Construction Law: November 2021

Editor’s comment
Combatting climate change could also boost procurement skills
Construction procurement will be in the front line of government’s drive towards decarbonisation. Editor Nick Barrett says promises of training for procurement professionals to support net zero carbon ambitions is something to be welcomed.

This month’s news roundup covers concerns over supply chain distress and delayed projects, despite an exceptionally low number of profit warnings being recorded in the sector. Also featured are details of updated guidance for managing Covid impacts within contracts and a call to speed up reforms set out in the Construction Playbook.

Legal terms explained
Lucinda Hill and Rahul Prakash of Herbert Smith Freehills LLP explain what negligence means.

Guest editor
Another nail in the coffin for challenges to liquidated damages
Guest Editors Peter O’Brien and Thomas Wheeler of Clyde & Co say recent court decisions show reluctance to look behind what parties have agreed to find a liquidated damages clause unenforceable. Applying the same principles in some scenarios could lead to double recovery of losses by Employers, they warn.

Legislation state of play table
Our regular update on the progress of legislation as it passes through the legislative process comes from Dentons UK & Middle East LLP. Tracey Summerell and Akin Akinbode comments on the UK’s net- zero carbon strategy.

Reports from the courts
Our latest round up of court cases of most interest to construction comes from Andrew Croft and Ben Spannuth of Beale & Company Solicitors LLP. One judgment reinforces the view that the courts will support ‘the natural and ordinary meaning of the words used’ in commercial agreements; and in a Scottish case the judgment warns against ‘contrived or technical defences’ which the courts will ‘examine with a degree of scepticism’.

Strategic focus could prevent race to the bottom on costs, say MPs
With publication of the government’s Comprehensive Spending Review, construction is pinning a lot of hopes for future workloads on government promises about ‘levelling up’ left behind parts of the UK, which is to be at least partly addressed by significant infrastructure investment. Details are only starting to come through but doubts have been raised by MPs that the government even knows what levelling up means, Nick Barrett reports.

CL guides
Defects provisions in constructions contracts
In our latest guides to construction law series article Tom Manley of DLA Piper looks at defects provisions in contracts.

Choice of English law for international construction contracts
Mark Macaulay and Gurbinder Grewal of Dentons Middle East and UK LLP consider why English law is a popular choice for construction contracts internationally. Cultural reasons contribute to the high reputation of UK law for doing business under.

Supreme Court Triple Point ruling prompts NEC4 amendments
Tom Howell of Beale & Company LLP examines the potential impact on NEC contracts of a Supreme Court ruling that reversed an Appeal Court decision. Case law now supports the ‘orthodox’ approach to the application of liquidated damages prior to contract termination.

Adjudication: Just one [dispute] at a time please!
Karen Gough of 39 Essex Chambers analyses a seldom reported fact about adjudication, that despite it being established that an adjudicator can only deal with a single dispute in an adjudication, satellite disputes and jurisdictional challenges continually arise around the issue.

Constructing an Agreement – Mediation in the Construction Industry.
Chris Bryden and Georgia Whiting of 4 King’s Bench Walk lament the industry’s reluctance to adopt mediation more enthusiastically than it has. There is much to gain, and little to lose, by using mediation to resolve disputes, they argue.

The ins and outs of subrogation
Insurance expert John D Wright of JD Risk Associates analyses the common law principle of subrogation which is intended to ensure that parties responsible for losses are held accountable. The idea is simple, but complex issues can arise, he warns.

Alternative dispute resolution
Courtesy paves the way for compromise – and wellbeing
Tracey Summerell of Dentons UK & Middle East LLP argues that alternative dispute resolution is more likely to produce a process that promotes positive mental health as well as satisfactory business outcomes.