Construction Law: June 2021

Editor’s comment
Toxic and dysfunctional industry awaits its revolution
Editor Nick Barrett says tinkering with payment practices won’t be enough of a solution to the industry’s problems when even the Times in a three day series of articles suggests that the industry is ripe for revolution. It’s long overdue, he says.

News
This month’s news roundup features a warning that expected price inflation in construction could lead to harder fought claims, details of proposed new powers for the Insolvency Service to help tackle ‘phoenixing’, and the results of a major survey on international arbitration.

Legal terms explained
Michael Sharp and Noe Minamikata of Herbert Smith Freehills LLP explain the Construction Act.

Guest editor
A Smart Risk Register – a tool for non-adversarial behaviour
Guest Editor’s project team consultant Kelachi Amadi-Echendu and barrister Professor Rudi Klein consider how, through creating transparency and behaviour focused on aligned project outcomes, a Smart Risk Register supports the government’s Build Back Better plan.

Legislation state of play table
Dentons UK and Middle East provide our regular update on developments in regulations and legislation as they affect construction. Tracey Summerell comments on mounting pressures on the industry to reduce emissions.

Reports from the courts
Our regular round up of court cases of most interest to construction from Andrew Croft and Ben Spannuth of Beale & Company Solicitors LLP features one that highlights the need to ensure a project’s supply chain has appropriate insurance; and a judgment that provides comfort to those relying on limits of liability and exclusion clauses that the courts will take a common-sense approach.

Analysis
Unexploded bombs – who pays?
Jane Hughes and Robert Scudamore of Stevens & Bolton LLP try to fill an information gap on who should be liable for damage caused by unexploded Second World War bombs? Those still buried in the ground are deteriorating all the time.

CL guides
Letters of intent
The latest in our construction guides series from DLA Piper by Jennifer Price-Thomas looks at Letters of Intent, which she warns can carry pitfalls for the unwary.

Design obligations
Warranted trends in design standards
Harith Canna of Herbert Smith Freehills considers significant recent developments concerning design-related obligations, which lie at the core of any construction contract, and their impact on the procurement of construction projects.

Duty of care
Developments in the law of negligence and third-party liability
Claims involving duty of care when damage is caused by a third party are at the fore of developments in the law of negligence, as Barry Hembling of Watson, Farley & Williams LLP reports in this analysis of recent court cases.

Sustainability
Green dispute resolution procedures – what they are and how to use them
In a previous article (Construction Law Vol 32 No 2) Jane Hughes of Stevens & Bolton LLP looked at incorporating green drafting into construction contracts. In this follow up she considers how disputes can be dealt with in a greener, more sustainable way.

Tort of nuisance
The Tort of Nuisance – Overlook It At Your Peril
Chris Bryden and Georgia Whiting of 4 King’s Bench Walk examine the tort of private nuisance, a complex area which they warn has the potential to affect construction professionals in far-reaching (and evolving) ways.

Insurance
Hard times for professional indemnity
Insurance expert John D Wright of JD Risk Associates examines the current crisis in the professional indemnity market, which he predicted some two years ago. Policyholders can however take steps to help secure cover at an affordable cost.

Alternative dispute resolution
Arbitration exhibiting ‘due process paranoia’
Our regular Alternative Dispute Resolution article comes from Tracey Summerell of Dentons UK and Middle East who asks whether it is time for arbitration to lighten up.

Procurement plan signals move away from lowest price

Public authorities have been told to stop simply awarding contracts to the lowest bidder in the government’s new National Procurement Policy Statement, which directs them to take a broad view of value for money that includes social value outcomes.

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Contractor fined £700,000 after dumper truck death

BAM Nuttall has been fined £700,000 after an employee was run over by a dumper truck during construction of an electrical sub-station at Keith in north east Scotland. He died shortly after the incident.

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Modern Slavery to be attacked by new enforcement authority

A new watchdog agency which will take over responsibility for tackling modern slavery and enforce a requirement for large firms and public bodies to publish modern slavery statements has been announced by the government.

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Developer gets 14 year ban for abusing investments

A developer who operated a ‘ponzi’ scheme defrauding investors who were expecting their funds to go into the purchase, renovation and sale of properties has been banned from acting as a director of any company for 14 years.

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Reconsider planning reforms, government told

Proposed reforms to the planning system which aim to speed up the process of getting new homes built in pre-designated areas should be reconsidered before Government introduces its upcoming Planning Bill, a committee of MPs reports this week.

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Carbon plans demanded to bid for public contracts

Firms hoping to win major government contracts must detail their commitment to reaching net zero carbon emissions by 2050 before bidding, under new procurement requirements set out by the Cabinet Office. The move has the potential to be a “real game changer”, according to one lawyer, but could catch out smaller firms.

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Losing bidder settles for £10m in tunnel procurement dispute

Transport for London has reportedly agreed to pay the losing bidder for its Silvertown Tunnel contract over £10m after reaching an out of court settlement following a challenge to the procurement process.

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Smart contracts promise reduced weather delay risk

Construction firms are testing what is claimed to be a first of its kind ‘smart contract' solution designed to help improve weather related risk management and compensation handling on projects.

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Project Speed needs faster planning

Government must reduce the bureaucracy involved in project approval and development processes and expand the scope of the Development Consent Order system to cover more schemes in order to achieve its ‘Project Speed’ ambitions, a new report says.

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Collaboration hindered by traditional procurement

Construction clients need to engage with suppliers earlier, increase collaboration during the pre-construction stage and focus on quality over price in tender award criteria to improve project outcomes, it has been concluded following a survey of NEC contract users.

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