Construction Law, April 2021

Editor’s comment
A bank that doesn’t go far enough?
Editor Nick Barrett says the new Infrastructure Investment Bank won’t fund much of the UK’s infrastructure but deserves a chance to prove it can catalyse private sector investments.

This month’s news roundup features a warning from the Public Accounts Committee that taxpayer money risks being wasted as PFI contracts expire, an industry plan to reduce self-employment on construction sites through procurement, and details of a court ruling which saw Bechtel fail in its challenge to a High Speed 2 contract award.

Legal terms explained
Noe Minamikata and Adya Garg of Herbert Smith Freehills LLP on the draft Building Safety Bill.

Guest editor
Alliance contracting: an Australian perspective
Guest Editors Wayne Harrison and Ed Shaw of DLA Piper suggest that it is time the UK turned away from traditional forms of contracting towards alliance contracting, which is proving itself in Australia.

Legislation state of play table
Dentons UK and Middle East LLP provide our regular update on the progress of legislation affecting construction. Tracey Summerell and Mark Macaulay comment on the Law Commission’s consultation on smart contracts.

Reports from the courts
Our regular round up of the key court decisions affecting construction comes from Andrew Croft and Ben Spannuth of Beale & Company Solicitors LLP. In one case the court overturned an application for summary judgment seeking enforcement of an adjudicators decision; in another the court dismissed a council’s challenge to an enforcement.

Private finance handbacks threaten disputes
Parliament’s public spending watchdog the Public Accounts Committee has made another attack on the Private Finance Initiative, this time warning that sloppy handing back of the £60 billion of assets created under it could cost the taxpayer even more wasted money. Disputes seem almost certain, Nick Barrett reports.

CL guides
NEC4 (Part 1)
Corinne McCarthy of DLA Piper explains the NEC4 suite of contracts in our latest CL Guide series article. Part 2 follows next month.

Just wait a minute!

Barrister Karen Gough, of 39 Essex Chambers, explains how attempted smash and grab tactics can backfire in adjudications, with reference to a case where she acted for one of the parties. The case also shows the risks of serving adjudication notices by email.

Price evaluation models for construction procurement
In this article based on a recent ‘White Paper’, Rebecca Rees and Stuart Brown of Trowers & Hamlins argue that it is essential that the industry finds alternatives to lowest price bidding and suggest other price evaluation models that could be trialled. Collaboration could also be enhanced by a changed emphasis at the procurement stage.

Contractual Discretions and their exercise
Good faith is not recognised as a contractual term in English law but in an increasing number of judicial determinations a duty of good faith will be applied by way of exception. Cecily Davis of Fieldfisher examines relevant case law.

Re-purposing green assets for hydrogen production
Eran Chvika and Dominique Nkoyok of Pinsent Masons LLP’s Paris Office review the opportunities for energy and infrastructure companies to focus on the production of ‘green’ hydrogen. Contractors should expect to take on most of the risks under contracts, they warn, and strict contractual obligations on safety and security and on the interface of works carried out by others are likely to flow from tight regulations and conditions imposed by financiers.

Green light for Covid claims?
Our insurance expert John D Wright of JD Risk Associates examines the implications for insurance of a Supreme Court judgment relating to business interruption cover. Not all policyholders will be pleased by the outcome once they appreciate the implications, he warns.

Alternative dispute resolution
Don’t log off: the path to positive online mediation
In our latest Alternative Dispute Resolution article Linzi Hedalen of Dentons UK and Middle East LLP set out key benefits of virtual mediation and helpful tips for those engaging in the process.