The black holes of no loss arguments
In Pegasus v Ernst & Young the advice from Mr Justice Mann was that: “Whatever the metaphysician may say, the law says that the loss flowing can and should still be treated as a loss of the assignor which the assignee can recover. Black holes are to be (as all black holes should be) avoided … Continue reading The black holes of no loss arguments
Building safety gateway regime – frequently asked questions
One of the major changes to the regulation of the design and construction of “higher-risk buildings” is the introduction of the gateway regime. This regime comprises a series of “hard stops” that a construction project will need to pass through in order to proceed to construction, completion and then occupation. The gateways are: Gateway 1 … Continue reading Building safety gateway regime – frequently asked questions
BSA 2022 – the Accountable Person regime and key building information
A key concept introduced by Part 4 of the Building Safety Act 2022 (BSA 2022) is the Accountable Person (AP). Required in relation to every occupied higher-risk building, the AP is the “dutyholder” who has responsibility for the fire and structural safety of the building during occupation. Part 4 provides an overarching skeleton framework for … Continue reading BSA 2022 – the Accountable Person regime and key building information
Without prejudice privilege – guidance from the Privy Council
I advise many clients involved in construction projects who are on the cusp of a dispute. While they take legal advice on the merits of their position, my clients usually continue to seek to reach an amicable solution with their counterparty through direct negotiation as well as continuing to liaise on a day to day … Continue reading Without prejudice privilege – guidance from the Privy Council
Building Safety Act 2022: changing the rules on the landlord and tenant relationship, Part 2 – qualifying lease certificates
In a previous blog, I explored one aspect of the statutory reallocation of risk for the costs of works to remedy building safety issues in the Building Safety Act 2022 (BSA 2022). The focus of that blog was the new landlord’s certificate, designed as a tool for the landlord to communicate with leaseholders as to … Continue reading Building Safety Act 2022: changing the rules on the landlord and tenant relationship, Part 2 – qualifying lease certificates
Concurrent delay: the latest guidance from the courts
In Thomas Barnes & Sons plc v Blackburn with Darwen Borough Council, the TCC had to consider whether there was a concurrent delay and if so how did that affect the parties’ rights under the contract. The delay to the works in this case entitled the employer to terminate the contract and engage a third … Continue reading Concurrent delay: the latest guidance from the courts
FIDIC contracts – update on Conference and Rainbow Suite
I think all of the attendees of the FIDIC 2022 International Users’ Conference in London in November 2022 were delighted to be able to congregate in person, after two successive years of an on-line conference due to general pandemic restrictions. I know I was – not least because it meant I didn’t have to contend … Continue reading FIDIC contracts – update on Conference and Rainbow Suite
Retentions: the latest developments
On 10 November, NEC and the Construction Leadership Council (CLC) published guidance on how to reduce the use of retentions in NEC contracts. It recognises what they refer to as the range of views across the sector about the practice of retentions and the government’s 2018 consultation. As the Guidance notes, NEC provides an optional … Continue reading Retentions: the latest developments
Building Safety Act 2022: changing the rules on the landlord and tenant relationship
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
RICS Sustainability Report 2022: some green shoots?
In recent years there has been recognition within the UK construction industry of the importance of the reduction of carbon emissions. Major standard forms have responded to market demand and made provision for carbon reduction provisions, for example, JCT’s sustainability provisions, NEC’s Option X29 and FIDIC’s Climate Change Charter. In addition, organisations such as The … Continue reading RICS Sustainability Report 2022: some green shoots?
The updated Construction Playbook: what’s new?
Less than two years ago, the government published the Construction Playbook, a comprehensive and quite visionary plan for changing the delivery of construction projects in order to “get it right from the start”. If you haven’t looked at it so far, it is worth reading. It sets out what are transformational principles and policies, designed … Continue reading The updated Construction Playbook: what’s new?
Be certain, be specific and be clear: milestone judgment for liquidated damages
Recent case law has shown how careful parties need to be when drafting a liquidated damages (LDs) regime. The case of Buckingham Group Contracting Ltd v Peel L&P Investments and Property Ltd provides yet another example of what can happen if there is any ambiguity in the drafting. This blog takes a closer look at … Continue reading Be certain, be specific and be clear: milestone judgment for liquidated damages
Novation and some alternatives
A common scenario we are asked to advise on is this: a client acquires a building where several consultants have been engaged to carry out services but the building is sold before the services are completed. The client then wants the same consultants to continue to carry out those same services. Normally when a client … Continue reading Novation and some alternatives
Procuring tech for construction
There is no doubt that technology has been and will continue to transform construction. Technology is a wide term, but it is enough to mention concepts such as BIM and Digital Twins or look at the emphasis on modern methods of construction (MMC) in the Construction Playbook to get a feel for where construction is … Continue reading Procuring tech for construction
Cladding and fire safety: more reaction to Martlet v Mulalley
At the end of last month, Tom Coulson and Amy Armitage discussed the decision of Martlet Homes Ltd v Mulalley & Co Ltd, the first decision from the TCC on fire safety defects following the Grenfell Tower tragedy. This decision is highly significant for the construction industry, given the number of similar cases which are … Continue reading Cladding and fire safety: more reaction to Martlet v Mulalley
NEC and notices of dissatisfaction
Getting the notice right is important for all construction contracts and NEC is no exception. Failing to issue a notice as required under the contract can have serious consequences and in NEC this is often an issue that arises in relation to the obligation to notify compensation events within an eight week period (clause 61.3 … Continue reading NEC and notices of dissatisfaction
Abbey Healthcare v Simply Construct – opening the floodgates or the death of collateral warranties
Rights and wrongs aside, for almost a decade since the Parkwood decision, it has been clear that in certain circumstances a collateral warranty may be deemed by a court to be a “construction contract” for the purposes of the Construction Act 1996. This means that the parties will have the right to adjudicate at any … Continue reading Abbey Healthcare v Simply Construct – opening the floodgates or the death of collateral warranties
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. … Continue reading Gama Aviation v MWWMMWM: the problem of contractual formalities and informal novation
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 … Continue reading FTH v Varis Developments – adjudication and insolvency meet head on again
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 … Continue reading Tort claims for economic loss on construction projects – Avantage v WSP
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 … Continue reading JCT Project Bank Account documentation – what’s changed in 2022?
