REUTERS | Toby Melville
June 14, 2011

Economic loss: it’s just common sense

Whenever the law is unable to provide firm guidelines on a given matter, judges seem to fall back on that great legal cop out: it’s a matter of “common sense” or it is “fair and reasonable”. No area do they seem to rely on this more than in the law of tort or, more precisely, when dealing with the question of pure economic loss (when no physical damage or injury has been caused to people or other property).

The Court of Appeal (which included Jackson LJ), had the opportunity to give their thoughts on this issue in Conarken and Farrell v Network Rail Infrastructure. The facts giving rise to the claim, we are told at the beginning of the judgment, are “quite frequent”. So there must be a simple answer? Wrong… Continue reading →

REUTERS | Yuriko Nakao
June 10, 2011

Construction experts’ expertise and its regulation after Jones v Kaney

Much has been written about the anticipated impact that the Supreme Court’s decision in Jones v Kaney will have on expert witnesses and the evidence they give, whether they will need to change their behaviour in court or in the way they write their reports. Going forward, without the protection of expert immunity, it will be important that expert witnesses are aware that they are potentially liable to their clients for a breach of duty, even where the work relates to preparation for or involvement in legal proceedings. Continue reading →

REUTERS | Jason Lee
June 8, 2011

Costs management by the courts is here to stay

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 concerns for clients who are involved in litigation.

Therefore, it came as no surprise when the Civil Procedure Rule Committee (CPRC) announced that the Birmingham cost management pilot was being extended to all TCC and Mercantile Courts from October 2011. If anything, the surprise was that:

REUTERS | Luke MacGregor
June 8, 2011

A European contract law option: would it make a difference in the construction industry?

The European Commission considers that differences between national contract laws may entail additional transaction costs and legal uncertainty for businesses in the European internal market that, in turn, could lead to businesses being reluctant to engage in cross-border transactions. Therefore, in July 2010, the Commission published a Green Paper setting out its policy options for progress towards a European Contract Law for consumers and businesses.

Continue reading →

REUTERS | Juan Carlos Ulate
June 7, 2011

Are there reasons to be cheerful in an adjudicator’s decision?

I read an article recently all about who should pay for the reasons in adjudicators’ decisions. Cliff Wakefield, the author, argued that some adjudicators go too far, and write too much, and that their long-windedness costs the parties (usually the losing party) a disproportionate amount of money. He suggested that perhaps it is time that parties started asking adjudicators to limit the number of pages in their decisions. Alternatively, the party asking for reasons should agree to pay for those reasons, regardless of the outcome of the adjudication.

I began to wonder what the point of reasons is? Why do parties want (and expect) reasons, and why is it that the Scheme for Construction Contracts 1998 makes reasons optional (paragraph 22)? Continue reading →

REUTERS | Issei Kato
June 7, 2011

Latent Damage Act 1986: know your limitations

When the Latent Damage Act 1986 was introduced, many thought it was a sensible compromise between the need for a long-stop date and the need to protect those unaware of a latent defect. In essence it gives a claimant three years from the date when he knew or should have known of a problem to issue proceedings. However, it has not quite proved the panacea many had hoped. It was soon held to be confined to claims in tort, which are now relatively unusual in the construction field following the seminal decision of Murphy v Brentwood in 1990.

Continue reading →

REUTERS | Alexander Demianchuk
June 1, 2011

Robinson v Jones: have we heard the last word on builders’ concurrent duties in contract and tort?

In January 2011, the Court of Appeal handed down judgment in Robinson v Jones, which concerned the extent to which a building contractor could be held, in addition to its contractual obligations, to owe a duty of care in tort not to cause pure economic loss.

In delivering the leading judgment, Jackson LJ emphasised that the case amounted to a restatement of principles, set out by the House of Lords in the 1970s and 1980s. However, Robinson v Jones has generated interest because this is an area where there has been a degree of confusion. Even after Robinson v Jones, there still seems to be a fair degree of uncertainty in what is an evolving area of law. Continue reading →

REUTERS |
June 1, 2011

Honesty is the best policy part 2: the spreadsheet with the wrong result

In my last post I discussed what you do when you receive an offer which is too good to be true. But what if the contract terms are too good to be true. Can you take advantage?

The Court of Appeal seems to be saying that it all depends on how you behave…

…while ING Bank NV v Ros Roca SA is not a construction case, it is a recent decision by the Court of Appeal which makes some good points about how to interpret a contract and the importance of being honest.

Continue reading →

REUTERS | Luke MacGregor
May 31, 2011

May 2011 digest: more bank holidays

“Never cast a clout until May is out.”

This is a centuries old phrase that is generally taken to mean one shouldn’t discard winter clothing until the end of May. This year has been a bit different, with another record warm and dry month. To many of us, winter coats are a thing of our dim and distant past. Continue reading →

REUTERS | Ognen Teofilovski
May 31, 2011

Claiming interest in adjudication under Late Payments Act 1998

The adjudicator has no free-standing power to award interest and paragraph 20(c) of the Scheme for Construction Contracts 1998 (if it applies to the adjudication) does not give him one (Carillion v Devonport).

The adjudicator only has power to award interest if that issue has been referred to him or the parties have agreed it falls within the adjudicator’s scope. Alternatively, it may be a matter that the adjudicator considers is “necessarily connected with the dispute”. (This may all change when the revised Scheme is published but, for now, we don’t know when that will be or whether an adjudicator will be given wider powers to award interest, as he considers appropriate.) Continue reading →