Construction Law: May 2020

Editor’s comment
The paper trail to survival
Amid conflicting advice on whether to open sites, construction companies are advised to maintain their own records to be able to prove what guidance they received about safe working during the pandemic and that they have acted properly, in the event of health and safety prosecutions or claims from workers or their families.

News
This month’s news roundup includes concern that construction firms have seen pandemic cover removed from their policies, details of a landmark case which saw the TCC reject a contractor’s attempt to halt an adjudication due to the pandemic, and market analysis stating that recently awarded contracts have been put on hold.

Legal terms explained
Karan Talwar of Herbert Smith Freehills LLP explains the principle of set-off.

Guest editor
Taxing times for construction
New tax rules for self employed contractors that place new burdens on end-users of their services have been put off until 2021, but construction faces major changes in its ability to source skills only as and when needed. Guest Editors Vijay Bange and Nic Hart of Duane Morris say a culling process may already be underway.

Reports from the courts
Our regular round up of the court decisions of most interest to construction from Andrew Croft and Ben Spannuth of Beale & Company Solicitors LLP looks at a dispute underlining that express dispute resolution clauses should be included in all contracts; and another that highlights the difference between a negligent act and a negligent failure to act.

Legislation state of play table
This table, prepared by Dentons UK and Middle East LLP, provides a regularly amended guide to new and proposed legislation that will affect the construction industry. Tracey Summerell and Esther McDermott comment on government response to the Construction Act consultation.

Alternative dispute resolution
Engage in settlement talks or pay the price
In our latest Alternative Dispute Resolution series article Tracey Summerell and Sonia Vilar of Dentons UK and Middle East LLP consider a case stressing that even parties with a strong belief in their case must engage in settlement discussions, including ADR, or risks costs sanctions.

CL guides
Force majeure, frustration and construction contracts
Ross Galbraith of DLA Piper provides the latest in our CL Guides series, with a topical look at how force majeure and frustration can impact on construction contracts.

Industry reform
Why are there so many insolvencies in construction?
Charles O’Neill of Contract Dynamics Consulting and highly experienced delivery leader Ian Williams examine steps that clients and contractors can take in the early stages of projects to influence success, reviewing current bidding and contracting processes, and making recommendations for change.

COVID-19
Life after lockdown
David Cordery of Trowers & Hamlins LLP looks ahead to what the post lockdown construction world might look like. The long term impact of Covid-19 could be to hasten adoption of new technologies and ways of working, he suggests.

Litigation
Henderson principle revisited
Vijay Bange and Tanya Chadha of Duane Morris examine a recent court decision shedding light on whether parties have to bring all of their claims, or defences, at once. The case provides a test of the long established Henderson principle.

Contracts
Standard Forms of Contract: FIDIC vs NEC
Rebecca Shorter of White & Case LLP examines the approaches taken to contract management by the FIDIC and NEC contract suites. Recent editions show more sophisticated management of construction and engineering projects, and adoption of measures to increase their appeal as standard forms.

Insurance
The intention of the parties must prevail
Insurance expert John D Wright of JD Risk Associates explains that the courts will make decisions based on what parties in disputes over insurance policy interpretation intended, so obvious errors in drafting can be rectified.

New Homes Ombudsman moves forwards

Progress is being made towards the creation of an ombudsman giving home buyers access to swift redress where they find problems with the quality of new homes, after an interim chair was appointed to a new body responsible for setting up the scheme.

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Fall from height results in large fine for firm

A refurbishment company has received a fine of £1.1m after an engineer – who was testing a sprinkler system for leaks at a site in Hemel Hempstead – fell from a ladder and suffered serious injuries.

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Development consent quashed after government bias accusations

Planning permission for the proposed Westferry Printworks development on London’s Isle of Dogs has been quashed following accusations that Housing Secretary Robert Jenrick was biased in his decision to approve the scheme.

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Move to prohibit termination of supply to firms in insolvency

Suppliers will no longer be able to cease their supply to companies that have entered insolvency or ask for additional payments under a new Bill introduced to Parliament. The move could have a negative impact on cash flow in the construction sector, one lawyer warns.

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Scottish sector prepares for return to sites

Easing of lockdown restrictions in Scotland from this week is being welcomed by the construction sector, but care must be taken to ensure the health and wellbeing of those working on sites is the overriding consideration, according to lawyers.

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News in Brief: 22 May 2020

The Construction Leadership Council has published the fourth version of its Site Operating Procedures, which removes the previous requirement for face to face contact to be kept to 15 minutes or less on sites.

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Lawsuit on the cards over Carillion audits

Auditing giant KPMG may face a £250M lawsuit over alleged negligence in its audits of Carillion ahead of the construction firm’s collapse in 2018. This could mark the first time that Government liquidators have attempted to sue a large auditor to recoup losses from a major insolvency.

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Inspections to recommence on construction sites

Proactive inspections of construction sites are set to be resumed by the Health & Safety Executive to help ensure building is carried out safely and in line with public health guidance on coronavirus.

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Scotland unveils phased approach to reopening sites

Scottish construction sites designated as ‘non essential’ may be able to make initial steps towards returning to work from next week under plans revealed by the Scottish Government for a phased approach to easing the current Covid-19 lockdown. The announcement does not signal any immediate changes, one lawyer emphasises.

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Call to reconsider contracts amid Covid-19

Reconsidering the way contracts are drafted throughout the construction supply chain will be necessary to enable projects – which are facing delays and productivity challenges – to proceed in light of the Covid-19 crisis, a new Arcadis report recommends.

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