REUTERS |
September 22, 2015

Oral construction contracts and adjudication

It is almost four years since the amendments to the Construction Act 1996 came into force. In all that time, we haven’t seen the anticipated flurry of cases dealing with the new payment rules (although there has been handful in the last 18 months or so) or the consequences of extending the definition of construction contract through the repeal of section 107 to include oral contracts. Therefore, it came as a bit of a pleasant surprise to read Stuart-Smith J’s judgment in Purton (t/a Richwood Interiors) v Kilker Projects Ltd. Continue reading →

REUTERS | Srdjan Zivulovic
September 21, 2015

“Fair presentation of risk” and the Insurance Act 2015: what does it mean for the construction industry?

The Insurance Act 2015, which does not come into force until August 2016, changes the way in which insurance is conducted. The delay in commencement of the Act is intended, at least in part, to give insurers time to change their policy wording and procedures. It is likely that some of the new policy wordings and procedures will give rise to disputes and in the context of construction insurance in particular, there are likely to be issues relating to the concept of fair presentation of risk that is introduced by the Act.  Continue reading →

REUTERS |
September 15, 2015

Court of Appeal guidance on incorporation of terms and limits of the factual matrix

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 to emphasise that the case turned “on what is ultimately a short point of construction, raising no issues of principle”, two aspects of the decision are worthy of further comment. Continue reading →

REUTERS |
September 15, 2015

What to reasonably expect from your adjudicator’s decision

Part 1: hey good looking

It’s a real shame that the adjudication guidance produced by the Construction Umbrella Bodies Adjudication Task Group (CUBATG) has never been updated, as it really is very good. Unfortunately, it is now extremely out of date. There are also some excellent adjudication guidance notes produced by the likes of the RICS and the Adjudication Society but, like the CUBATG guidance, these guides don’t go into decision writing in any great detail. Nor does the Construction Act 1996 make any reference to what form a decision should take. Continue reading →

REUTERS | Darren Staples
September 11, 2015

The art of “kilting”: key differences between Scottish and English law when drafting construction contracts

Following the 2014 referendum, we may officially be “better together” but the legal systems in England and Wales and Scotland have always been subject to some stark differences. When dealing with a contract that is subject to Scots Law, what are the key differences and where should legal advisors look to adjust terms and conditions or their advice accordingly?

Kilting a contract

Converting an English law contract into a Scottish law equivalent will take more than adding a bit of tartan check to the front page and remembering that the two jurisdictions have different public holidays. Continue reading →

REUTERS | Thomas Peter
September 9, 2015

MF/1: The world moves on, but not everyone keeps up with the pace

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 older forms, almost as their standard terms and conditions, are comfortable with them and often reluctant to go through the process of updating internal processes in order to use the new version. Revision 6 may be hot off the press but Revisions 4 and 5 are still popping up at the party as old and faithful friends. Continue reading →

REUTERS | Carlo Allegri
September 9, 2015

Claims versus variations

An instructed variation is not the only way a contractor’s work under a project can be altered. Equally it is not the only contractual ground for the contractor to claim additional compensation. Construction contracts will normally also contain provisions allowing the contractor to make “claims”. For example, the site conditions may be different to those contemplated, such as unexpectedly bad ground conditions or restrictions on site access. Alternatively, the employer may fail to fulfil its obligations, such as providing design information or approvals late.

In each of these situations an event (or a discovery relating to the site) that is the employer’s risk under the contract, may result in the contractor undertaking the works in a different way as well as increasing its costs. Such events will typically give rise to a right to extra money (and possibly time) either under a particular clause of the contract or under a general claims provision, such as a loss and expense clause.

A comparison between variations and claims is interesting for a number of reasons, not least because of the possibility that the contractor may have a right, in certain circumstances, to choose which provision it relies upon to claim additional compensation. Continue reading →

REUTERS | Hannibal Hanschke
September 8, 2015

Chancery judge gives guidance on expert evidence

When I first started writing about experts, I wasn’t aware of how frequently the topic pops up in judgments, or the sort of issues that arise. Now it seems hardly a week goes by without a judge commenting on an expert’s good, or more often, bad behaviour or whether there is a need for an expert in a particular case.

We are all familiar with the fact that construction litigation (big or small) relies heavily on experts. While few of the cases I’ve been reading recently actually concerned construction disputes, the underlying principles affect us all. Therefore, I was interested to see a Chancery judge’s guidance in British Airways plc v Spencer and others on the principles for deciding whether expert evidence is necessary. Continue reading →

REUTERS | Shutterstock
September 1, 2015

Alliance contracting: the way forward?

Although alliance contracting has been used in the UK over the past 15 years, it has never quite won the affections of contracting parties here which has been achieved in other jurisdictions.  However, recent trends suggest that the move towards alliance contracting is gaining momentum. Network Rail has already moved to the alliance model for major infrastructure works and the Department of Health has used the alliance model for a major IT and services outsourcing project for the NHS. Continue reading →

REUTERS | Anindito Mukherjee
September 1, 2015

Hong Kong dips its toe into statutory adjudication

Well, in the words of Bananarama, it’s been a cruel cruel summer: well, at least August has. The weather has been shocking in the UK and I’ve heard more than one person say that they’ve already put their central heating on. Not only that, Matt and I have only had one TCC case to write about. Consequently, this week I thought I would look further afield, and specifically to Hong Kong.

Earlier in the summer, the Government of Hong Kong published a consultation on the introduction of Security of Payment legislation (SOPL) in the region, including statutory adjudication. I’ve been lucky enough to be invited to Hong Kong later this year to talk to prospective adjudicators on decision writing, so I’ve looked at the consultation in some detail. Continue reading →