Construction Law: August/September 2016

Editor’s comment    
Brexit post major challenges
Editor Nick Barrett says there are major challenges ahead as the construction supply chain adjusts to a post Brexit procurement regime. The tasks ahead might be beyond the skills and experience of government and the industry, but the steep learning curve will have to be climbed.

News
Our regular news round up focuses on a report alleging that ineffective procurement and contracts create low productivity in the infrastructure sector; a Supreme Court split in a case affecting employers’ liability insurance; and a warning that clients and tier one contractors need to do more to eradicate unfair labour practices.

Legal terms explained
Jo Bindley of Pinsent Masons explains what is meant by the phrase ‘to proceed regularly and diligently’.

Guest editor
Hudson reflects evolving construction law
Guest editor Robert Clay of Atkin Chambers, one of the authors of the recently published 13th edition of Hudson on Building and Engineering Contracts, explains the changes behind the need for a new edition. There may be a need for a separate PFI section after disputes arising from these contracts reach the courts in the next edition due in 2021.

Legislation state of play table
Clyde & Co with our regular update of the progress of legislation affecting construction as it passes through the EC and UK legislative systems. Richard Kniveton provides a commentary on the government’s response to consultation on the National Infrastructure Commission.

Reports from the courts
In our latest court reports analyses Andrew Croft and Simii Sivapalan of Beale & Company Solicitors LLP focus on a ruling concerning whether NEC3 Option W2 is consistent with the Construction Act; and another that highlights the importance of clear and Act compliant payment notice periods.

Contracts monitor
Provisions create problems
Contracts monitor Michael Phipps, Principal of Thurston Consultants, continues his scrutiny of RIBA’s Concise Building Contract and finds a raft of potential problems. More definitions would help.

Alliancing
A first for frameworks
Professor David Mosey of the Centre of Construction Law at King’s College London, explains the thinking behind the launch of the new standard form Framework Alliance Contract by the Association of Consultant Architects. FAC-1 is already being used on construction and infrastructure works as well as professional and environmental services.

Contracts
NEC3 – not to be left in the drawer
Will Buckby of Beale & Company Solicitors LLP warns that NEC3 users who think it is good enough to leave the contracts in the drawer are missing out on valuable project and risk management tools, as well as heightening the risk of disputes.

Stop, look and listen
Amending standard forms is usually advised against, but Ed Freeman and Rachel Chaplin of Clyde & Co argue that amendments can often make sense. Choosing the right contract from the outset though can avoid the need for many amendments.

Liability
Decennial liability creates unfamiliar risks
The State of Qatar’s construction market is attracting a lot of interest with a large programme of work related to hosting the 2022 World Cup. Andrew Jones of Dentons explains what contractors and consultants need to look out for under Qatar’s unfamiliar decennial liability regime.

Dispute resolution
‘Gaps’ can end in tears
Multi-tiered dispute resolution clauses can save parties time and money but, as Elizabeth Kantor and Philip Parrott of Herbert Smith Freehills warn, there are potential pitfalls to watch out for.

Insurance
Bargain basements?
Insurance expert John D Wright of JD Risk Associates looks into the issues around the current trend for excavating extensive basements below prime London properties. Following a number of high profile building collapses, full cover may be hard to find.

Alternative dispute resolution
Adjudication pilot scheme expands
Christine Gordon of Clyde & Co examines an adjudication pilot scheme for professional negligence claims for its potential impact on construction in our latest alternative dispute resolution series article.

Construction Law: July 2016

Editor’s comment    
Professional negligence adjudication pilot
Adjudication has been a success for the industry and is catching the eye of judges involved in other areas, says Editor Nick Barrett who reports on a pilot scheme to extend its use to professional negligence in fields other than construction.

News
Our regular news round up finds the JCT launching the first of its 2016 edition of contracts; publication of a new edition of industry standard work Keating on Construction Contracts; and publication of a framework alliance contract by  the Association of Consultant Architects, said to be a first.

Legal terms explained
Andy Batty of Pinsent Masons explains ambiguities that can arise in contracts.

