Construction Law: August/September 2021

Editor’s comment
Report highlights need for procurement overview
Editor Nick Barrett says the Latest National Audit Office report highlights yet again the need for procurement reform. Lessons may have been learned from the Carillion collapse.

News
This month’s news roundup features a warning that material shortages and cost pressures are set to result in a rise in construction disputes. In addition, lawyers respond to the new Building Safety Bill and the Civil Justice Council has declared that compulsory alternative dispute resolution is lawful.

Legal terms explained
Noe Minamikata and Michael Sharp of Herbert Smith Freehills LLP explain what is meant by novation.

Guest editor
The role of export credit agency financing
Guest editors Lauren Davies, Counsel, and Vanessa McLellan of Vinson & Elkins RLLP argue that export credit should not be overlooked as a source of funding or support for large projects.

Legislation state of play table
The latest in our regular update on the progress of legislation and regulations affecting construction comes from Dentons UK & Middle East LLP. Tracey Summerell and Akin Akinbode provide a commentary on the Building Safety Bill.

Reports from the courts
Our regular round up of the court cases of most interest to construction comes from Andrew Croft and Ben Spannuth of Beale & Company Solicitors LLP who examine a decision where the judge criticised claimants for not using adjudication; and another that highlights the dangers of oral contracts.

Analysis
In-person and virtual evidentiary hearings: are hybrid hearings the way forward?
Virtual hearings have proven that they can work during a pandemic but are they here to stay? Scott Stiegler and Ben Grunberger-Kirsh of Vinson & Elkins argue that hybrid models combining in-person and virtual evidence might become the norm.

CL guides
Price and payment
The latest in our Guides to Construction Law from DLA Piper whose Clare Rushton explains the often thorny issues of price and payment in contracts.

Legislation
Retrospective liability claims: what you need to know and where to start
Barry Hembling and Hazel Boland-Shanahan of Watson, Farley & Williams LLP analyse proposed changes to building safety legislation ushered in by the Grenfell tragedy which will apply retrospectively, and could allow claims on disputes where the limitation period had expired.

Procurement
Promoting ethical purchasing decisions
Construction is at the forefront of a procurement revolution that will enforce proper attention being given to the ethical sourcing of materials and services. Mark Fletcher of Russell-Cooke LLP warns that the ability of employers to enforce their values is still constrained by legal and commercial considerations.

Disputes
The root cause of evil
Vijay K. Bange and Tanya Chadha of Duane Morris explore trends in disputes emerging in the energy sector across four jurisdictions – the United Kingdom, Middle East, United States and Caribbean and Latin America.

Economic loss
Why economic loss is an issue in claims
Jane Hughes of Trowers & Hamlin LLP examines the often difficult to explain issues surrounding the concept of economic loss. Sustained pressure on the legal principles behind it is expected, she warns.

Insurance
Disclosure, waiver and the Insurance Act 2015
Insurance expert John D Wright of JD Risk Associates asks what difference has been made by changes in the Insurance Act 2015 to the principle of ‘good faith’ as it applies to policies. Bias towards insurers might have been removed but legal disputes still arise, he cautions.

Alternative dispute resolution
New Digital Dispute Resolution Rules
In our latest Alternative Dispute Resolution series article Tracey Summerell of Dentons UK and Middle East LLP says ‘new tech’ like smart contracting is developing rapidly and is set to disrupt the industry’s approach to both contracting and dispute resolution.

Construction product verification scheme launched

A new Code for Construction Product Information and associated guidance have been published to help tackle “disingenuous” marketing practices and the provision of “misleading” information by manufacturers, which have come to light in the aftermath of the Grenfell Tower fire. One lawyer welcomed the code, but raised questions over its enforceability and emphasised a need for contractors to remain vigilant.

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Scottish hospitals inquiry gets underway

A public inquiry into the construction of major hospitals in Glasgow and Edinburgh where issues with ventilation and other key building systems have triggered patient health and wellbeing concerns began taking oral evidence this week.

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Delayed Euston decision puts HS2 programme at risk

Risk of further delays and cost escalation on High Speed 2 has been identified by the Public Accounts Committee which reported this week that it was “increasingly alarmed” about key elements of the programme. Particular concern is raised about delays to key decisions on plans for Euston station.

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First contractor sentenced under Covid spot check scheme

A construction contractor has become the first firm to be sentenced under the Health & Safety Executive's Covid safety spot check programme after multiple health and safety issues were discovered at a site in Manchester last summer.

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House builder fined after three fall from height

Major house builder St Modwen has been fined £200,000 following an incident where three contractors fell from height after a temporary stairwell cover that had been installed incorrectly for use as a working platform failed.

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Government support demanded over materials crisis

A fresh warning over the construction sector's materials crisis has been issued by the National Federation of Builders and the House Building Association, which are calling on the government to step in and tell local authorities to show greater flexibility to the industry on housing projects.

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Grenfell shows up non-compliance culture, Inquiry hears

A “culture of non-compliance” within certain elements of the construction sector has been brought to light in the aftermath of the Grenfell Tower fire alongside a lack of competence which characterised the project to refurbish the residential block, the Inquiry into the incident has heard.

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Construction pipeline hailed by lawyers

Plans to invest £650 billion on new infrastructure over the next decade have been welcomed by construction lawyers and the industry. Supply chain collaboration, fair allocation of risk and an end to ‘boom and bust’ investment cycles will be crucial to support sector recovery, lawyers emphasise.

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Contractual pressures limit Covid safe collaboration

Modified working practices and Covid control measures introduced to construction sites have been largely successful in limiting transmission of the virus, new research has claimed. However, the sector’s focus on workforce health and safety has sometimes conflicted with contractual and productivity pressures, with a mixed response from clients to the pandemic.

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Principles set out for building safety cases

Building owners and other parties responsible for high rise residential blocks are being urged to start preparing for the introduction of new ‘safety case’ reporting requirements that are set to come into force under the Building Safety Bill.

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