UK: Legal Developments In Construction Law Update – December 2018

Last Updated: 17 January 2019
Article by Mayer Brown

Legal Developments In Construction Law Update – December 2018

Under the JCT 2011 Design and Build contract three notices have to be given, in order, before liquidated damages can be recovered by the employer. There is a non-completion notice, a notice warning that damages may be required, deducted or withheld and then the actual deduction notice. In S&T (UK) Ltd v Grove Developments Ltd the notices were received in the correct order, but the final, deduction, notice, was received just seven seconds after the warning notice. Was the contractor entitled to have a brief period after receiving the warning notice, to do something about it? Was service of the second and third notices so close together that it was not compliant with the contract?

The Court of Appeal was driven to the conclusion that it was compliant. It could not find, in the contract, any specific period of time that should elapse between serving the warning and deduction notices. Requiring a 'reasonable' lapse of time was unworkable, did not satisfy the requirements for an implied term and would create huge uncertainty in future cases. Where the contract required a specific period of time between notices, it said so. However surprising to a judge, clause 2.29 of the contract required no more than the giving of notices in a specified sequence. Judges should not generally impose their notions of commercial common sense upon the parties to business disputes. A scintilla of time between the two notices was enough.

S&T (UK) Ltd v Grove Developments Ltd [2018] EWCA Civ 2448

2. Court provides reminder of an architect's inspection duties and of the importance of evidence to support a claim

The dispute between Mrs Lejonvarn and Mr & Mrs Burgess over the Burgesses's landscaping project has already been the subject of two court judgments, one by the Court of Appeal. They ruled, in preliminary issues, that Mrs Lejonvarn owed the Burgesses a duty of care in tort in providing professional services as architect and project manager for the project. But after a third hearing the court had to decide if Mrs Lejonvarn was actually in breach of that duty of care. The court's judgment provides a helpful reminder of the extent of an architect's obligation to inspect and it also underlines the importance of the evidence necessary to support a claim.

The Burgesses's own architectural expert accepted that an architect would not be expected to identify structural defects and the judge noted that the Burgesses had done what Mr Justice Coulson (as he then was) had warned against in McGlinn v Waltham Contractors Ltd. They had assumed any claim for bad workmanship against the contractor must automatically be reflected in a claim against Mrs Lejonvarn on the basis that, if there is a defect, then she had been negligent for not identifying it and having it remedied. In McGlinn, Mr Justice Coulson summarised the legal principles relating to an architect's obligation to inspect and the court quoted that summary at paragraph 57 of its judgment in Burgess (see link below).

The court noted that, despite court case management and lengthy opening and closing submissions, the Burgesses's case and the precise breaches of duties alleged were still not clear. The judge was critical of the Burgesses's approach to their principal criticisms of Mrs Lejonvarn's performance and, in particular, of Mr Burgess's evidence. He rejected all of the alleged breaches of duty and dismissed the Burgesses's claim

Burgess & Anor v Lejonvarn [2018] EWHC 3166

3. Adjudication enforcement: Court of Appeal confirms extra ground for stay

In Wimbledon v Vago the court set out general guidance as to when enforcement of an adjudicator's decision should be stayed. In Gosvenor London Ltd v Aygun the Court of Appeal confirmed the addition of another principle, that, if the evidence demonstrates that there is a real risk that any judgment would go unsatisfied by reason of the claimant organising its financial affairs with the purpose of dissipating or disposing of the adjudication sum, so that it would not be available to be repaid, then this would also justify the grant of a stay

The party attempting to enforce an adjudication argued, however, that the extra principle should be qualified by stating that it could not be based on evidence that was or could have been deployed in the adjudication. The Court of Appeal disagreed, explaining that, on an application to stay, the court may be asked to weigh up the evidence and decide whether or not it demonstrates a real risk of dissipation. If the court concludes that there is a real risk that any future judgment in favour of the paying party would go unsatisfied, by reason of the dissipation of the judgment sum in the meantime, the court may grant the stay, regardless of what happened (or what could have happened) in the adjudication. That is because the assessment of the risk of dissipation will not have been undertaken before; such a risk will not have been an issue in the adjudication, which will have been concerned solely with whether or to what extent the payer was liable to the payee.