Guest editor
When two worlds go to war  
Guest editor Michael Hopkins of Pinsent Masons examines what happens when two worlds collide –adjudication and payment. Which has the upper hand?

Legislation state of play table
Our regular round up of the progress of legislation affecting construction passing through the EC and UK legislative systems from Clyde & Co. Tim Axtmann and Nathaniel Horrocks-Burns provide a commentary on the apprenticeship levy.

Reports from the courts 
Our regular round up of court decisions comes from Andrew Croft and Natalie Ledger of Beale & Company Solicitors LLP includes a case highlighting that mutual indemnity or exclusion clauses between equal parties are likely to be upheld; and an appeal against an arbitration decision relating to interest payment.

Contracts monitor
List of defined terms needed  
Our contracts monitor Michael Phipps, Principal of Thurston Consultants, continues his analysis of the RIBA Concise Building Contract 2014, warning that further explanation of terms used in relation to insurance is needed.

Dispute avoidance
Early warning and early resolution 
A technology platform based early warning system for spotting potential disputes and resolving them before they have time to fester – science fiction? Martin Burns, Head of Alternative Dispute Resolution Research and Development at the Royal Institution of Chartered Surveyors and Edward Moore, Chief Executive of ResoLex, insist it is fact and will be available this year.

Procurement
The new rules on tendering for concession contracts 
Nick Pimlott and Alexandra Hackney of Fieldfisher examine new rules for tendering concession contracts that represent a regulatory sea change. The risk of legal challenges has risen, they warn.

CDM Regulations
The CDM Regulations one year on
The industry has had a year to get to grips with the revised CDM Regulations. Jane Miles of Dentons reviews the key issues that have arisen over the year and suggests how they can be dealt with.

Contracts
What makes a process plant contract different?
Simon Colegate of Weightmans reviews what it is about process plant contracts that makes them different from construction contracts. Hybrids of the two create problems, as he explains.

It’s not fair
Sean Brannigan QC and Claire Packman of 4 Pump Court analyse recent cases to ask if construction contracts can still be subject to the Unfair Contract Terms Act 1977. If even some of a party’s standard terms are incorporated, the answer could be yes.

Insurance
Professional indemnity – design and build option
Insurance expert John D Wright of JD Risk Associates explains the market for professional indemnity cover for design and build contracts. Contractors need additional clauses to ensure they are properly protected, he warns.

Alternative dispute resolution
The severability of adjudication decisions 
In our latest alternative dispute resolution series article Alex Gandhi and Rachel Chaplin of Clyde & Co examine a recent judgment that extends the principle of severability of an adjudicator’s decision.

Construction Law: May 2016

Editor’s comment
Whitehall culture needs to be changed
Civil service commercial skills have come in for another blistering attack from MPs who urge the Cabinet Office to up its game to force change. Editor Nick Barrett suggests that a culture change might be needed if public sector contracts are to be properly managed.

News 
Our news round-up focuses on another attack on public sector procurement skills from the Public Accounts Committee; a six year jail sentence handed down to a contractor for gross negligence manslaughter; and a report highlighting widespread ignorance about the recently introduced Modern Slavery Act.

Legal terms explained
Simon Stubbs of Pinsent Masons explains the meaning of endeavour clauses.

Guest editor
No late payment silver bullet
Guest editor Andrew Croft of Beale & Company Solicitors LLP examines the merits of recent steps taken to tackle late payment, and suggests some other possible paths to improvement. The Construction Act is under review, but don’t rely on legislation, he argues.

Legislation state of play table
Our regular update, charting the progress of legislation affecting construction as it passes through the UK and EC systems, comes from Clyde & Co. Rachel Chaplin provides a commentary on the National Infrastructure Commission’s reports.

Reports from the courts
Our regular round up of the court decisions of most interest to construction from Andrew Croft and Natalie Ledger of Beale & Company Solicitors LLP includes a case that highlights the importance of clearly allocating risk in a contract; and one where the parties failed to ensure that an amendment was reflected throughout the contract.

