REUTERS | Srdjan Zivulovic
REUTERS | Srdjan Zivulovic

Although a host of non-essential hospitality, leisure and retail premises were temporarily shuttered during the COVID-19 outbreak, construction sites across England, Wales and Northern Ireland were permitted to continue operations.

Yet initial sector-specific commentary from the government was bare-boned and ambiguous. Unsurprisingly, some contractors struggled with how to interpret and implement official guidance to protect workers practically.

In challenging circumstances, the industry often shows itself at its best, its members pooling knowledge and refining ideas. The Construction Leadership Council (CLC) launched its Site Operating Procedures (SOP) in March, providing a set of measures to adhere to rules on distancing and hygiene from Public Health England (PHE) to keep sites in England running. Continue reading

REUTERS | Toby Melville

Much has been written already about the Supreme Court’s judgment in Bresco Electrical Services v Michael J Lonsdale but, before you stop reading this blog because you’ve already read umpteen updates about the case, I want to assure you that I’m not going to talk about the insolvency issue. I’m not even going to summarise the facts of the case, as they aren’t relevant to the part of Lord Briggs’ judgment I want to focus on. If you want to know more about the facts and insolvency issues, I can do no better than refer to you what Jennifer Guthrie or Michael Levenstein had to say.

If you want to know what I’m going to discuss, there is a clue in the title but you’ll have to read on… Continue reading

REUTERS | Carlos Jasso

The future is very uncertain at the moment. There is significant financial uncertainty in the construction industry. With financial uncertainty comes insolvencies, and with that risk comes issues about ownership of goods and materials on site.

As a team we have been asked a number of questions about retention of title recently, and answering these questions can be like trying to catch sand. Continue reading

REUTERS | Vincent Kessler

Although handed down only a few days ago, practically everyone in the construction law world is already aware of the Supreme Court’s decision in Bresco Electrical Services Ltd (In Liquidation) v Michael J Lonsdale (Electrical) Ltd and the fact that it unanimously upheld the right of companies in liquidation to retain an unfettered right to commence adjudication proceedings. The court’s ruling effectively restores the law to the position it was prior to Fraser J’s decision at first instance almost two years ago.

This piece is not so much about recounting the facts or summarising the judgment, but rather taking a closer look at the court’s reasoning in coming to its decision and specifically what its practical consequences (some of them unintended) are likely to be for practitioners. In doing so, I will be considering the court’s analysis of the statutory right to adjudicate “at any time”, and what I consider the more problematic question of futility – that is, regardless of an insolvent company’s strict legal right to adjudicate, does it make any practical sense to permit it? Continue reading

REUTERS | Regis Duvignau

Long ago, as a kid growing up in what was then Lancashire, my parents took me for a ride on the Blackpool Tram. I well remember the clatter of the rickety old tramcar as it trundled along the promenade towards Fleetwood, its fading paintwork a sad reminder of Blackpool’s bygone heyday as a fashionable seaside resort.

I’m now old and rickety, but the Blackpool Tram has a new lease of life. In 2008 the Council embarked on an £85 million modernisation programme, including shiny new tramcars, track upgrades and a landmark new depot at Starr Gate. The depot was constructed by Volker Fitzpatrick (VF) under a design/build contract based on the NEC3 ECC. Completion was certified in May 2011 and the restored tramway came back into service in early 2012. Continue reading

REUTERS | Clodagh Kilcoyne

With construction and infrastructure sites increasingly operative around the world, and most governments keen to lift lockdown restrictions more broadly across their economies, it seems like an opportune time to ask ourselves what we have learnt about supply chains during the unprecedented times (in peacetime at least) we have been journeying through, and what that might mean for construction and infrastructure supply chains going forward. It is not just the UK Government that has had to learn tough lessons on procurement and risk distribution in global supply chains.

International construction and infrastructure supply chains are complex. Some have proven resilient, while others have not. Construction lawyers understandably tend to focus on construction contracts, but construction and infrastructure supply chains descend far below the main and subcontract levels with which we are familiar. The problems and challenges encountered further down supply chains are the genesis of much of the time and cost pressures resulting in claims under those contracts on which we advise. The COVID-19 crisis has, of course, been the ultimate storm, impacting labour, logistics, distribution, and merchants both simultaneously and globally. Continue reading

REUTERS | Issei Kato

It’s been a while since I last wrote about experts (last August to be exact, when I looked at “The good, the bad and the ugly” of expert witnesses). However, I couldn’t let the issues that cropped up in Essex County Council v UBB Waste (Essex) Ltd go without comment. If you read the judgment or, at least the relevant paragraphs (35-57), you’ll see what I mean. Continue reading

REUTERS | Navesh Chitrakar

The Supreme Court has handed down a judgment that will fundamentally affect construction insolvencies by allowing insolvent companies the unfettered right to start adjudications.

Today’s decision in Bresco Electrical Services Ltd (in Liquidation) v Michael J Lonsdale (Electrical) Ltd allows Bresco’s appeal from last year’s Court of Appeal decision. Pythagoras Capital acts, as it has throughout, for the liquidator of Bresco.

The decision firmly redresses the balance that was previously in favour of solvent construction companies and firmly against insolvent construction companies. It is a crucial development in a recent line of case law that recognises the importance of administrators and liquidators being able to recover debts owed to insolvent companies – using any mechanisms available.

From a public policy viewpoint, the decision could not have come at a better time. Given the current economic downturn caused by COVID-19, it is an unfortunate reality that there will be many more construction insolvencies in the coming months and years. Adjudication is a critical tool that has been denied to insolvent companies for too long. No longer. Continue reading

REUTERS | Leonhard Foeger

2020 is anything but normal. It is rare for there to be any judicial treatment of the ICC Uniform Rules on Demand Guarantees No. 758 (URDG 758) but 2020 has already brought us not one but two cases on its interpretation and applicability.

URDG 758 applies to all demand guarantees (commonly performance bonds or advance payment guarantees in the construction industry) that incorporate the rules. Despite being around for almost a decade, uptake and usage of URDG 758 has been patchy, which is often blamed on the rules not being sufficiently tested in the courts. 2020 court rulings may encourage users of demand guarantees, particularly in international construction projects, to now adopt URDG 758. Continue reading

REUTERS | Hannibal Hanschke

The TCC is continuing to pump out a large number of judgments despite hearings being conducted remotely due to the COVID-19 pandemic and, in May, no less than 13 judgments were published on BAILII.  By my reckoning you have to go back to October 2015 for such a number of judgments in one month. Perhaps remote hearings are working so well (for the judges at least) that we’ll see them continuing even after the lockdown restrictions are eased.

However, it’s a more recent judgment I want to focus on this week, namely the very clear and well written judgment by the new Judge in Charge, Mrs Justice O’Farrell DBE, in MW High Tech Projects UK Ltd v Balfour Beatty Kilpatrick Ltd. This was a Part 8 claim commenced by MW seeking a declaration that an adjudicator did not have jurisdiction to due to the dispute in question not having crystallised.

The “no crystallised dispute” jurisdictional challenge is one that I see quite frequently in adjudications, but it’s normally as a bolt-on to another challenge and not one that we often see reported in judgments from the TCC. My view is that this is because it is so difficult to make out a “no crystallised dispute” challenge, and this was one of the reasons the case caught my eye. The other reason is that it concerned new submissions concerning an extension of time, and this adds an interesting twist to the “no crystallised dispute” challenge under JCT contracts. Continue reading