Contents

Editor’s comment
No sign of infrastructure gear change
Editor Nick Barrett laments the lack of urgency in infrastructure investment shown by government, as highlighted by a National Infrastructure Commission report. Threats to delay HS2 are another example of this snail’s pace.

News
Our news round up reports on one of the biggest fines ever for health and safety breaches; a warning from government’s spending watchdog the National Audit Office that HS2 delays will add to costs; and fines of some £60 million for bid rigging among demolition contractors.

Legal terms explained
David Nitek and Noe Minamikata of Herbert Smith Freehills LLP explain what relational contracts are.

Guest editor
Paying for past mistakes: the developer remediation contract
Guest Editor Rachel Chaplin welcomes the positive steps being taken in the wake of the Grenfell Tower tragedy to improve fire protection and safety of buildings. But shouldn’t government be shouldering some of the blame and cost because of its own regulatory failures, she asks?

Legislation state of play table
Our regular update of the progress of legislation and government procurement related developments compiled by Construction Law staff.

Reports from the courts
Our Regular round up of the court cases of most interest to construction from Andrew Croft and Ben Spannuth of Beale & Company Solicitors LLP who examine the decision in an appeal that emphasises the need for parties to either raise issues in respect of the validity of payment applications/payment notices or to reserve their positions without delay; and another that shows the current judicial uncertainty regarding the extended limitation periods under the Building Safety Act 2022.

Analysis
Developments expected during 2023
Alan Stone, Tom Green and Zack Gould Wilson examine some significant developments in the construction industry last year, and take a look ahead at some key developments expected in 2023.

CL guides
Insolvency
Rachel Chaplin and Cai Cherry of DLA Piper explain UK insolvency processes.

Limitation Periods
Defective Premises Act 1972: A new dawn for historic claims.
The Building Safety Act has extended limitation periods for claims under the Defective Premises Act. Stephanie Geesink and Dom Turner-Harriss of Watson Farley & Williams LLP examine the attitude of the courts to parties attempting to tack onto ongoing proceedings new claims that were previously time barred.

Tort of nuisance
The tort of nuisance – the categories are not closed
Chris Bryden of 4 King’s Bench Walk and Georgia Whiting, Legal Counsel at the Ardmore Group, consider a Supreme Court decision that provides a general restatement of the fundamental principles of the law of nuisance, in a follow up to their previous article on the Court of Appeal decision in the same case.

Contracts
Contract management – best practices to limit the risk of disputes
Guillaume A Hess of King & Spalding argues that best practice in contract management is essential for successful administration of projects, but also to minimise the risk of disputes arising. In the first of a two part series, he warns that there is no one size fits all approach.

Contracts
Contract terms criticised by tree felling inquiry
Amey found itself embroiled in a long running dispute over a tree felling programme that an inquiry says it partly caused through the terms of a contract that it signed. The experience suggests that risk management needs to consider the impact of works on local feelings.

CLC
The Construction Leadership Council: a busted flush or a potent force for change?
Set against its own targets the Construction Leadership Council’s performance has been inadequate and it fails to address the issue that fundamental and radical changes in construction procurement and payment are needed, argues Professor Rudi Klein of Klein Legal who suggests looking to Singapore for pointers to the way forward.

Insurance
Insuring the design risk – a minefield for all parties
Insurance expert John D Wright of JD Risk Associates examines how claims relating to design issues are resolved. Design risk is a minefield for all concerned, but particularly the insurers, he explains.

Alternative dispute resolution
“Merchants of peace” in our global supply chains
Our latest Alternative Dispute Resolution series article comes from Tracey Summerell of Dentons UK and Middle East who salutes the International Chamber of Commerce’s 100 year contribution to dispute prevention.

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Editor’s comment
Report reveals industry unprepared for growing pressures
Editor Nick Barrett finds little evidence in the RIBA Contracts and Law Report that the industry is ready to adopt more collaborative approaches.

News
Our latest news roundup highlights new evidence suggesting construction disputes are on the rise, a call to avoid a return to ‘race to the bottom’ conditions, and a significant injunction ruling to block HS2 protests.

Legal terms explained
Anant Rangan and Xavier Milne of Herbert Smith Freehills LLP explain how adjudication decisions can be enforced.

Guest editor
The green future of construction
Guest Editor Iain Wishart, a highly experienced Quantity Surveyor and Quantum Expert, argues that the growing focus on environmental issues means contract administration on all construction projects is going to become more difficult, time consuming, and expensive. Failure to manage the processes will result in delays and perhaps more disputes, he warns.