Contracts monitor
Logical pattern removes scope for lame excuses
Contracts monitor Michael Phipps, Principal of Thurston Consultants, turns to the insurance and payment clauses of RIBA’s Concise Building Contract 2014. Some prospects of withholding due payments using ‘lame’ excuses have been removed, he notes.

Arbitration
Arbitrator receives apparent bias ruling  
Doubts about the apparent impartiality of an arbitrator were at the centre of a recent action over his involvement in the process, as Vijay Bange of Trowers & Hamlins reports. Bias is not an issue to be raised lightly, the case demonstrates.

Legislation
Slavery a modern issue 
Brett Hartley of Clyde & Co examines the new supply chain transparency reporting obligations under the UK’s Modern Slavery Act 2015. While targeting larger organisations, all tiers of suppliers operating in the construction sector are likely to feel the effects of the new reporting requirements.

Contracts
Don’t miss the planning risk express!
Julie Teal and Jennifer Badham of Withers analyse a recent case that shows the advantages of having express terms clearly allocating responsibility for obtaining planning consents rather than relying on implied terms in contracts. With planning permissions, it pays to plan ahead.

Expert witnesses
Experts have lessons to learn
Paul Newman of 3PB Barristers reviews recent case law in relation to the use and operation of expert witnesses. Lessons need to be learned by experts themselves as well as the parties and legal counsel instructing them.

Payment
More pay less confusion
Amanda Burge of Hamlins reviews recent court decisions concerning the vexed issue of payments and pay less notices. More attention to contract administration will be needed until the courts sort out the difficulties this area of construction law has got into, she warns.

Insurance
Completion not practically defined
Insurance expert John D Wright of JD Risk Associates explains the insurance perspective on difficulties associated with handover. Case law is inconclusive in several areas but careful definitions can save a lot of problems.

Alternative dispute resolution
Multiple adjudications with the same adjudicator
In our latest alternative dispute resolution series article David Owens of Clyde & Co reports on a rare success for a challenge to an adjudicator’s jurisdiction.

Construction Law, April 2016

Editor’s comment
Infrastructure red flags ignored
Potential problems with delivery of the UK’s ambitious infrastructure plans have been highlighted by the Public Accounts Committee in a hard hitting report. Editor Nick Barrett finds the MPs wondering if government even listens.

News
In News this month we report on procurement management shortcomings being blamed for delaying London’s tube modernisation by five years; new Scottish government procurement rules coming into force; and the Budget being used to reaffirm government commitment to Building Information Modelling.

Legal terms explained
Rachel Thompson of Pinsent Masons explains what is meant by legal privilege.

Guest editor
BIM – time to embrace change
Guest editor Vijay Bange of Trowers & Hamlins suggests that lack of funders’ interest in operating costs might be one reason why the take up of Building Information Modelling under private finance initiative type schemes has been so slow. More generally, parties are wary of sharing information.

Legislation state of play table
Clyde & Co compile our regular update of the progress of legislation affecting construction as it passes through the UK and EC legislative systems. Nathaniel Horrocks-Burns of Clyde & Co provides a commentary on new sentencing guidelines for health and safety law breaches.

Reports from the courts
Our regular round up of court decisions, from Andrew Croft and Natalie Ledger of Beale & Company, examines a cautionary tale of the dangers of giving informal advice as it may create a tortious duty of care; a court ruling on whether a variation can be agreed by email; and a Scottish case where the court was willing to uphold obligations to provide collateral warranties.

Contracts monitor
Field books might still have a place
Continuing his review of RIBA’s Concise Building Contract 2014, our contracts monitor Michael Phipps, Principal of Thurston Consultants, finds examples of odd wordings and evidence of inadequate text checking.

Exclusion clauses
Courts take broad view on exclusion clauses
Shona Frame of CMS examines exclusion clauses, which recently came under the scrutiny of the courts. These recent decisions suggest that broad interpretations of the losses intended to be excluded are likely to prevail over linguistic arguments as to how particular phrases might be applied in varying circumstances.

