Construction Law: December 2022

Editor’s comment
Virtue signallers beware
A report from the Institution of Civil Engineers should be taken as a clear warning that mere virtue signalling and ‘green-washing’ instead of properly addressing sustainability will frighten off infrastructure investors and lead to claims, warns Editor Nick Barrett.

This month’s news roundup features a report discussing how addressing climate-related risks on infrastructure projects can help to secure private sector funding and avoid future litigation. We also highlight a court ruling in which an adjudicator’s decision was enforced and detail a study which found that, on average, disputes are costing major projects more than a third of committed capital expenditure.

Legal terms explained
James Ballheimer and Mathew Shelley of Herbert Smith Freehills LLP continue their explanation of the Building Safety Act 2022 regulatory regime and associated secondary legislation.

Guest editor
The need for innovative solutions
Guest Editor Laura West of CMS argues that a new way of thinking of construction projects is needed to incentivise and drive innovation. Successful innovation projects recognise “innovation” as a separate process rather than trying to bake it into the design or construction phase.

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.

Reports from the courts
Our regular round up of court decisions of most interest to construction from Andrew Croft and Ben Spannuth of Beale & Company Solicitors LLP, analysing a judgment that highlights the importance of serving termination notices strictly in accordance with contractual requirements; and another that underlines the fundamental importance of proper service of a Notice of Adjudication.

Planning and procuring the digital golden thread
Anne-Marie Friel and Alastair Dale of Pinsent Masons LLP Infrastructure explain why contractors must implement carefully thought out digital procurement and contracting strategies to achieve critical safety and sustainability outcomes for projects.

CL guides
Key Ancillary Agreements
In our latest CL Guides series article from DLA Piper, Jon Baker examines surrounding ancillary agreements.

Construction Playbooks
Construction Playbooks support drive for change
Shona Frame of CMS examines the private sector response to the government’s Construction Playbook. Although they are both based on the same principles, care must be taken as aspects of them need to be considered in contract documentation.

Private Finance Initiative
High Court provides useful guidance on complex defects disputes
Mark Lawrence of Macfarlanes reports on a High Court judgment that provides insight into how the TCC will tackle a range of issues likely to arise as Private Finance Initiative contracts come to an end, as well as claims under other contracts.

Performance Bonds
Contractor losses flowing from bond calls
Kwadwo Sarkodie and Kiran Giblin of Mayer Brown International LLP look at how contractors can suffer repercussions from the Employer calling on performance bonds. The consequences for a contractor are potentially devastating, they warn.

When has an implied novation occurred?
Victoria Peckett and Victoria Coffey of Clyde & Co LLP consider a recent judgment that provides a reminder as to when an ‘implied novation’will be considered to have occurred. The case also provides guidance on the meaning of the phrase ‘such consent not to be unreasonably withheld’.

The true nature of insurance
Insurance expert John D Wright of JD Risk Associates analyses how the courts view the concept of insurable interest. The existence of insurable interest may be challenged in all kinds of unusual circumstances, he warns.

Alternative dispute resolution
The importance of recognising the effects of stress when settling supply chain disputes
In our latest Alternative Dispute Resolution series article Tracey Summerall of Dentons UK and Middle East LLP examines the role that stress can play in disputes.