A court subsequently considering whether there is a real risk of dissipation of assets so as to justify a stay is therefore undertaking the exercise for the first time, and must consider all the relevant evidence, regardless of whether or not it was or could have been raised in the adjudication. The use of the evidence to support an application for a stay is for a different purpose and does not amount to a collateral attack on the adjudicator's decision. The Court added that the cases where the extra principle is relevant to the granting of a stay are likely to be small, and the number of those where there may be an overlap between the evidence that was or could have been deployed in the adjudication, and the evidence justifying a stay on the grounds of risk of dissipation, will be fewer still.

Gosvenor London Ltd v Aygun Aluminium UK Ltd [2018] EWCA Civ 2695

4. Government bans combustible materials on high-rise buildings

New Regulations that came into force on 21 December 2018, ban combustible materials on the external walls of new buildings over 18 metres containing flats, as well as new hospitals, residential care premises, dormitories in boarding schools and student accommodation over 18 metres. Schools over 18 metres built as part of the government's centrally delivered build programmes will also not use combustible materials in the external wall.

And local authorities will receive the government's full backing, including financial support if necessary, to enable them to carry out emergency work on affected private residential buildings with unsafe ACM cladding. They will recover the costs from building owners.

The Secretary of State for Communities has said that building owners and developers must replace dangerous ACM cladding and the costs must not be passed on to leaseholders. Private building owners must pay for this work now or they should expect to pay more later.

https://www.gov.uk/government/news/ government-bans-combustible-materials-on-highrise-homes

https://www.gov.uk/government/publications/ building-amendment-regulations-2018- circular-022018

5. 2019 start for new government initiatives on social value in procurement, outsourcing and prompt payment

The government has announced that, by summer 2019, government procurements will be required to take social and economic benefits into account in certain priority areas. These include supporting small businesses, providing employment opportunities for disadvantaged people and reducing harm to the environment. Also from 2019, new complex outsourcing projects are to be piloted with suppliers before deciding to use the private sector.

Central government will shortly be publishing new data about the performance of critical contracts, such as response rates and if they are delivering on time. The government's Supplier Code of Conduct is to be reviewed and enhanced and the GovTech catalyst programme to ensure the best ideas and technologies are assessed quickly is to be scaled up, with plans to be published in Spring 2019.

The government has also announced that, from autumn 2019, companies providing services to the government that cannot demonstrate prompt payment to their suppliers could be prevented from winning government contracts.

See: https://www.gov.uk/government/news/newsocial-value-contracts-to-revolutionise-governmentprocurement and

https://www.gov.uk/government/news/ crack-down-on-suppliers-who-dont-pay-on-time

6. RIBA Professional Services Contracts 2018

The new RIBA Professional Services Contracts, which replace the old RIBA Agreement documents, have now been published and are available in digital format. They can be used for the provision of built environment consultancy services. The five contracts currently in the suite are:

  • RIBA Standard Professional Services Contract 2018: Architectural Services
  • RIBA Concise Professional Services Contract 2018: Architectural Services
  • RIBA Domestic Professional Services Contract 2018: Architectural Services
  • RIBA Principal Designer Professional Services Contract 2018
  • RIBA Sub-consultant Professional Services Contract 2018

See: https://www.ribabookshops.com/topic/ riba-professional-services-contracts/0401/

Visit us at mayerbrown.com

Mayer Brown is a global legal services provider comprising legal practices that are separate entities (the "Mayer Brown Practices"). The Mayer Brown Practices are: Mayer Brown LLP and Mayer Brown Europe – Brussels LLP, both limited liability partnerships established in Illinois USA; Mayer Brown International LLP, a limited liability partnership incorporated in England and Wales (authorized and regulated by the Solicitors Regulation Authority and registered in England and Wales number OC 303359); Mayer Brown, a SELAS established in France; Mayer Brown JSM, a Hong Kong partnership and its associated entities in Asia; and Tauil & Chequer Advogados, a Brazilian law partnership with which Mayer Brown is associated. "Mayer Brown" and the Mayer Brown logo are the trademarks of the Mayer Brown Practices in their respective jurisdictions.