Expert witnesses
Do I need an expert?
The courts have discretion in controlling how much, and whether, expert evidence is required or permissible. Barrister Paul Newman of 3PB reviews recent case law that touches upon the question of whether in the opinion of the courts expert evidence is required.

Procurement
Remedies in procurement challenges
Challenges to public sector contract awards are becoming more common, particularly for larger framework type arrangements. Cecily Davis of Fieldfisher looks at recent challenges that reached the courts – could a court order who a contract should be awarded to?

Time at large
What does ‘time at large’ mean?
Barrister Omar Eljadi of Atkin Chambers says the judicial rationale for doubts over whether time is set at large when no extension is awarded might be open to question. A deeper examination of the prevention principle is needed, he argues.

Adjudication
When enthusiasm outweighs common sense
Vijay Bange of Trowers & Hamlins analyses an enforcement of an adjudicator’s decision which highlights that even though an adjudicator is appointed under a contract which later transpires to be the incorrect one, the adjudicator will have jurisdiction if the basis of his appointment remains the same.

Insurance
Beware of indemnity limits
Insurance expert John D Wright of JD Risk Associates warns about the importance of selecting a suitable level of limit on a professional indemnity or public liability policy. Aggregation clauses can mean that the limit is less than thought.

Alternative dispute resolution
Adjudicator’s decision was not predetermined
In our latest alternative dispute resolution series article Russell Banfi of Clyde & Co examines a case that highlights why adjudicators need to be wary of challenges to decisions based on alleged breaches of natural justice.

Construction Law, March 2016

In this month’s issue…

Editor’s comment
Action looms on Protocol
A review of the Pre-Action Protocol looks likely soon. Editor Nick Barrett echoes a TeCSA conclusion that only a light handed approach is needed to revise it.

News
Our news round up focuses on details of proposed JCT suite revisions;  TCC rejection of a use of natural justice arguments against an adjudicator’s decision; and a court ruling supporting a ‘common sense’ approach to a claim for additional interim payments.

Legal terms explained
Sam Wigley of Pinsent Masons explains implied terms.

Guest editor
The smash and grab TCC: a case of lost direction?  
‘Smash and grab’ adjudications may be undermining the cash flow aims of the Construction Act, but the Court of Appeal may have provided an opportunity for a brave employer to overturn this, says guest editor Richard Booth of Holman Fenwick Willan.

Legislation state of play table
Clyde & Co round up the progress of legislation affecting construction as it passes through the UK and EC legislative systems. Lois Putnam comments on the absence of an approved code of practice accompanying the new  CDM Regulations.

Reports from the courts     
Our round up of key court decisions from Andrew Croft and Simii Sivapalan of Beale & Company, includes an appeal court decision relating to pay less notices; and a case highlighting that the wording of limitation and exclusion clauses should be considered carefully.

Contracts monitor
Omission not good enough
Our contracts monitor Michael Phipps, Principal of Thurston Consultants, continues his scrutiny of RIBA’s Concise Building Contract. Among the problems found are some opaque sections, potentially problematic omissions, and meetings whose agreements might conflict with contract terms.

The year ahead
Expected legal and litigation trends in 2016
Barrister David Pliener of Hardwicke Chambers looks into his crystal ball and ponders what 2016 might hold for construction law. He asks whether costs will drive litigants away from the courts. Prepare for an imminent battle over the Pre-Action Protocol, he warns.

Arbitration
Arbitration: a new beginning?
The RICS has launched a new service that aims to provide a more cost effective approach to arbitration. Shy Jackson of Pinsent Masons, a member of the working group that devised the new service, explains how it works and the continuing attractions of arbitration, 20 years after the Arbitration Act.

Legislation
Approaching BIM – a legal perspective
Building Information Modelling (BIM) will be compulsory on public sector projects from April, but is the industry ready? Perhaps not fully, but Andrew Croft and Will Buckby of Beale & Company find that the UK is an international leader in BIM take-up in this review of where construction has got to.

