Construction Law: June 2024

Editor’s comment
Biodiversity uncertainty highlighted in NAO report
Starving local authorities of funds has hollowed out engineering and planning departments and the impact is undermining government’s ability to pursue its own policies, Editor Nick Barrett says.

News 
Our regular news round up focusses on a disputes survey that suggests artificial intelligence will have an impact on contracts sooner than many think; a Labour Party plan that involves scrapping the IPA and the NIC; and a landmark legal victory for the government that forces a freeholder to fix serious building safety issues in a tower block.

Legal terms explained
Anant Rangan of Herbert Smith Freehills LLP explains what is meant by the term serial adjudication.

Guest editor
Insolvency in construction: the ‘bounce back’?
Guest Editor Daniel Warren of DLA Piper UK LLP questions whether recent improvements in the economy are reflected in construction’s fortunes. If the rate of insolvencies in the industry is anything to go by, the answer is no, he says.

Legislation state of play table
Our regular update on the progress of regulations and legislation affecting construction and procurement compiled by Alignment Media.

Reports from the courts
Our regular round up of the court cases of most interest to construction comes from Andrew Croft, Ben Spannuth and Daniela Miklova of Beale & Company Solicitors LLP, who look at a judgment that serves as a reminder that the relevant provision must form part of a party’s standard written terms for the Unfair Contract Terms Act to apply; and one highlighting that parties should ensure they understand the wording and effect of their contractual provisions before contracting with another party.

Analysis
Avoiding Investor Pitfalls in Complex Construction Financing Arrangements
Construction constantly becomes more complex, in engineering and organisation and legal aspects. Lawrence Winsor of Vinson & Elkins’ New York office says project financing is increasing in complexity as well. Some simple tactics can help avoid pitfalls and disputes.

CL guides
Insuring a Construction Project
The latest in our Guides to Construction Law series comes from Jessica Tierney of DLA Piper UK LLP who looks at the key types of insurance cover widely used in the industry.

Early Contractor Involvement
Risks and opportunities of ECI and NEC option X22
Early contractor involvement is a growing trend as clients take on board the message that it can lead to better project outcomes. It demands more proactive management however, as Anne-Marie Friel and Sam Roberts of Pinsent Masons LLP stress in this examination of NEC’s Option X22 which provides a mechanism for managing early engagement of contractors.

Insolvency
Step Forward Step in Rights?
Alex White and Jane Hughes of Trowers & Hamlins LLP describe the benefits and disadvantages of exercising step in rights. which are exercised only rarely despite the expense incurred in negotiating them. But parties, particularly funders, insist on having them.

Final payment notices
Has your Final Payment Notice become Conclusive?
Stephanie Geesink, Counsel, and Dom Turner-Harriss of Watson Farley & Williams LLP examine a case that provides guidance on when a Final Payment notice can be challenged. The judgment is vital case law, they argue.

Collaboration
Alliancing to solve antagonism in public procurement – an Italian perspective
Professor Sara Valaguzza of the University of Milan provides an Italian perspective on what seems to be a worldwide drive towards more collaborative ways of working on construction and engineering projects. In this first part of a two part article, she argues that public contracting authorities and private parties often behave as if they were adversaries from the start, so the construction phase is constantly at risk of becoming a disputes battleground.

Insurance
Policy Drafting – an underrated skill
Our insurance expert John D Wright of JD Risk Associates warns against failing to pay attention to the drafting of policies. Could leaving it to juniors, as has often been the case, explain the sheer volume of insurance related court cases, he asks?

Alternative dispute resolution
Practical steps for meeting the JCT’s collaboration requirement
Our latest alternative dispute resolution series article comes from Tracey Summerell of Dentons UK & Middle East LLP who looks at the collaborative working aspects of the new JCT 2024 Design and Build contract.