Co-insurance and subrogation rights under the spotlight once more
The case of The Rugby Football Union v Clark Smith Partnership Ltd and FM Conway Ltd joins a growing and I believe important line of cases dealing with issues of co-insurance and subrogation. (For commentary on these cases from my colleagues, see Blog posts, Insurance and subrogation, Co-insurance and subrogation rights revisited (again!), Joint insurance … Continue reading Co-insurance and subrogation rights under the spotlight once more
EV charging infrastructure – construction, projects, planning and tax issues
In the third and final blog in our series looking at common queries on the roll out of EV infrastructure (see our previous blogs on progress and challenges and landlord and tenant issues) we focus on construction, planning and tax aspects.
Does the platinum jubilee bank holiday entitle a contractor to an extension of time?
An additional bank holiday has been created in the UK this year to celebrate the Queen’s Platinum Jubilee. Does this entitle a contractor to claim an extension of time? A client recently asked this question in the context of a project using the JCT Design and Build Contract 2016. It certainly throws up a number … Continue reading Does the platinum jubilee bank holiday entitle a contractor to an extension of time?
EV charging infrastructure – landlord and tenant issues
In the second blog in our series looking at common questions we receive on the roll out of EV infrastructure, we focus on two queries we regularly see in the context of landlord and tenant relations.
EV charging infrastructure – progress and challenges
The EV infrastructure roll out to meet the government’s 2030 target of ending sales of all new petrol and diesel cars is well underway with the private sector rolling out digital charging “at pace”. At the end of March, the government published plans to supercharge progress (more on this below) with promises to do more … Continue reading EV charging infrastructure – progress and challenges
JCT’s insolvency payment regime – how does it work?
The case of Levi Solicitors LLP v Wilson and another considered the impact of contractor insolvency on debts owed to an employer under a JCT contract. Significantly, the court helpfully clarified how the payment regime under JCT contracts operated in the context of insolvency. This blog takes a closer look at the case.
Managing PFI contract expiry risks – updated IPA guidance
On 28 February 2022, the Infrastructure and Projects Authority (IPA) published its latest guidance to contracting authorities (CAs) on preparing for PFI contract expiry. It provides practical guidance on managing expiry and service transition. We have previously written about the IPA’s earlier guidance and its PFI expiry health check report. The guidance is also relevant … Continue reading Managing PFI contract expiry risks – updated IPA guidance
Lumley v Foster – the danger of oral contracts and contracting with the correct entity
Despite the volumes of case law illustrating the dangers of not having a written contract when carrying out a construction project, it is still common practice, particularly for smaller domestic projects and in this current market where builders are in high demand, for parties not to have a formal contract. Nine times out of ten … Continue reading Lumley v Foster – the danger of oral contracts and contracting with the correct entity
Amending cladding claims outside the limitation period. (E)PS, was it ever really compliant?
Post Grenfell, many building owners have discovered fire safety defects that need to be remedied. The question is: who should pay? As has been widely reported, the answer to this is rarely straightforward. There are variety of reasons for this, one of the main ones being that many of the claims against those who carried … Continue reading Amending cladding claims outside the limitation period. (E)PS, was it ever really compliant?
Constructing the Gold Standard – public sector frameworks
December 2021 saw the publication of the independent review of public sector construction frameworks, commissioned by the Cabinet Office, and led by Professor David Mosey PhD. Mosey was given the brief of creating a new “Gold Standard” for public sector frameworks and framework controls. His report, Constructing the Gold Standard, follows his consultation with over … Continue reading Constructing the Gold Standard – public sector frameworks
Construing a parent company guarantee: primary or secondary obligation… or both?
The issue of whether a parent company guarantee (PCG) creates a secondary liability (as opposed to a primary obligation) has been taxing the courts again. Reminder: a true “guarantee” is only ever a secondary obligation, governed by the legal doctrine of surety. It is very different from a primary obligation that arises where an indemnity … Continue reading Construing a parent company guarantee: primary or secondary obligation… or both?
FIDIC contracts – what’s new for 2022?
The title of my review of the last online FIDIC conference a year ago, FIDIC contracts – a preview of what is to come, now has a somewhat ominous ring to it as for the second year running the International Users’ Conference had to convene online in December 2021 due to the current COVID-19 situation. … Continue reading FIDIC contracts – what’s new for 2022?
A refresher on copyright – Lennox Estates v S&W Ventures
Imagine… you own a site. You give an option to a developer to buy that site subject to obtaining planning permission. It gets the planning permission, using planning drawings prepared by a firm of architects that it engages, but the option to buy the site lapses. You sell the site (which now comes with planning … Continue reading A refresher on copyright – Lennox Estates v S&W Ventures
FIDIC Climate Change Charter: what does it all mean?
An estimated 70% of global carbon emissions come from the building and operation of infrastructure with a staggering seven percent of global carbon emissions coming from concrete alone. If we are to come anywhere close to achieving net zero by 2050, the construction and engineering community must play a crucial and immediate role. FIDIC, the … Continue reading FIDIC Climate Change Charter: what does it all mean?