Legislation state of play table
Our regular update on the progress of legislation and other developments affecting construction is compiled by News Editor Steve Dale, who also provides a commentary on professional indemnity insurance challenges and a new model insurance clause designed to cover fire safety risk on projects.

Reports from the courts
Our regular round-up of the court decisions of most interest to construction comes from Andrew Croft and Ben Spannuth of Beale & Company Solicitors LLP who examine a case that demonstrates the courts’ reluctance to find that liquidated damages provisions are unenforceable for reasons of uncertainty where an alternative interpretation can be found; and a Court of Appeal ruling that provides clarification to beneficiaries of collateral warranties.

Analysis
Ireland’s Construction Contracts Act and its application to projects abroad
Roberta Downey and Ciaran Williams of Vinson & Elkins analyse the Irish Construction Contracts Act, which introduced statutory adjudication to the Republic in 2016. The Act does not expressly limit its application to projects that are executed in Ireland.

CL guides
Damages
In our latest Guides to construction law series Rachel Chaplin of DLA Piper explains the use of damages to compensate parties for breaches of contract or a tort.

ESG
Contracting for ESG
Construction has enthusiastically committed to the government’s net zero ambitions, and pledged to respond positively to other Environmental, Social and Governance demands. Shona Frame and Charlotte Eccles of CMS warn that traditional contractural risk allocation approaches might not be best suited to promoting success in these areas.

Contracts
Drafting for a greener future
Tim Kittow and Harry Coates of Beale & Company Solicitors LLP welcome the benefits that the increasing amount of ‘green drafting’ of construction contracts will deliver, but caution that there are potential risks associated that must be appreciated from the outset.

Adjudication
Meaning of a ‘contract’ defined for adjudication
Barry Hembling of Watson, Farley & Williams LLP reports on an important Court of Appeal decision issued in June 2022, which considered for the first time the statutory meaning of a “construction contract” for adjudication purposes.

Defects
Defects and the courts’ approach to ‘Waking Watch’ schemes
Laura Lintott, Of Counsel at Watson Farley & Williams LLP examines case law on the consequences of defects in projects. The cost of ‘waking watch’ schemes may not be covered under new home warranty insurance in future, she warns.

Insurance
Building defects insurance
Insurance expert John D Wright of JD Risk Associates examines building defects insurance which although not compulsory in the UK, offers peace of mind to policyholders. Recent case law confirms that the courts will take a firm line where defendants seek to avoid liability under guarantee policies intended to provide peace of mind to policyholders.

Alternative dispute resolution
Refusing to mediate – implications for costs in court actions
Sarah Alexander, Counsel at Dentons Middle East and Europe LLP, looks at recent cases shedding light on factors the courts might consider when determining costs where mediation was not attempted.

Editor’s comment
Bid rigging a thing of the past?
Editor Nick Barrett detects signs that some anti competitive behaviour in construction could be viewed as a thing of the past by competition regulators; but never underestimate criminal stupidity he warns.

News
This month’s news roundup features a warning that poor information management is affecting construction firms’ ability to defend themselves against claims, as well as a cladding dispute involving Balfour Beatty and a report which suggests funders are likely to steer clear of high polluting schemes.

Legal terms explained
Sebastian Morton, Elissa Patel and Mathew Shelley of Herbert Smith Freehills LLP explain how subrogation works.

Guest editor
Root and branch reform needed to tackle building safety
Guest Editor, Philip Bambagiotti of 3PB Barristers questions whether the proposed post Grenfell approach to building safety will deliver. A new law reform strategy is needed to address widespread problems of defective buildings, he argues.

Legislation state of play table
Our regular update on the progress of legislation and other developments affecting construction from News Editor Steve Dale who provides a commentary on the CLC’s reponse to rising inflation.

Reports from the courts
Our regular round up of recent court decisions of most interest to construction comes from Andrew Croft and Ben Spannuth of Beale & Company Solicitors LLP who examine a case that reinforces the courts’ robust approach to adjudication enforcement, and highlights the importance of compliance with the immediate payment obligation where the requisite notices have not been served; and a fire safety related case where the decision contrasts with a recent claimant-friendly decision.

Analysis
Five years on from Grenfell – a review of progress
News editor Steve Dale takes stock of the key building safety developments which have followed in the aftermath of the Grenfell Tower fire. Progress has been slow, with some corners of the industry being urged to show greater impetus.

