REUTERS | Denis Balibouse
February 12, 2020

Crumbling edifices (again) – defective new homes and the “insurance” problem

You don’t have to be an avid reader of specialist construction magazines to know that the quality of new build housing is a big issue at the moment. Both the national press and social media are awash with stories (often sensationalised) of defects, cracks, subsidence, fire safety issues and all manner of other problems. The housebuilding industry is firmly in the spotlight.

New home buyers have always taken comfort from what is generically known as “NHBC cover”. That is, the 10-year insurance backed warranty schemes offered since 1936 by the NHBC and more recently by a range of other companies including Premier, Checkmate and BLP Insurance. Of course, a primary driver for taking out these warranties is that they are required by mortgage lenders who are members of UK Finance (previously the Council of Mortgage Lenders) in order to obtain a mortgage on a new home. However, they are also seen as a valuable form of consumer protection and have always been marketed as such by the NHBC and others.

Against that background, the Court of Appeal’s recent decision in Manchikalapati v Zurich Insurance plc makes depressing reading. I won’t rehearse the sorry tale that gave rise to the litigation, since this is well summarised in Charlie Thompson’s blog.  My focus is on the reaction of Zurich (and its successor, East West Insurance Company) when faced with the claim, and its efforts – apparently now heading to the Supreme Court – to avoid paying out under the policy. Continue reading →

REUTERS | Jose Cabezas
February 4, 2020

The devil may be in the detail of adjudicator appointments

As last year drew to a close, Lord Doherty handed down an adjudication enforcement judgment in Babcock Marine (Clyde) Ltd v HS Barrier Coatings Ltd, which was concerned with whether the adjudicator had failed to give reasons or failed to exhaust his jurisdiction. There was also an issue over whether there had been a material breach of the rules of natural justice and it is this latter point I’m going to look at today. Continue reading →

REUTERS | Hannah McKay
January 27, 2020

FIDIC 2017: two years on

Last month I attended the FIDIC International Contract Users’ Conference in London, two years after the formal launch of the 2017 Red, Yellow and Silver Books. I wanted to find out whether anyone was using them and if so, what did they think? In my blog following the 2017 launch, I made some initial observations. In this blog post, I consider how far these hold true. Continue reading →

REUTERS | Stefan Wermuth
January 22, 2020

Court of Appeal interprets liability cap in a new home warranty

On 5 December 2019, the Court of Appeal handed down its judgment in Manchikalapati and others v Zurich Insurance plc and East West Insurance Company Ltd. The underlying case concerned a large block of flats in Manchester that were seriously defective.

There are a number of lessons to learn from the Court of Appeal proceedings and much that is of use for construction and insurance practitioners alike.
Continue reading →

REUTERS | Shamil Zhumatov
January 21, 2020

When is an adjudicator prevented from opening-up, revising and reviewing?

First things first, Happy New Year to you all.

The case I want to talk to you about this week is ISG Construction Ltd v English Architectural Glazing Ltd, which was handed-down by HHJ Stephen Davies in December 2019. Those of you already aware of the case will know that it concerns ISG’s Part 8 application following an adjudicator’s decision it was dissatisfied with. Although the Part 8 issues raised are interesting (and I will briefly touch on them) as the title suggests, I want to focus on a different part of the case, namely a particular aspect of ISG’s bespoke extension of time provisions. Continue reading →

REUTERS | Corbis
January 15, 2020

Witness evidence in the TCC: reform is on the way

January is undoubtedly the most popular time of year for new year resolutions, but the Business & Property Courts (B&PCs) got a head start on all of us by publishing their 2020 resolutions in early December.

As many of you will be aware, in 2018 the B&PCs set up a Witness Evidence Working Group, consisting of B&PC judges (including Waksman J of the TCC), barristers, solicitors and in-house counsel, to consider whether factual witness statements in the High Court are fit for purpose. The working group has now published a set of recommended reforms that will be relevant for anyone practising in the TCC. Continue reading →

REUTERS |
January 14, 2020

Thoughts for the new decade: smart contracts, blockchain and construction dispute resolution

At the start of a new decade where automated, self-executing smart contracts are likely to become more commonplace, perhaps also in the construction sector, it is interesting to consider how such a development might impact construction dispute resolution processes. A smart contract is simply a computer protocol intended to facilitate, verify and enforce performance of a contract. In short, it is about contract law and related business practices being facilitated through the design of electronic commerce protocols. Understanding the role blockchain technologies can play in this context is key.

Notwithstanding the general success of construction adjudication as an interim form of construction dispute resolution, almost all final determination forms of construction dispute resolution remain lengthy and costly processes for all those involved. Marginal net economic wins even for the “successful” party regularly lead to both parties feeling dissatisfaction by the time the dispute is resolved. Even in the case of adjudication – and alternative dispute resolution processes – sunk costs can often feel disproportionate to the sums disputed, and there is an appetite for cheaper, swifter solutions – especially to resolving more straightforward and lower value claims. Continue reading →

REUTERS | Ivan Alvarado
January 7, 2020

Say hello to the twenties, wave goodbye to the twenty tens

Or should that be waving goodbye to the “one-ders”, the “tweenies”, the “tensies” or simply the “tens”?

I wasn’t sure what you are supposed to call the last decade and an internet search didn’t prove much help either, with various options coming up.

Perhaps you have a favourite way to refer to the last decade. I couldn’t decide which one I preferred, although I did think there was something rather charming about the Australian idea of “one-der”, mixing up the words “wonder” and the number one, which was part of every year. It begs the question of what you’d call the wonders of the last ten years, but that is another blog entirely. Today I’m looking at those things I’d like to see in 2020 (and beyond). Continue reading →

REUTERS | Russell Cheyne
December 17, 2019

Is lawfulness of occupation relevant to the residential occupier test?

We don’t see the section 106 residential occupier exemption appearing in the law reports all that often, possibly because the law surrounding its meaning is fairly well settled, particularly since Coulson J’s 2013 judgment in Westfields Construction Ltd v Lewis.

Therefore, I was rather intrigued by the judgment in Howsons Ltd v Redfearn and another. It dates from the summer but is an interesting read because the judge, HHJ Nigel Bird, appears to have extended the section 106 residential occupier test to cover the question of lawfulness of occupation. Continue reading →