Good faith, NEC clauses 10.1 (and 10.2) and aspirations
Here we go again. Good faith is a concept that some lawyers do not like but industry people don’t seem to have a problem with, which is highlighted by the widespread use of the NEC form of contract. I first blogged on good faith and NEC3 in 2014, looking at what clause 10.1 is for … Continue reading Good faith, NEC clauses 10.1 (and 10.2) and aspirations
Third time’s a charm: can a single dispute include multiple sub-issues in adjudication?
“Quick and dirty” is not a phrase that we usually associate with dispute resolution. However, as many construction practitioners will know, adjudication provides an exception. Speed has its benefits but it rarely makes things simple. As our colleague, Ravinder, explained in her blog, adjudication is not always a straightforward process. Many disputes involve multiple, complex … Continue reading Third time’s a charm: can a single dispute include multiple sub-issues in adjudication?
Payment notices: what genuine belief is needed to make a payment notice valid?
The genuine article? Does a valid payment notice need to set out the sum the payer genuinely considers due? The requirement that a valid payment notice must set out “the sum the payer considers due” is often at the centre of payment disputes. The recent decision in Downs Road Development LLP v Laxmanbhai Construction (UK) … Continue reading Payment notices: what genuine belief is needed to make a payment notice valid?
Hobson’s choice, the latest on economic duress
“I’m going to make him an offer he can’t refuse”, was Vito Corleone’s favourite negotiating tactic. While his methods are a far cry from how things are done in the construction industry, commercial pressure can be used to force a party to accept an unfavourable deal. When does such behaviour cross the line and become … Continue reading Hobson’s choice, the latest on economic duress
Supply shortages and the impact on construction projects
As has been well-known in the industry for some time and is also now being picked up by the mainstream media, UK construction is currently under considerable pressure due to global shortages of key materials. The combination of a worldwide surge in demand for essential materials, as existing projects are revived and new projects are … Continue reading Supply shortages and the impact on construction projects
Dwyer we not able to terminate our contract for COVID-19?
Since the COVID-19 pandemic began, a key question for practitioners has been whether COVID-19 constitutes a force majeure event and so entitles parties to relief under contracts that include force majeure provisions. Much has been written on how little case law there is on this topic and how English law does not recognise force majeure … Continue reading Dwyer we not able to terminate our contract for COVID-19?
How to avoid PFI contract expiry risks
Private finance initiative (PFI) projects tend to be long-term, usually lasting for a period of 25 years or more. There is an active secondary market for equity interests in PFI projects: original project developers exit and new longer term investors hold projects to maturity. Notwithstanding this longer-term investment horizon, as time goes on, it is … Continue reading How to avoid PFI contract expiry risks
Professional advisers beware – check the terms of your engagement
The scope of duty and the extent of liability of professional advisers are two hotly contested issues at the core of many a dispute between professional advisers and their clients in negligence claims. For the last 24 years, the judgment in South Australia Asset Management Corp v York Montague Ltd, popularly referred to as SAAMCO, has … Continue reading Professional advisers beware – check the terms of your engagement
Try before you buy: the price of expert shopping
When it comes to replenishing my wardrobe, I have little patience for the careful selection of clothes for style and fit (this should come as no surprise). Instead, I am one of those who buys a job-lot of clothes once or twice a year to see me through the next couple of seasons. When I … Continue reading Try before you buy: the price of expert shopping
Third time lucky: Supreme Court allows recovery of liquidated damages in Triple Point v PTT
Those you of you with an interest in construction law will no doubt have heard of the case of Triple Point v PTT, which concerned whether liquidated damages (LDs) are payable in the event of termination. The first judgment was given by Jefford J in 2017 and the Court of Appeal gave judgment on the … Continue reading Third time lucky: Supreme Court allows recovery of liquidated damages in Triple Point v PTT
Building safety: gateway two levy
The eagerly awaited consultation on the new building safety levy (Levy) and its possible impact on housing supply and regeneration was published on 21 July 2021. It runs for 12 weeks, ending on 15 October 2021. The new Levy, first announced by Robert Jenrick MP in February 2021, will be introduced through regulations (yet to … Continue reading Building safety: gateway two levy
Proposed changes to the Defective Premises Act
Many changes have been introduced since Grenfell to address the cladding crisis including the establishment of various loans, funds, plans for new regulators, new taxes, levies and new rules to govern building safety throughout the lifetime of a building. Last weekend, news broke of the latest initiative: extending the limitation period for homeowners to claim … Continue reading Proposed changes to the Defective Premises Act
Too much of a good thing: serial adjudication, multiple disputes and NEC
Adjudication has now become the default dispute resolution method for construction disputes, to the extent that some parties use it on multiple occasions and for multiple disputes. But that carries its own risks and complexities, as highlighted in the recent decision in Prater Ltd v John Sisk and Son (Holdings) Ltd. This decision concerns the … Continue reading Too much of a good thing: serial adjudication, multiple disputes and NEC
Everybody needs good NABERS – accommodating the new rating scheme in construction contracts
There’s a new kid on the energy efficiency ratings block in the United Kingdom. NABERS UK Energy for Offices, a cousin of the established Australian system, officially launched in the UK in November 2020. The NABERS UK system focuses on the energy efficiency of office buildings when they are in use, to gauge actual performance … Continue reading Everybody needs good NABERS – accommodating the new rating scheme in construction contracts
Transport for Greater Manchester v Kier Construction: Notice the little things
Preparing and sending contractual notices always makes me nervous. There are so many things to get wrong: is it in time, where should I send it, who to, how should I send it? Not to mention the actual content of the notice. For those of you like me, the recent case of Transport for Greater … Continue reading Transport for Greater Manchester v Kier Construction: Notice the little things
Are DABs the new adjudication?