CL guides
Contract Administration
In our latest CL Guides series article Lynn Auchterlonie of DLA Piper examines the role of the Contracts Administrator.

Technology
Enabling the digital twin
Anne-Marie Friel and Alastair Dale of Pinsent Masons LLP explain why BIM will be at the heart of developing the ‘golden thread’ of digital information, and argue that contracts and procurement strategies need to change their approach to accommodate this.

Contracts
Dealing with inflation under NEC Secondary Option X1
Inflation is a problem for the industry and it is getting worse. Isobel Moorhouse and Jane Hughes of Trowers & Hamlins LLP examine how the NEC4 engineering and construction contract handles the need for price adjustments.

Limitation Clauses
The limits of limitation of liability clauses
Barristers Chris Bryden and Georgia Whiting of 4 King’s Bench Walk review recent case law affecting the use and limits of limitation clauses, which reaffirms that the courts are likely to take a strict approach to the construction of an exclusion or limitation clause, particularly where the right in question is a valuable one.

Arbitration
Tiered Alternative Dispute Resolution Agreements
Vijay K. Bange of Duane Morris examines a recent Hong Kong court decision affecting tiered Alternative Dispute Resolution (ADR) provisions that considers if it is within the jurisdiction of the courts to decide if the parties to a contract have complied with the ratchet dispute resolution procedure, or whether this should be dealt with by the arbitral tribunal.

Insurance
Insurers still challenging Covid claims
Insurance expert John D Wright of JD Risk Associates warns that although Covid remains a threat to businesses the insurance industry does not regard pandemics as being covered by non damage denial of access clauses. A Supreme Court ruling leaves some existing individual claims unresolved.

Alternative dispute resolution
ADR’s place in the Digital Justice System
Our latest alternative dispute resolution series article, from Tracey Summerell of Dentons UK and Middle East, analyses the role that might be played by ADR as the justice system digitalises.

Editor’s comment
Social value a procurement challenge
Editor Nick Barrett asks how assessing social value factors in bids will be handled when the Procurement Bill becomes law.

News 
This month’s news roundup includes a look at the long awaited Procurement Bill, plus a warning that claims related to the impacts of the Ukraine crisis are on the rise and a report that highlights significant modern slavery risks in the sector.

Legal terms explained
Valerie Chee and Mathew Shelley of Herbert Smith Freehills LLP explain how performance guarantees and liquidated damages allocate risk in contracts.

Guest editor
The Sky’s the Limit – but how long will that be true?
Guest Editor James Davison of 3PB Barristers bemoans the disproportionality between the amounts in dispute in some low value cases and the legal costs, and asks if the Construction Act, which is starting to feel like a solution to a problem from another time, needs reform

Legislation state of play table
Our regular update on the progress of legislation and other developments affecting construction from News Editor Steve Dale who provides a commentary on the Levelling Up & Regeneration Bill.

Reports from the courts
Our regular round up of recent court decisions of most interest to construction comes from Andrew Croft and Ben Spannuth of Beale & Company Solicitors LLP who report on a rare example of the courts refusing enforcement of an adjudicator’s decision; and another that acts as a reminder to ensure that the basis of the pricing and the payment mechanism in a contract is expressed clearly and understood from the outset to avoid later disputes.

Analysis
Sustainability in Construction
Zoe Stollard and Alex Clark of Browne Jacobson report from a Roundtable event involving construction, manufacturing and energy clients that discussed, among other things, best practice in low carbon procurement. Firms must ensure the principles of sustainable construction are not superseded by cost and aesthetics, it was highlighted.

CL guides
FIDIC
The latest in our Construction Guides series comes from Rachel Chaplin of DLA Piper who examines key aspects of the FIDIC suite of contracts.

Adjudication
“What goes without saying…”
Barrister, arbitrator and adjudicator Karen Gough of 39 Essex Chambers London describes the circumstances under which parties to adjudications can refuse to pay adjudicator’s fees, examining a Court of Appeal decision that clarifies adjudicators’ entitlement to payment on resignation for grounds not expressly dealt with in the Act or Scheme.

When a frolic becomes unfair
Barry Hembling of Watson, Farley & Williams LLP analyses two recent adjudication related judgements with implications for when a decision can be set aside on natural justice grounds. Have they provided more questions than answers?

