fraud in adjudication proceedings
At the time of issuing proceedings, the parties may or may not have complied with the Pre-Action Protocol for Construction and Engineering Disputes (Protocol). Limitation issues, for example, may have prevented compliance. Alternatively, the parties may just not have entered into the spirit of the Protocol.