Construction Law October 2024

Editor’s comment
Amicable dispute resolution clauses could be a holy grail
Editor Nick Barrett warns that lack of overseas investor confidence could hamper hopes to attract them to invest in UK utilities, but asks if they are investors that the UK wants?

News
Our regular news round up focusses on a report calling for a comprehensive reform of the Private Finance Initiative model used previously to support a new generation of privately financed infrastructure; a warning that the Procurement Act delay could stall contract awards; and doubts about the chances of a new large nuclear plant at Wylfa.

Legal terms explained
Tse Wei Lim and Wei Qi Ng of Herbert Smith Freehills LLP examine what is meant by Disruption.

Guest editor
Covid lessons for force majeure and reasonable endeavours
Guest Editor Daniel Warren of DLA Piper UK LLP finds a key lesson learned from the Covid pandemic was the importance of properly negotiated and understood force majeure clauses. The pandemic proved the value of collaborative approaches.

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 latest round up the court decisions of most interest to construction comes from Andrew Croft, Benjamin Spannuth and Daniela Miklova of Beale & Company Solicitors LLP, who look at a Court of Appeal ruling relating to termination rights; and another that says true value adjudications cannot commence before the amount awarded in a previous adjudication regarding a dispute in the same payment cycle is paid.

Analysis
Supply chain compliance issues in Saudi Arabia
James Daniell and Julian Haslam-Jones of Alvarez & Marsal Disputes and Investigations Dubai office consider the growing importance of compliance issues in Saudi Arabia. Non-compliance with local laws and international standards can result in financial penalties, delays, additional costs and reputational damage, they warn.

CL guides
Variations
The latest in our Construction Guides series comes from Daniel Warren of DLP Piper LLP who explains what you need to know about variations.

Regulatory system
Key recommendations of the Grenfell Tower Inquiry Report
Katherine Metcalfe of Pinsent Masons examines the key recommendations of the Grenfell Tower Inquiry Report that she says makes for sobering reading. The residents of the Grenfell Tower were comprehensively let down by a broken regulatory system whose repair will have a far reaching impact on the construction industry.

Grenfell Inquiry
Grenfell Inquiry findings
Ed John and Nadine Obayda of Keystone Law focus on the implications for manufacturers of construction products following publication of the Grenfell Tower Inquiry Report. Litigation is expected to follow now the report has been published, and residents and leaseholders with dwellings unfit for habitation will generally find it easiest to claim losses against the contractor or developer under the DPA 1972.

Limitation
Where’s the trigger?
Karen Gough of 39 Essex Chambers examines a recent case concerning a claim under the NHBC’s Buildmark certification and insurance scheme. A key question raised was when does time start to run for claims under the scheme; an issue needing further clarification.

Collateral warranties
Most collateral warranties will not be construction contracts, rules Supreme Court
Collateral warranties are not contracts according to a Supreme Court ruling that overturns a position established eleven years ago by the Appeal Court. Scott Stiegler, Bradley Linday and Xara Kaye of Vinson & Elkins say that parties wanting to capture the benefits of adjudication might now include express adjudication clauses in collateral warranties.

Insurance
Delayed Completion Coverage
Insurance expert John D Wright warns against overlooking revenue losses from delayed completions of projects when seeking insurance cover. Increasing use of private finance on public sector schemes will likely lead to increasing demand for such policies.

Alternative dispute resolution
Mediation in the Middle East
Our regular alternative dispute resolution series article comes from Suzannah Fairbairn and Melissa Mallon of Dentons UK and Middle East LLP who report that mediation is seeing increasing use to resolve disputes in the Middle East.

Poll reveals lack of confidence among industry professionals

Civil engineering costs will rise by 15% over the next five years to the second quarter of 2029, while civil engineering tender prices will rise by 23% over the same period, according to the latest Building Cost Information Service (BCIS) Tender price index.

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Social value can fuel ‘purpose’ to transform infrastructure delivery, says report

Social value is often limited to being a mere question in infrastructure procurement and needs to move to be central to purpose driven delivery of projects, says a report from Jacobs and the Major Projects Association.

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Confusion surrounds government infrastructure investment plans ahead of Budget

Government Ministers are being asked to draw up plans for billions of pounds in cuts to infrastructure projects over the next 18 months according to national newspaper reports.

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Contractor fined for noise nuisance on site

Bath based contractor Soldi Investments Ltd has been fined by Cheltenham Magistrates Court, after being found guilty of failing to comply with a Control of Pollution Act notice to control noise during the construction of a Cheltenham supermarket.

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Infrastructure opportunities highlighted in EY report

Private sector investment in UK infrastructure and capital projects would have to double by 2040 if a multi billion pound shortfall is to be made up, says a report from consultants EY.

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Covid lessons for force majeure and reasonable endeavours

Guest Editor Daniel Warren of DLA Piper UK LLP finds a key lesson learned from the Covid pandemic was the importance of properly negotiated and understood force majeure clauses. The pandemic proved the value of collaborative approaches.

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Legislation state of play table 293

This table, prepared by Alignment Media, provides a regularly amended guide to new and proposed legislation that will affect the construction industry. In addition to EU Directives and UK legislation, the table includes notes highlighting discussion papers issued by both government and non-government organisations, and commentary on the latest developments.

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