Legislation
Building Safety Act 2022
Christopher Leadbetter, Sharni Mellors, and Iain Boyle of Clyde & Co provide an overview of the main features of the Building Safety Act, the largest ever statutory intervention in the construction industry. New obligations will impact almost all levels of the construction and development industries, they say.

Contracts
Climate clauses for construction contracts
A group of construction professionals, including lawyers, has taken a pro bono initiative to draft contract clauses to support the climate change battle. Leonie Brabant and Josh van den Dries of the Chancery Lane Project outlines the clauses and invites industry support for further related developments.

Insurance
Practical Completion – the elephant in the room
Insurance expert John D Wright of JD Risk Associates examines the insurance implications of practical completion. Liabilities for liquidated damages end with practical completion, but this can throw up difficulties, he warns.

Alternative dispute resolution
Disputes of the future?
Tracey Summerell of Dentons UK and Middle East reports from a disputes conference in our latest alternative dispute resolution series article. Sustainability and human rights will increasingly feature in contracts, it is clear.

Editor’s comment
Modern slavery reporting lacks conviction
News Editor Steve Dale considers how shortcomings in modern slavery reporting among large companies can be addressed to help stamp out the problem.

News
This month’s news roundup leads with Housing Secretary Michael Gove’s threat to pursue cladding manufacturers for contributions to remediating unsafe buildings. We also focus on the implications of a new procurement directive that could see public authorities cutting ties with Russian suppliers, and a fresh call for legislation on cash retentions.

Legal terms explained
Stephanie Lam and Mathew Shelley of Herbert Smith Freehills LLP explain what is meant by reasonable skill and care.

Guest editor
Beyond the Looking Glass
Guest Editors James Wyatt, Megan Everett and Robert Meakin of Clyde & Co highlight key risks facing construction as revealed in their recent Looking Glass Report. The industry has the adaptability to thrive if it tackles the risks head-on and embraces new practices.

Legislation state of play table
Our regular update on the progress of legislation and other developments affecting construction from News Editor Steve Dale who provides a commentary on a CLC guidance note on collaboration.

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 examines a case that will interest anyone hoping to invoke force majeure clauses against the background of sanctions against Russia; and another that serves as a reminder that terminating parties must take care to follow contractual termination procedures in their entirety.

Analysis
UK construction urgently needs challenging leadership
In a call to long overdue action barrister Rudi Klein of KleinLegal, formerly CEO of the Specialist Engineering Contractors Group, and risk management consultant Stephen Woodward argue that despite widespread recognition that the industry’s business model is unsustainable, reform will not be achieved unless all those with a passion for radical industry improvement are prepared to join forces to put the industry on a healthier and viable footing.

CL guides
Termination
The latest in our Construction Law guides series from DLA Piper is by Clare Rushton, who examines termination provisions in contracts. Termination is rarely uncontentious and frequently results in significant disputes, she warns.

Procurement
Procuring Net Zero Carbon Construction
Professor David Mosey of King’s College London Centre of Construction Law & Dispute Resolution explains how all parties in the supply chain can use procurement and contracting systems to meet net zero carbon targets.

Arbitration
Amuse Bouche to the Arbitration Act Reform
Theresa Mohammed and Laura Lintott of Trowers & Hamlins LLP report on the Law Commission’s review of the Arbitration Act 1996. The hope is that reforms will increase enthusiasm for English Law to continue to dominate as the preferred choice of law for international arbitrations.

Adjudication
Pay Up or Feel the Heat: Grove in Action
Barrister James Davison of 3PB Barristers examines a 26 page Judgment from the Technology and Construction Court that touches on the key issues for payment rights and adjudication. Changes to the way parties approach adjudication are recommended.

Contracts
A discussion of JCT Fluctuations Options A, B and C
Jane Hughes and Isobel Moorhouse of Trowers & Hamlins LLP analyse the fluctuation clauses in the JCT Design & Build contract, which are becoming increasingly important against a background of rising inflation. Which type of fluctuation provision to incorporate in a contract, and whether to amend it, will be highly project specific.

Insurance
Insurance brokers can be your allies
Insurance expert John D Wright explains why insurance brokers can be valuable allies to construction companies facing increasingly complex challenges. Choice of broker is always important as some might not always meet the standard of care demanded.

Alternative dispute resolution
Answering the substantive claim
In our latest alternative dispute resolution series article Millie Leonard of Dentons UK and Middle East examines an appeal ruling in a case where a party sought to stay proceedings as issues were being referred to arbitration.