Expert witnesses
Experts have lessons to learn
Expert witnesses attracted a fair amount of judicial comment over the past year. Ann Levin and Patrick Stone of Herbert Smith Freehills review the most recent cases providing guidance on a number of aspects of using expert witnesses.

Set-off
Set-off to apply to third parties
Suriya Edwards and Julie Teal of Withers review the state of play with set-off which they argue can be used as a cash flow booster as well as a remedy to contractors. A recent case reviewed extends the application of the set-off rule to apply to third party agreements.

Insurance
The implications of claims made policy wordings
Despite improvements in recent years, claims made policy wordings can conceal pitfalls for the unwary. Insurance expert John D Wright of JD Risk Associates advises on practical steps to minimise the risks.

Alternative dispute resolution
It’s not how you got there; it’s where you end up
In our latest alternative dispute resolution series article Rachel Chaplin of Clyde & Co examines the latest court ruling on an adjudication involving an oral contract.

Construction Law, January/February 2016

Editor’s comment
A risk worth taking?
Transformation projects pose the biggest risks according to a National Audit Office report on major infrastructure delivery. Editor Nick Barrett says any risks inherent in trying to transform infrastructure procurement have to be taken.

Legal terms explained
Hannah Wennell of Pinsent Masons explains penalty clauses, a topic where there is some recent case law.

Book review
Janey Milligan, Managing Director of Construction Dispute Resolution, reviews A Practical Guide to Construction Adjudication by James Pickavance, which deserves to become a staple on industry bookshelves.

Guest editor
Un-Belize-able: the diminishing role of commerciality
Parties will have to live and die by the wording of their contracts following an apparent Supreme Court volte-face on how contract terms are to be determined, warn guest editors Rachel Ansell QC and Matthew Thorne of 4 Pump Court.

Legislation state of play table
Our regular round up of the progress of legislation affecting construction as it passes through the UK and EC legislative systems comes from Clyde & Co, whose Chris Kerr comments on the merger of Infrastructure UK and the Major Projects Authority to create the new Infrastructure and Projects Authority.

Reports from the courts
Our round up of the key court decisions affecting construction from Andrew Croft and Simii Sivapalan of Beale & Company, includes a case highlighting that a limitation clause does not remove liabilities to all parties on a contract; and another where a court considered the late payment provisions of the ‘Construction Act’ where insolvency was a risk.

Contracts monitor
Mixing tenses has no place in contracts
Our contracts monitor Michael Phipps, Principal of Thurston Consultants, continues his scrutiny of the RIBA Concise Building Contract 2014. Some curious wordings leave some questions unanswered, he finds.

Adjudication
Key adjudication questions still unanswered
Last year was a busy one for adjudication cases coming to court. Lawrence Davies and Matthew Friedlander of Pinsent Masons review some of the key cases and the future impact they will have.

Review of the year
Review of the year in Scotland
Shona Frame and Madeleine Young of CMS review the main events in construction law in Scotland during 2015. A highlight was a rare example of an NEC contract being considered by the courts.

Interim payments
Payment issues clarified
Doug Wass of Macfarlanes LLP welcomes the clarity on interim payments provided by recent court decisions. Pay less notices that set out a revaluation of work are valid, employers will be pleased to learn.

Contract administration
Get with the programme!
Is incorporating the programme into the construction contract a good idea? VanWyck Johnson of Clyde & Co warns perhaps not, in this analysis of the value of effective programming.

Arbitration and insolvency
Insolvency Rules vs arbitration – which prevails?
Vijay Bange of Trowers & Hamlins analyses a dispute involving an insolvent contractor that provides guidance on whether the Insolvency Rules or an arbitration clause should apply. Arbitration prevailed so check your contract documentation, he urges.

Insurance
Litigation to fall under new Insurance Act
Insurance expert John D Wright of JD Risk Associates looks at the new Insurance Act coming into force this year, which should help policyholders and reduce litigation. The courts face a lengthy job of interpretation however.

Alternative dispute resolution
RICS and the Goldilocks principle
In our latest alternative dispute resolution series article David Owens of Clyde & Co examines the new, hopefully faster, arbitration service from the RICS.