REUTERS | Guglielmo Mangiapane
July 19, 2022

Applying to stay adjudication enforcement proceedings to arbitration

When I was looking at the list of TCC cases to find something to write about this week, my first thought was Adrian Williamson QC’s judgment in FTH Ltd v Varis Developments Ltd, where he refused to grant summary judgment to enforce an adjudicator’s decision due to the claimant’s company voluntary administration (CVA). Unfortunately for me, Simon Thompson beat me to it on that one. I would have made the point that I thought the judge’s dismissal of the claim was a warning to other insolvent parties. While Bresco may have given insolvent parties a right to adjudicate, as someone said to me recently, it might be “a first class ticket to nowhere” as the TCC will not enforce the adjudicator’s decision (something that both Coulson LLJ and Lewinson LLJ effectively said in their judgments in John Doyle Construction Ltd (In Liquidation) v Erith Contractors Ltd).

My second choice is HHJ Hodge QC’s judgment in Metropolitan Borough Council of Sefton v Allenbuild Ltd, where he enforced an adjudicator’s decision and rejected an application for a stay to arbitration. So here goes on a topic that is quite rare in adjudication enforcement proceedings, but possibly not as rare as hens’ teeth! Continue reading →

REUTERS |
July 15, 2022

Episode 12 of The Construction Briefing podcast

The Construction Briefing is an alternative way of learning about key developments in construction law, with the Practical Law Construction editorial team discussing some of the wider issues those developments raise.

In Episode 12, Michelle Rousell and Yassir Mahmood discuss the Court of Appeal’s judgment in Abbey Healthcare (Mill Hill) Ltd v Simply Construct (UK) LLP. They are joined by Barry Hembling, partner at Watson Farley and Williams, who has represented Abbey Healthcare throughout the litigation.

In addition to explaining what the Court of Appeal decided, they consider:

  • Who will welcome this decision and who might be worried by it?
  • In terms of drafting, what can you do to make sure that your collateral warranty can be adjudicated, and what can you do to make sure it can’t?
  • How does this judgment affect third party rights? Might parties start favouring them?

You can subscribe wherever you get your podcasts (like Apple Podcasts, Google Podcasts and Spotify), enabling you to download and listen to all episodes on the go on your phone. Alternatively, you can use our audio and video RSS feed to access the latest edition as soon as it is published.

To give feedback or suggest topics for future episodes, please use Ask to contact us.

REUTERS | Tobias Schwarz
July 13, 2022

Gama Aviation v MWWMMWM: the problem of contractual formalities and informal novation

The problem of what happens when parties do not act in accordance with contractual formalities is a hardy perennial in commercial disputes. Certain instances of the problem are peculiar to the construction industry, notably absent or inadequate notices of events giving rise to time and money, or absent or inadequate payment or pay less notices. Each of these has given rise to complex caselaw. Other instances are common to all commercial contexts. One is the practice of including a “no oral modification” clause in a contract, but then informally agreeing an amendment. This situation has proved sufficiently difficult to require a thorough review and restatement of the law by the Supreme Court in MWB Business Exchange Centres Ltd v Rock Advertising Ltd.

The recent case of Gama Aviation v MWWMMWM shows the issues thrown up by an informal novation of an agreement that one side said prohibited such informal variation, and the other side said made no provision for it. Continue reading →

REUTERS | Leonhard Foeger
July 5, 2022

How far does an interim valuation adjudication bind determination of the final account?

I was lucky enough to be asked to give a recent case law update lecture for the Adjudication Society. At the end one of the delegates asked a very sensible question, namely to what extent do matters decided by an adjudicator concerning an interim valuation bind later valuations. It’s an issue that I’ve been asked about before, and it’s also one of those that can promote polarising debate, with some extreme positions taken.

Although there have been plenty of TCC judgments dealing with the question of what constitutes the “same or substantially the same dispute“, I cannot recall one that deals directly with the question of the extent to which an adjudicator’s decision concerning an interim valuation will bind the subsequent determination of the final account. That is until Mrs Justice O’Farrell handed-down her judgment in Essential Living (Greenwich) Ltd v Elements (Europe) Ltd, which is the case I want to talk about this week. Continue reading →

REUTERS | Stephen Hird
June 29, 2022

FTH v Varis Developments – adjudication and insolvency meet head on again

In its decision in Bresco v Lonsdale, the Supreme Court confirmed that insolvent companies have the statutory and contractual right to adjudicate construction disputes, even if that claim is affected by insolvency set-off.