The JCT Dispute Adjudication Board Documentation 2021 (JCT DAB) has now been published, for use with the 2016 Design and Build Contract (DB) and the Major Project Construction Contract (MP). But, before we look at how it will operate, it is worth stepping back and looking at what dispute boards are meant to do and … Continue reading Are DABs the new adjudication?
How will the new UK residential property developer tax work?
On 29 April 2021, the government published a consultation on what is to be called the Residential Property Developer Tax (or RPDT). This sets out proposals for the design of a new tax to be charged on the largest residential property developers. The plan is for the tax to be introduced from April 2022 (through … Continue reading How will the new UK residential property developer tax work?
The subjective objective theory of contract interpretation and google
As recently discussed, contract interpretation is, relatively, easy when the words are very clear. But once a potential ambiguity is identified, it becomes necessary to look at what makes commercial sense, as well as what has been described as the factual background, or the “matrix of fact” referred to in Prenn v Simmonds. More recently, … Continue reading The subjective objective theory of contract interpretation and google
Limitation period for a tortious claim: when does it end?
Some breaches of contract do not become apparent until many years have passed. This is especially true where the result is a defect. Recently, our colleague Charlotte Mears blogged on limitation periods under contract. But what happens after the limitation period under a contract has expired? This blog explores the extent to which an answer … Continue reading Limitation period for a tortious claim: when does it end?
Limitation periods for breach of contract claims: where to begin?
On the face of it, the law of limitation seems fairly straightforward. The law in England and Wales specifies that anyone bringing a breach of contract claim has six years from the date of the breach in which to do so. This period is extended to 12 years from the breach of contract if the … Continue reading Limitation periods for breach of contract claims: where to begin?
A final account problem – JSM Construction v Western Power
The final account is normally a wrap-up of the contractor’s valid claims for extra payment. It’s particularly helpful if claims were not submitted or assessed as works progressed. So, what happens if the contract doesn’t have a final account procedure but there are claims outstanding once the works are finished? Can a final account procedure … Continue reading A final account problem – JSM Construction v Western Power
Contract interpretation – who has commercial common sense?
The dust is slowly settling over the arguments about how contracts should be interpreted. We know that “this is not a literalist exercise focused solely on a parsing of the wording of the particular clause” and that “[t]extualism and contextualism are not conflicting paradigms in a battle for exclusive occupation of the field of contractual … Continue reading Contract interpretation – who has commercial common sense?
The VAT reverse charge is coming soon. So what else is new?
If the Brexit deal, ongoing Covid-19 developments and updates on the Building Safety Bill and the Corporate Insolvency and Governance Act isn’t enough to keep those in the construction industry on their toes, the latest guidance from HMRC is that the VAT reverse charge on construction services will commence from 1 March 2021. In our … Continue reading The VAT reverse charge is coming soon. So what else is new?
FIDIC the disruptor: Liquidated damages to compensate the contractor for employer delay
Whether it’s the electric motor to the combustion engine or cryptocurrency to currencies, every industry seems to have a disruptor – perhaps we’ve found one in FIDIC for the construction industry and its re-imagining of the use of liquidated damages (LDs) in the soon-to-be published Green Book. The special pre-release version of the new edition … Continue reading FIDIC the disruptor: Liquidated damages to compensate the contractor for employer delay
FIDIC contracts – a preview of what is to come
Last month, in what feels like a lifetime ago (when there was no third lockdown or even Tier 4, no new COVID variant and no Brexit deal), I attended the digital FIDIC International Contract Users’ Conference from the comfort of my home. Top marks for effort by the organisers and for the virtual networking possibilities … Continue reading FIDIC contracts – a preview of what is to come
NEC4: 2020 amendments
NEC4 was published in 2017. The first set of amendments were published in January 2019 and now, in the space of three years, we have the second set, published in October. Most standard forms do not publish updates so prolifically and (certainly for this year with all its changes) you could argue more’s the pity. … Continue reading NEC4: 2020 amendments
BIM-used copyright: Dealing with emerging technologies in construction
We have explored various topics as part of our intellectual property in construction series. To continue our discussion, we delve into some further thoughts on other common queries that we receive. In this article we will look at: Should a copyright licence be subject to the payment of fees? What happens to a copyright licence … Continue reading BIM-used copyright: Dealing with emerging technologies in construction
Payment down the chain
Cash-flow management remains one of the main problem areas in construction and engineering projects. Issues in getting paid, serious enough on their own, are often an early warning sign for a project heading into wider difficulties. There can of course be a number of culprits for cash-flow difficulties. A few weeks’ ago, my colleague, Yousef … Continue reading Payment down the chain
Novation, step-in and a potential problem with CIGA 2020
Where the contractor has become insolvent, what obligations can an employer enforce when stepping-in to a previously novated professional consultant’s appointment in a design and build scenario? A question that routinely arises in practice, this scenario is perhaps more relevant now than ever, not only because of COVID-19 but also because of the Corporate Insolvency … Continue reading Novation, step-in and a potential problem with CIGA 2020
Assignment of sub-contracts – benefit and burden, risk and reward in the TCC
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
Retentions under scrutiny and the transferred loss principle
In this challenging economic climate, contractors are striving to keep their businesses afloat. Healthy cash flow is key and a major barrier to achieving this can be the slow release of (or indeed the failure to release) retention. The idea of a retention in theory is simple: a way of incentivising the contractor to return … Continue reading Retentions under scrutiny and the transferred loss principle
Global Water Associates: applying Hadley v Baxendale
From time to time, those seminal cases we all studied during the early parts of our career pop up in practice. We’re all familiar with them: the snail in the bottle in Donoghue v Stevenson; the spurious sounding flu remedy in Carlill v Carbolic Smoke Ball Co — the list goes on. Of these key … Continue reading Global Water Associates: applying Hadley v Baxendale
Moral rights: why should developers care?
