REUTERS | Ilya Naymushin

January 2013 digest: bonds, guarantees and privilege

Christina Rossetti, In the Bleak Midwinter:

“In the bleak midwinter, frosty wind made moan,
Earth stood hard as iron, water like a stone;
Snow had fallen, snow on snow, snow on snow,
In the bleak midwinter, long ago.”

Christina’s words seem apt for the weather the country has experienced this month. While our thoughts may turn towards spring and warmer weather, we have had plenty to ponder during January.

The Supreme Court handed down its long-awaited judgment in Prudential, refusing to extend legal advice privilege to legal advice given by accountants (or any other profession). Colin Passmore, who was instructed by the Institute of Chartered Accountants of England and Wales, shared his views and Jonathan Cope commented from a surveyor’s perspective.


  • The Court of Appeal upheld Edwards-Stuart J’s first instance decision that a claimant had discharged its burden of proof even though the scenario it proposed was inherently unlikely.
  • The Court of Appeal allowed an appeal against the senior costs judge’s decision to limit a party’s recoverable costs to its costs budget.
  • The TCC awarded damages for fraudulent misrepresentation in a construction dispute.
  • The TCC considered the scope of documents disclosable under the terms of an audit clause in the parties’ contract.
  • The Court of Appeal held a side agreement did not discharge a guarantee. Michael Mendelblat discussed the implications.
  • The High Court considered variations to an agreement were amendments to the original obligation, so guarantors were not discharged from liability under their guarantee.
  • The High Court decided a penalty clause issue by reference to the “commercial justification” test.
  • The TCC decided issues relating to steel fabrication and erection on the Shard.
  • James Sharpe considered designers’ liability in tort and their duty to warn.

In adjudication:

  • The Court of Session considered Wednesbury unreasonableness in adjudication enforcement proceedings, which Matt Molloy commented on.
  • The TCC held the parties had varied the terms of their NEC3 Professional Services Contract, giving the adjudicator jurisdiction to rule on his own jurisdiction.
  • The TCC considered whether an adjudicator had breached the rules of natural justice by considering an earlier adjudicator’s decision.
  • Matt Molloy discussed the reasoning of judges and adjudicators, and the factors underpinning how they write judgments and decisions, and Jonathan Cope discussed confidentiality issues that may arise.

For practitioners awaiting full details of the Jackson reforms, it seems we will have to wait a little while longer (until mid-February), but details of the changes to Part 36damages-based agreements (DBAs) and conditional fee agreements (CFAs) have been published.

If contract drafting is more your cup-of-tea:

During January, we considered whether the CDM regulations apply to off-shore windfarms, an infrastructure procurement routemap was published, we saw guidance on the pre-application process for nationally significant infrastructure projects (NSIPs), concern over the National Infrastructure Plan, the DCLG publish new Approved Documents and amendments to the Building Regulations 2010, changes to the energy performance certificate (EPC) regulations, details of the industrial strategy for construction and a consultation on amendments to the definitions of nationally significant highways and rail schemes in the Planning Act 2008 (PA 2008).

Finally, we told you about things to look out for over the next 12 months in the fields of construction, dispute resolution, environment and property.

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