While Lord Briggs found overarching compatibility between the adjudication and insolvency regimes, that wasn’t to dismiss the difficulties arising between them, particularly those raised by insolvency set off. It is now settled law that these difficulties are not matters of jurisdiction: rather, they are factors for the courts to consider if the adjudication reaches enforcement stage on a case-by-case basis.

FTH Ltd v Varis Developments Ltd is the latest in a series of decisions (both before and after Bresco) that illustrates how the courts are grappling with insolvent parties’ applications for summary judgment to enforce adjudication decisions in their favour, this time in the context of a company voluntary administration (CVA). Continue reading →

REUTERS | Toby Melville
June 21, 2022

Adjudicator reaches decision in “procedurally unjust manner” so not enforced

Sometimes it feels that, as an adjudicator, you are damned if you do and are also damned if you don’t. In this case – Liverpool CC v Vital Infrastructure Asset Management (Viam) Ltd (In Administration) – it was both what the adjudicator did do and what he didn’t do that led the judge to issue a declaration that his decision was unenforceable.

But how did the judge, HHJ Stephen Davies, arrive at this point? Continue reading →

REUTERS | Jim Young
June 15, 2022

The obligation to pay a notified sum where the contractor is insolvent

The general rule created by section 111 of the Construction Act 1996 is well known: in the absence of a pay less notice, the notified sum is to be paid without set-off or deduction.

Although this is capable of causing problems for an employer in the short term, any overpayments can usually be corrected in future payment cycles (whether interim or final) or by a true value adjudication (following S&T (UK) Ltd v Grove Developments Ltd).

But what about when the contractor is or becomes insolvent? The concern for an employer here is obvious: money paid over to an insolvent contractor is liable to disappear into the general fund and be distributed at pennies in the pound, leaving the employer unable to recover the full value of any overpayment or cross-claims. There may not be any future payment cycles and, even if there are such cycles or a true value adjudication, it may be impossible to make a full recovery. Unlike the normal scenario, it will not simply come out in the wash.

What, therefore, can an employer do? Continue reading →

REUTERS | Toby Melville
June 14, 2022

Tort claims for economic loss on construction projects – Avantage v WSP

Construction claims usually arise out of a breach of contract, because it is easier to establish liability than under a tortious claim. However, where there is no contract or the contractual limitation period has expired, or a contracting party is insolvent or is uninsured, parties may have no choice but to bring a claim in tort.

To succeed in an action for negligence at common law, it is well established that a claimant must prove that the defendant owes it a duty of care, that the defendant has breached that duty, and that such breach caused the claimant to suffer loss.

But how do the courts apply these rules where there is a claim in tort for pure economic loss in the context of complex construction projects involving carefully negotiated construction contracts? Continue reading →

REUTERS |
June 13, 2022

Episode 11 of The Construction Briefing podcast

We have published the latest episode of our podcast, The Construction Briefing, featuring the Practical Law Construction editorial team.

This month, the team refer to further building safety developments, and also:

The Construction Briefing is an alternative way of learning about key developments in construction law, with our editorial team discussing some of the wider issues those developments raise.

You can subscribe wherever you get your podcasts (like Apple Podcasts, Google Podcasts and Spotify), enabling you to download and listen to all episodes on the go on your phone. Alternatively, you can use our audio and video RSS feed to access the latest edition as soon as it is published.

To give feedback or suggest topics for future episodes, please use Ask to contact us.

REUTERS | Tom Brenner
June 8, 2022

JCT Project Bank Account documentation – what’s changed in 2022?

In 1999, the first project bank account (PBA) was used on a Ministry of Defence project. Since that time they have been successfully used on a number of high profile major projects, for example Crossrail.

The government has promoted their use over the years and, since 2010, it has mandated their use on all government projects. The government’s 2020 Construction Playbook confirms that they should be used “unless there are compelling reasons not to”. Continue reading →