Question: What do the Oslo Picasso murals “The Seagull” and the “The Fishermen” and the Dutch De View Jaargetijden have in common? Answer: They both have been subject to recent high cost, high profile litigation that dragged on for years and which concerned moral rights. Yes “moral rights” caused all the trouble for these projects … Continue reading Moral rights: why should developers care?
A tough (PI insurance) market: why it matters, and what parties can do about it
In the UK, the professional indemnity insurance (PII) market is hardening. It is becoming increasingly common to find that contractors and consultants do not hold (or are struggling to obtain) PII at the level and on the terms that were negotiated and agreed with their employers. At the same time: There has been a proliferation … Continue reading A tough (PI insurance) market: why it matters, and what parties can do about it
Supplier beware: the CIGA 2020
The Corporate Insolvency and Governance Act 2020 (CIGA 2020) came into force on 26 June 2020 after a fast-tracked consultation process. Intended to provide a lifeline to struggling businesses during the COVID-19 pandemic and beyond, it consists of temporary measures, meant to alleviate the short-term disruption caused by the pandemic and permanent measures, which are … Continue reading Supplier beware: the CIGA 2020
Wind of change – is NEC the future for wind projects in APeC?
COVID-19 is causing uncertainty for business and investment strategies worldwide, the energy sector included. Despite this, investors are increasingly looking to renewables as a way to meet growing energy demand while decarbonising energy supply. While countries across Asia-Pacific have shown strong appetite for wind power, the risk of natural disasters, inadequate government support and the … Continue reading Wind of change – is NEC the future for wind projects in APeC?
Not to be sniffed at… implied terms in the context of termination
Waste projects are sometimes perceived as the less glamorous side of our construction and infrastructure practice. That does them a disservice: they involve innovative technologies and the development of sustainable infrastructure solutions. The interface of those technologies with the allocation of risk for design and construction can present interesting and knotty contractual issues. For example, … Continue reading Not to be sniffed at… implied terms in the context of termination
Hands off! Ownership of goods and materials on construction projects
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 … Continue reading Hands off! Ownership of goods and materials on construction projects
URDG 758: finally tested and it does what it says on the tin
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 … Continue reading URDG 758: finally tested and it does what it says on the tin
Copyright in construction: some common queries
Questions about intellectual property rights routinely arise during construction contract negotiations and serve as a refreshing reminder that COVID-19 issues are not the sole focus of negotiations at the moment. Copyright is one type of intellectual property right and is the area where we tend to encounter the most queries. This blog, the first in … Continue reading Copyright in construction: some common queries
“Smash and grab” update: can an employer start a “true value” adjudication without first paying the notified sum?
Insofar as “smash and grab” disputes go, Broseley London Ltd v Prime Asset Management Ltd is simple and straightforward. However, the judgment touches upon an issue which is anything but straightforward: can an employer start a “true value” adjudication without first paying the notified sum? For those who are new to “smash and grab” practice, … Continue reading “Smash and grab” update: can an employer start a “true value” adjudication without first paying the notified sum?
Build UK guidance on implementing its recommendation on contract terms: one step forward, two steps back
Last year Build UK (BUK) published its non-binding recommendations on the contract terms its members should (as a minimum) refrain from using. The recommendation had the commendable aim of forming “a new common ground between clients and the supply chain on contractual practice in the construction sector” with the key objectives being “to promote collaboration, … Continue reading Build UK guidance on implementing its recommendation on contract terms: one step forward, two steps back
Electronic execution: another “new normal”?
Electronic signatures and virtual signings (using the Law Society guidance following the “Mercury” Tax case) have been gaining popularity for some time with electronic execution given an added boost in Autumn 2019 when the Law Commission published its report on e-signatures. The report’s key findings were that: Deeds and documents can be signed electronically so … Continue reading Electronic execution: another “new normal”?
Construction Act consultation – summary of responses
It may understandably not be at the forefront of people’s minds as the industry responds and reacts to the COVID-19 pandemic, but in February 2020 the government finally published a summary of responses to its Construction Act 1996 consultation. Matt Molloy has previously blogged on the responses from an adjudication-perspective so I thought it would … Continue reading Construction Act consultation – summary of responses
Document production on construction projects: A reality called proof
“Documents create a paper reality we call proof.” (Mason Cooley, American writer, 1925 – 2002) Construction and engineering projects, and the disputes that sometimes arise from them, throw up a great deal of paperwork and data. While that is probably true of the majority of joint enterprises that continue over a substantial period, it is … Continue reading Document production on construction projects: A reality called proof
I tort I was covered? Management companies procuring maintenance works – a common pitfall
Tenants and building owners frequently devolve management of their repair and maintenance responsibilities to management companies, who often enter into agreements with contractors for the repair and maintenance of the buildings they manage. This can be an attractive prospect from an administrative point of view, keeping such contractual arrangements at arm’s length from an occupier … Continue reading I tort I was covered? Management companies procuring maintenance works – a common pitfall
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 … Continue reading Crumbling edifices (again) – defective new homes and the “insurance” problem
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. … Continue reading FIDIC 2017: two years on
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 … Continue reading Witness evidence in the TCC: reform is on the way
The Construction Act and modular construction projects
Since my colleague Eveline Strecker last blogged about modular construction, it has continued to develop in popularity. The more we see of modular, the more it becomes clear that it is a very different beast to “traditional” construction projects, demanding an evolution in procurement routes and contract content. The problems with shoehorning a modular project … Continue reading The Construction Act and modular construction projects
The Ontario Construction Act: building on the UK prompt payment and adjudication regime
This summer I had the pleasure of traveling to Toronto and meeting Canadian construction lawyers to discuss the introduction of a prompt payment and adjudication regime in Ontario on 1 October 2019. As Matt Malloy outlined in his blog from 2017, the provisions of the Ontario Construction Act take inspiration from the UK. However, while … Continue reading The Ontario Construction Act: building on the UK prompt payment and adjudication regime
