Practical Law

The Building Safety Act 2022 (BSA 2022) creates a whole new world of building safety regulation and litigation. A key legislative objective was to regulate and direct responsibility for the cost of works to remedy building safety issues, so that the risk of such costs could no longer be the subject of agreement between landlord … Continue reading Building Safety Act 2022: changing the rules on the landlord and tenant relationship →

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. … Continue reading Gama Aviation v MWWMMWM: the problem of contractual formalities and informal novation →

When a project goes so poorly that an employer feels obliged to terminate its main contractor, the employer will often take an assignment of various sub-contracts. But what exactly does it mean to “assign a sub-contract”? Of course, the employer may also claim against the main contractor for delay damages, additional costs to complete and … Continue reading Assignment of sub-contracts – benefit and burden, risk and reward in the TCC →

The courts enjoy a fairly regular diet of cases concerning the validity of calls on performance bonds and similar securities. I have blogged on this before, in early 2017. Bond issuers who are reluctant to pay out on a bond will raise either: A formal defence, for example that the demand is invalid because it … Continue reading Assignment and performance bonds: Sumitomo Mitsui v Euler Hermes →

The TCC does not like blocking ongoing adjudications or interfering in their conduct. To date, it has only done so in a few unusual cases. Recently, however, it has found a good reason to prevent an adjudication from proceeding, which could be of very wide application.

The beauty of an on demand bond or standby letter of credit is that the beneficiary can call the security instrument and pocket the money without having to prove that the contractor (or sub-contractor) is actually in default or owes the money. It is a separate, independent agreement between the beneficiary and the provider of … Continue reading “Mens rea” in calls under on demand security instruments →

The Supreme Court has handed down judgment in the cases of Cavendish Square Holding BV v Talal El Makdessi and ParkingEye Ltd v Beavis. It was not just the construction sector that waited patiently and speculated cautiously as to what the court would do with the rule against penalties. Would it confirm the current rule, … Continue reading Out of chaos arises order: Supreme Court confirms the rule against penalties in El Makdessi and ParkingEye appeals →

Two new cases on penalties have revived two old concerns. Do the courts interfere too much with the validity and operation of liquidated damages clauses? And if they do, is it always the employer that suffers? 

It is well recognised that because of its consensual foundation, arbitration can be difficult as a means of settling complex multi-party and multi-contract disputes. This has historically been a problem for construction practitioners and clients because an ever increasing proportion of large disputes are complex and involve multiple contracting parties.