© Copyright 2019. The Mayer Brown Practices. All rights reserved.

This Mayer Brown article provides information and comments on legal issues and developments of interest. The foregoing is not a comprehensive treatment of the subject matter covered and is not intended to provide legal advice. Readers should seek specific legal advice before taking any action with respect to the matters discussed herein.

To print this article, all you need is to be registered on Mondaq.com.

Click to Login as an existing user or Register so you can print this article.

Authors
 
In association with
Related Topics
 
Related Articles
 
Related Video
Up-coming Events Search
Tools
Print
Font Size:
Translation
Channels
Mondaq on Twitter
 
Mondaq Free Registration
Gain access to Mondaq global archive of over 375,000 articles covering 200 countries with a personalised News Alert and automatic login on this device.
Mondaq News Alert (some suggested topics and region)
Select Topics
Registration (please scroll down to set your data preferences)

Mondaq Ltd requires you to register and provide information that personally identifies you, including your content preferences, for three primary purposes (full details of Mondaq’s use of your personal data can be found in our Privacy and Cookies Notice):

  • To allow you to personalize the Mondaq websites you are visiting to show content ("Content") relevant to your interests.
  • To enable features such as password reminder, news alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our content providers ("Contributors") who contribute Content for free for your use.

Mondaq hopes that our registered users will support us in maintaining our free to view business model by consenting to our use of your personal data as described below.

Mondaq has a "free to view" business model. Our services are paid for by Contributors in exchange for Mondaq providing them with access to information about who accesses their content. Once personal data is transferred to our Contributors they become a data controller of this personal data. They use it to measure the response that their articles are receiving, as a form of market research. They may also use it to provide Mondaq users with information about their products and services.

Details of each Contributor to which your personal data will be transferred is clearly stated within the Content that you access. For full details of how this Contributor will use your personal data, you should review the Contributor’s own Privacy Notice.

Please indicate your preference below:

Yes, I am happy to support Mondaq in maintaining its free to view business model by agreeing to allow Mondaq to share my personal data with Contributors whose Content I access
No, I do not want Mondaq to share my personal data with Contributors

Also please let us know whether you are happy to receive communications promoting products and services offered by Mondaq:

Yes, I am happy to received promotional communications from Mondaq
No, please do not send me promotional communications from Mondaq
Terms & Conditions

Mondaq.com (the Website) is owned and managed by Mondaq Ltd (Mondaq). Mondaq grants you a non-exclusive, revocable licence to access the Website and associated services, such as the Mondaq News Alerts (Services), subject to and in consideration of your compliance with the following terms and conditions of use (Terms). Your use of the Website and/or Services constitutes your agreement to the Terms. Mondaq may terminate your use of the Website and Services if you are in breach of these Terms or if Mondaq decides to terminate the licence granted hereunder for any reason whatsoever.

Use of www.mondaq.com

To Use Mondaq.com you must be: eighteen (18) years old or over; legally capable of entering into binding contracts; and not in any way prohibited by the applicable law to enter into these Terms in the jurisdiction which you are currently located.

You may use the Website as an unregistered user, however, you are required to register as a user if you wish to read the full text of the Content or to receive the Services.

You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these Terms or with the prior written consent of Mondaq. You may not use electronic or other means to extract details or information from the Content. Nor shall you extract information about users or Contributors in order to offer them any services or products.