New Balance fails to equalise in sponsorship dispute
In a step change from the days of Mid Essex Hospital Services NHS Trust v Compass Group UK and Ireland Ltd (trading as Medirest) in which the Court of Appeal rejected the notion of a general doctrine of good faith, many construction contracts now include an express requirement to act in “good faith”. This trend … Continue reading New Balance fails to equalise in sponsorship dispute
Judicial treatment of delay analysis: raw data preferred
Have you read the SCL’s delay and disruption protocol? I am sure you have, as the SCL website notes that it has been downloaded 38,500 times. But if not, I would recommend it to you, in particular its helpful glossary of terms, its reminder of the various formulae for calculating lost overheads and profit, and … Continue reading Judicial treatment of delay analysis: raw data preferred
Flexidig v Coupland – claims in economic torts
The recent TCC decision in Flexidig Ltd v A Coupland (Surfacing) Ltd piqued my interest. My first thought was why did Flexidig commence proceedings against Coupland, and why did it bring the claim that it did? It provides a rare example of the tort of procuring a breach of contract arising in the construction context … Continue reading Flexidig v Coupland – claims in economic torts
British Overseas Bank v Stewart Milne – spotlight on collateral warranties
For contracts that typically amount to a few pages, collateral warranties undoubtedly generate more than their fair share of case law. Normally, those cases are run of the mill but every now and then one comes along that gives pause for thought. Such was the case for me with the judgment of the Outer House … Continue reading British Overseas Bank v Stewart Milne – spotlight on collateral warranties
Assignment and performance bonds: Sumitomo Mitsui v Euler Hermes
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
VAT reverse charge
What is the reverse charge? Coming into effect on 1 October 2019, the reverse charge in relation to building and construction services is set to bring about a major change in how VAT is handled in the construction sector. All those involved – including developers – need to be aware of when it will apply … Continue reading VAT reverse charge
Biting off more than you can chew: no oral modification and entire agreement clauses
The Court of Appeal recently considered the application of, and relationship between, no oral modification (NOM) and entire agreement clauses. While this was not a construction case (the appeal in question concerned a contract for the provision of dental services), both types of clause are commonly included in construction contracts. The judgment also restates a … Continue reading Biting off more than you can chew: no oral modification and entire agreement clauses
Quantum meruit – how much is too much?
A developer client recently called me for advice on a new residential development project. My client was in the process of negotiating building contract terms, including the contract sum, with its preferred contractor. In the meantime, both parties were keen for the contractor to start the works in order to keep to the project programme. … Continue reading Quantum meruit – how much is too much?
Build UK recently published a set of minimum standards to be applied when using retentions, as well as their roadmap to zero retentions by 2023. This follows on from Build UK’s non-binding recommendations on contract terms, about which my colleague, Adriano Amorese, recently blogged. For those of us involved in drafting and negotiating construction contracts, … Continue reading Retention release?
Willow v MTD: a successful Part 8 challenge after Hutton v Wilson
I read Matt Molloy’s blog, What happens when adjudicators make a mistake? with interest, as he mentioned the case of Willow Corp Sarl v MTD Contractors Ltd. Bryan Cave Leighton Paisner acts for Willow in a dispute with MTD in relation to its role as main contractor in the design and construction of the Nobu … Continue reading Willow v MTD: a successful Part 8 challenge after Hutton v Wilson
Sitol v Finegold: NEC3 adjudication time bar applied
The idiom “all duck or no dinner“, if you’re not familiar with it, means “all or nothing“. I once worked for a partner that was quite fond of using it, particularly in the context of limitation periods and time bars: if you’re in time, your clients will usually have a smorgasbord of dispute resolution options … Continue reading Sitol v Finegold: NEC3 adjudication time bar applied
A missed opportunity – Haberdashers and subrogation
Earlier this year I found myself waiting for the Court of Appeal to bring the next instalment in a series of interesting decisions regarding subrogation claims in insurance disputes (not a contradiction in terms, I promise!), which I and my colleague John have been taking it in turns to blog about (see Joint insurance and … Continue reading A missed opportunity – Haberdashers and subrogation
Beware the short-cut – are preliminary issue hearings a bad idea?
Anyone who has used a GPS knows that sometimes the shortest route can take a mighty long time. On a trip to Pebbly Beach in New South Wales it took me down a little dirt road with so many potholes it resembled swiss cheese. If that wasn’t bad enough, the road led to a dead … Continue reading Beware the short-cut – are preliminary issue hearings a bad idea?
Build UK’s recommendation on contract terms: a step in the right direction
Build UK, a leading representative organisation for the construction industry, has published a non-binding recommendation on which contract terms its members should (as a minimum) refrain from using. The recommendation “seeks to form a new common ground between clients and the supply chain on contractual practice in the construction sector” with the key objectives being … Continue reading Build UK’s recommendation on contract terms: a step in the right direction
Re-baselining construction projects: drawing a line in the sand
As construction disputes lawyers, we see our fair share of settlement agreements. And not just the traditional full and final settlements, but also one page final account settlements, and “line in the sand” agreements in which the parties seek to renegotiate elements of the contract while it is in progress. These “line in the sand” … Continue reading Re-baselining construction projects: drawing a line in the sand
Injunction not granted in ongoing adjudication: Billingford v SMC Building
Imagine the scene: you are the responding party to an adjudication and right at the outset you spot that the adjudicator has been incorrectly appointed and does not have jurisdiction. You try to call a halt to the proceedings. The claimant refuses. Surely you can get an injunction? Why go to all the trouble, expense … Continue reading Injunction not granted in ongoing adjudication: Billingford v SMC Building
Employer’s Agents and agreements for lease: the loyalty only goes so far…
A tenant client was recently surprised by a clause in its agreement for lease (AFL). The clause allowed the landlord to defer the target access date and long stop date commensurate with any extension of time granted by the Employer’s Agent (EA) under a JCT Design and Build contract for the landlord’s works. It was … Continue reading Employer’s Agents and agreements for lease: the loyalty only goes so far…
Can liquidated damages be claimed after termination? Wrong question!
Imagine this: a contractor undertakes to perform certain works by a specified date, and agrees to pay liquidated damages (LDs) if it does not complete by that date (subject to any entitlement to an extension of time). The contractor, through its own fault, is late and does not complete by the specified date. In fact, … Continue reading Can liquidated damages be claimed after termination? Wrong question!
Combustible cladding: early judicial guidance from the TCC
I read with interest Paul Bury’s blog, which touched on the case of Zagora Management Ltd v Zurich Insurance plc as it relates to claims against approved inspectors. I’m interested in the case for a different reason: it’s one of the first superior court decisions, post-Grenfell, that deals with the liability consequences of high-rise properties … Continue reading Combustible cladding: early judicial guidance from the TCC
Time bars under FIDIC 2017 – are more notices the answer?
Construction and engineering contracts often contain provisions specifying that, within a particular time, one party (traditionally the contractor) must notify the other (the employer and/or the contract administrator) of a claim or the likelihood that it might advance a claim. Sometimes these “time-bar” notice provisions are elevated beyond being merely an obligation, to the status … Continue reading Time bars under FIDIC 2017 – are more notices the answer?
Adjudication and insolvency – guidance from the Court of Appeal
Summer 2018 will be remembered as a special time by many readers of this blog: whether it was the spectacular weather, the giddy heights hit by the England football team, or Fraser J’s decision in Michael J Lonsdale (Electrical) Ltd v Bresco Electrical Services Ltd (In Liquidation), it was a summer to remember. To recap … Continue reading Adjudication and insolvency – guidance from the Court of Appeal
Practically complete or completely impractical? Navigating the pitfalls of what constitutes practical completion
Many a construction dispute turns on defects. A significant subset of those turn on whether the existence of defects prevents practical completion from taking place. It’s not surprising that these situations are contentious: contractors are keen that practical completion is certified so as to avoid or limit their liability for liquidated damages, trigger the return … Continue reading Practically complete or completely impractical? Navigating the pitfalls of what constitutes practical completion
Do liquidated damages survive termination? (answer in no more than 1000 words)
Whether liquidated damages (LDs) can be claimed after termination is a question which comes up regularly. It is very relevant in the current climate where contracts are often terminated following contractor insolvency. If I were devising a construction law exam paper, this classic question would undoubtedly appear. An unlucky student sitting my imaginary exam paper … Continue reading Do liquidated damages survive termination? (answer in no more than 1000 words)
With friends like these…Burgess v Lejonvarn: Christmas cheer for construction professionals
As we all get into the festive spirit you may well find yourself chatting to family or friends about their latest project. Some may ask for your opinion or advice. But don’t get carried away; remember the cautionary tale of Burgess v Lejonvarn before offering any free advice.
Nottingham Forest 1 – 0 Entire Agreement
A recent decision from the Chancery court offers some helpful guidance on the interaction between entire agreement clauses and claims for misrepresentation. Many practitioners may be under the impression that an entire agreement clause has the effect of defeating a claim in misrepresentation. However, this case shows that is not necessarily the case. If parties … Continue reading Nottingham Forest 1 – 0 Entire Agreement
Is it time for Brexit, or just costs?
With the much-anticipated draft withdrawal agreement being revealed last week, I thought it was an opportune time to reflect on the impact of Brexit on the construction industry, and in particular, what effect it is having on parties entering into construction contracts in the current market.
North Midland Building v Cyden: apportioning risk for concurrent delay in the UAE
In North Midland Building Ltd v Cyden Homes, the Court of Appeal held that parties to a construction contract are free to apportion risk in the event of concurrent delay. For more detail on that case, see my colleague, Alexandra Clough’s blog post, Concurrent affairs: North Midland Building Ltd v Cyden Homes. Cyden (as employer) … Continue reading North Midland Building v Cyden: apportioning risk for concurrent delay in the UAE
Practical Law Construction: 10 years a blogging
In the beginning… Happy birthday, Practical Law Construction! A lot has changed in the ten years since the “blog page” came into being. In October 2008 we were living in St Albans, our son was still at school and Labour were in power. Lehman Brothers had recently collapsed and the global financial crisis was in … Continue reading Practical Law Construction: 10 years a blogging
Saved by silence: Letters of intent and Arcadis v Amec
Employers under construction contracts often find themselves under time pressure to get started with construction of their projects prior to concluding negotiations with their preferred contractor and before the building contract is entered into. In such a scenario, employers commonly choose to rely on a letter of intent. This should give the contractor comfort to … Continue reading Saved by silence: Letters of intent and Arcadis v Amec
When design competitions go bad
Some of the world’s most iconic buildings were conceived as a result of architectural competitions. You may be surprised how often such competitions result in controversy. Jorn Utzon submitted his winning concept for the new opera house in Sydney in the mid-1950s. He walked away from the project 11 years later (7 years before its … Continue reading When design competitions go bad
Apocalypse Now? Contractor insolvency: an employer’s survival guide
Last year, a developer client raised concerns about the solvency of its main contractor, Carillion. With over 50% of the works still to be completed, the client wanted some advice as to how it could manage the risks (legally and practically) if the contractor did go “pop”. In January this year, the concerns became a reality. … Continue reading Apocalypse Now? Contractor insolvency: an employer’s survival guide
Risky business: Offshore drilling and using force majeure as an exit route
A contract can be a long term commitment. Over the course of a contract, things happen. Circumstances change. Force majeure clauses generally allow parties to allocate contractual risk, by limiting liability, excusing performance or providing for termination, if unusual or unfortunate circumstances arise. However, the recent case of Seadrill v Tullow reminds us that it is … Continue reading Risky business: Offshore drilling and using force majeure as an exit route
Beware – wildlife on site!