In your use of the Website and/or Services you shall: comply with all applicable laws, regulations, directives and legislations which apply to your Use of the Website and/or Services in whatever country you are physically located including without limitation any and all consumer law, export control laws and regulations; provide to us true, correct and accurate information and promptly inform us in the event that any information that you have provided to us changes or becomes inaccurate; notify Mondaq immediately of any circumstances where you have reason to believe that any Intellectual Property Rights or any other rights of any third party may have been infringed; co-operate with reasonable security or other checks or requests for information made by Mondaq from time to time; and at all times be fully liable for the breach of any of these Terms by a third party using your login details to access the Website and/or Services

however, you shall not: do anything likely to impair, interfere with or damage or cause harm or distress to any persons, or the network; do anything that will infringe any Intellectual Property Rights or other rights of Mondaq or any third party; or use the Website, Services and/or Content otherwise than in accordance with these Terms; use any trade marks or service marks of Mondaq or the Contributors, or do anything which may be seen to take unfair advantage of the reputation and goodwill of Mondaq or the Contributors, or the Website, Services and/or Content.

Mondaq reserves the right, in its sole discretion, to take any action that it deems necessary and appropriate in the event it considers that there is a breach or threatened breach of the Terms.

Mondaq’s Rights and Obligations

Unless otherwise expressly set out to the contrary, nothing in these Terms shall serve to transfer from Mondaq to you, any Intellectual Property Rights owned by and/or licensed to Mondaq and all rights, title and interest in and to such Intellectual Property Rights will remain exclusively with Mondaq and/or its licensors.

Mondaq shall use its reasonable endeavours to make the Website and Services available to you at all times, but we cannot guarantee an uninterrupted and fault free service.

Mondaq reserves the right to make changes to the services and/or the Website or part thereof, from time to time, and we may add, remove, modify and/or vary any elements of features and functionalities of the Website or the services.

Mondaq also reserves the right from time to time to monitor your Use of the Website and/or services.

Disclaimer

The Content is general information only. It is not intended to constitute legal advice or seek to be the complete and comprehensive statement of the law, nor is it intended to address your specific requirements or provide advice on which reliance should be placed. Mondaq and/or its Contributors and other suppliers make no representations about the suitability of the information contained in the Content for any purpose. All Content provided "as is" without warranty of any kind. Mondaq and/or its Contributors and other suppliers hereby exclude and disclaim all representations, warranties or guarantees with regard to the Content, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. To the maximum extent permitted by law, Mondaq expressly excludes all representations, warranties, obligations, and liabilities arising out of or in connection with all Content. In no event shall Mondaq and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use of the Content or performance of Mondaq’s Services.

General

Mondaq may alter or amend these Terms by amending them on the Website. By continuing to Use the Services and/or the Website after such amendment, you will be deemed to have accepted any amendment to these Terms.

These Terms shall be governed by and construed in accordance with the laws of England and Wales and you irrevocably submit to the exclusive jurisdiction of the courts of England and Wales to settle any dispute which may arise out of or in connection with these Terms. If you live outside the United Kingdom, English law shall apply only to the extent that English law shall not deprive you of any legal protection accorded in accordance with the law of the place where you are habitually resident ("Local Law"). In the event English law deprives you of any legal protection which is accorded to you under Local Law, then these terms shall be governed by Local Law and any dispute or claim arising out of or in connection with these Terms shall be subject to the non-exclusive jurisdiction of the courts where you are habitually resident.

You may print and keep a copy of these Terms, which form the entire agreement between you and Mondaq and supersede any other communications or advertising in respect of the Service and/or the Website.

No delay in exercising or non-exercise by you and/or Mondaq of any of its rights under or in connection with these Terms shall operate as a waiver or release of each of your or Mondaq’s right. Rather, any such waiver or release must be specifically granted in writing signed by the party granting it.

If any part of these Terms is held unenforceable, that part shall be enforced to the maximum extent permissible so as to give effect to the intent of the parties, and the Terms shall continue in full force and effect.

Mondaq shall not incur any liability to you on account of any loss or damage resulting from any delay or failure to perform all or any part of these Terms if such delay or failure is caused, in whole or in part, by events, occurrences, or causes beyond the control of Mondaq. Such events, occurrences or causes will include, without limitation, acts of God, strikes, lockouts, server and network failure, riots, acts of war, earthquakes, fire and explosions.

By clicking Register you state you have read and agree to our Terms and Conditions