A client recently called me in a panic. Their contractor had discovered a protected species of bird had set up home in the exact spot where they needed to carry out the next phase of works at one of their sites. No one on site was entirely confident on what the appropriate next steps should … Continue reading Beware – wildlife on site!
Can a company in liquidation go to adjudication? Lonsdale v Bresco in the TCC
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.
Concurrent affairs: North Midland Building Ltd v Cyden Homes
Concurrent delay is something that the courts tell us is exceedingly rare. And yet, it is a subject which can occupy much time when parties are in dispute about entitlement to an extension of time. The Court of Appeal has now considered whether parties to a construction contract can decide how to apportion risk in … Continue reading Concurrent affairs: North Midland Building Ltd v Cyden Homes
What are you implying? The role of implied terms in contract interpretation
Recent cases, including the Court of Appeal’s judgment in Bou-Simon v BGC Brokers LP and the (as yet unreported) case of Harrow LBC v Engie Regeneration (Apollo) Ltd (2018) (TCC), provide a useful reminder of the strict constraints on implying terms into a commercial contract. Courts can imply terms into a contract in order to … Continue reading What are you implying? The role of implied terms in contract interpretation
Making collateral warranties interesting: the Office Depot case
The trouble with collateral warranties (CWs) is that they aren’t very interesting. Construction lawyers typically overdose on them as trainees and have had enough of them by the time they qualify. A brief foray into the world of third party rights and they are ready to move on to higher things, leaving the following cohort … Continue reading Making collateral warranties interesting: the Office Depot case
The reverse charge: shaking up VAT on construction services
1 October 2019 will see a significant shake-up of the VAT rules in the construction sector. New rules will come into force on that date which will, in many cases, require the recipient of the supply of construction services, rather than the supplier, to account for VAT on the supply. Large and small businesses making … Continue reading The reverse charge: shaking up VAT on construction services
The costly business of ignoring interim assessments and agreed valuations: ICI v Merit Merrell Technology
Valuing a contractor’s work on a complex project is rarely an easy task. During the works, parties to a construction contract commonly devote significant resources to ensuring that the work is properly valued. These valuations are often carried out by people with close knowledge of the project, and under the NEC form of contract certified … Continue reading The costly business of ignoring interim assessments and agreed valuations: ICI v Merit Merrell Technology
Payment, retention and risk: shuffling the deck
Increasingly, the construction industry model that we know so well – based on layers of contractors and sub-contractors – is being called into question. In the last six months various failures (including Grenfell, Scottish PFI-built schools and Carillion’s collapse) have prompted questions about construction industry outsourcing and transfer of risk. Queries have been raised about … Continue reading Payment, retention and risk: shuffling the deck
Prospective analysis of compensation events under NEC: shutting one’s eyes and groping in the dark?
The NEC contract is built on the spirit of mutual trust and co-operation. One area in which this plays out is in the context of applications for an extension of time or a change in the prices by a contractor. The project manager is required to assess these applications on a prospective or forecasted basis, … Continue reading Prospective analysis of compensation events under NEC: shutting one’s eyes and groping in the dark?
The avalanche effect: key issues in modular building
Increasingly, our clients are requesting that we incorporate provisions for modular building techniques into their construction contracts. There seems to be a real trend for including at least some aspects of “modular” into development and other projects. It is open to debate whether this is driven by improvements in design and adaptability of modular building … Continue reading The avalanche effect: key issues in modular building
The fine line between design and implementation: scope of NEC Option X15
Last year, I blogged on the first instance decision of the Scottish courts in SSE Generation Ltd v Hochtief Solutions AG and another. That decision has been overturned by the Inner House, Court of Session (the Scottish equivalent of the Court of Appeal) in an important judgment that sheds light on how the English courts might … Continue reading The fine line between design and implementation: scope of NEC Option X15
Co-insurance and subrogation rights revisited (again!)
My colleague, Natalie Wardle, commented on the Supreme Court’s decision in Gard Marine and Energy Ltd v China National Chartering Company Ltd in her May 2017 blog. As she noted, the judgments (and the 3:2 majority verdict) left a number of questions unanswered. Two of these were: What is the strength of the implied term that … Continue reading Co-insurance and subrogation rights revisited (again!)
An unplanned surprise: Implied planning obligations – Clin v Walter Lilly
Recently, in the course of reviewing a proposed building contract for an employer, I had cause to consider how responsibility for obtaining planning consents had been addressed. Or rather, whether it had been addressed at all. Jean-François Clin v Walter Lilly & Co Ltd is a forceful reminder to effectively deal with this issue. The Court … Continue reading An unplanned surprise: Implied planning obligations – Clin v Walter Lilly
The uncharted Grove: smash and grab practice following Grove v S&T
Coulson J’s decision in Grove Developments Ltd v S&T (UK) Ltd has triggered a great deal of commentary, including Jonathan Cope’s post, which I read with great interest. It got me thinking about what strategies an employer or contractor might adopt to counter a smash and grab adjudication, either pre-emptively or after the referral has landed.