ARTICLE
12 September 2024

Construction & Engineering - Horizon Scanner: Infrastructure, Construction, Energy, September 2024

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Arthur Cox

Contributor

Arthur Cox is one of Ireland’s leading law firms. For almost 100 years, we have been at the forefront of developments in the legal profession in Ireland. Our practice encompasses all aspects of corporate and business law. The firm has offices in Dublin, Belfast, London, New York and Silicon Valley.
In the UK case of Providence Building Services Ltd v Hexagon Housing Association Ltd, the Court of Appeal affirmed a contractor's right to terminate a JCT contract immediately for repeated specified defaults. JCT's 2024 updates include provisions for electronic notices, gender-neutral language, and climate considerations.
Ireland Real Estate and Construction

STANDARD FORM CONTRACTS

JCT: Contractors' Termination Rights

In the UK case of Providence Building Services Ltd v Hexagon Housing Association Ltd [2024] EWCA Civ 962, a JCT contract clause gave the contractor an immediate right to terminate if the employer repeated a specified default. The Court of Appeal in England and Wales ruled that the contractor was entitled to terminate immediately for a repeated specified default, even though a right to terminate had not arisen from the first specified default (because the employer had remedied the first specified default in time). Read more in our briefing here: Contractors' Termination Rights under JCT Contracts

JCT

The JCT's 2024 editions of its Standard Building Contract and collateral warranty suite are now available. JCT indicates that key changes include:

  • amendments to provide for electronic communications for most notices,
  • streamlining notification procedures in extension of time provisions,
  • addition of a Relevant Event to cover epidemics,
  • use of gender-neutral language,
  • provisions relating to legislative changes in the UK, and
  • increased alignment with the Construction Playbook, including bringing three previous supplementary provisions into the standard form: collaborative working, sustainable development and environmental consideration, and notification and negotiation of disputes.

JCT also announced the publication this month of the 2024 edition of its Consultancy and Pre-Construction Services Agreements.

In Ireland, we understand that work on the revised RIAI form of Contract is well progressed, and we will provide further updates as soon as they become available.

NEC 4

Three new guidance notes are available: (i) Comparison of the NEC4 Term Service Short Contract (TSSC) with the Term Service Contract (TSC); (ii) Including climate change requirements in the NEC4 Facilities Management Contract (FMC); and Plans and Programmes in the FMC.

LEGISLATION

Screening of Third Country Transactions

The Screening of Third Country Transactions Act 2023 will be commenced in the second half of Q4 of 2024, and guidance will be finalised before commencement. Updated information has been made available by DETE here and here.

The Act sets out a framework to enable the Minister for Enterprise, Trade and Employment to review transactions involving foreign investment that may impact on security or public order in Ireland. The Act covers any transaction, acquisition, agreement or other economic activity resulting in a change of control of an asset in Ireland or the acquisition of all or part of any interest in an undertaking in Ireland. Such transactions are notifiable if they meet several criteria. One of the criteria is that the transaction relates to, or impacts upon, a relevant matter. Relevant matters include critical infrastructure (including energy, transport, water, health, communications, media, data processing or storage, aerospace, defence, electoral or financial infrastructure and sensitive facilities, including the land/real estate used crucial for the use of such infrastructure), as well as supply of critical inputs (including energy or raw materials).

Parties to a notifiable transaction are required to submit a notification to the Minister at least 10 days prior to the completion of the transaction. For further information, our briefing on the Act is available here: An Overview of the Upcoming Foreign Investment Screening Regime in Ireland.

SUSTAINABILITY

Cement

We previously mentioned that public bodies would receive new guidance relating to the design of projects and procurement of cement and concrete products, with the intent of achieving a consistent approach to reducing embedded carbon in construction.

Taking account of actions in the Climate Action Plan, the inter-departmental Cement and Construction Sector Decarbonisation Working Group considers that projects commencing design from 1 September 2024 are required, at a minimum, to follow certain standards and practices, described here. Extracts are set out below:

  1. Public bodies should be guided by best-practice carbon management design approaches, including avoidance of over-specification of materials, when undertaking or procuring construction projects.
  2. Concrete products procured by public bodies, or used in publicly produced construction projects, including poured or pre-cast products, should in general specify a minimum of 30% clinker replacement, consistent with IS EN 206 ....
  3. High-carbon CEM I cement products should not be procured by public bodies, or used in publicly produced construction projects...
  4. Public bodies should seek an Environmental Product Declaration, to an EN 15804 standard, or equivalent when directly procuring cement or concrete products. Confirmation of a similar disclosure should be sought by public bodies, where a contracted party is managing materials procurement. When available, public bodies should require a Declaration of Performance and Compliance under the Construction Product Regulation.
  5. From 1 September 2025, public bodies that are commencing design for new buildings for projects in receipt of exchequer funding in excess of €10 million in the case of non-residential buildings, or in excess of €60 million in the case of residential buildings, should produce or procure a Whole Life-Cycle Greenhouse Gas Emissions assessment in accordance technical guidance to be provided by SEAI in 2025, consistent with the Energy Performance of Buildings Directive. Subject to a review of the first step, from 1 June 2026, projects in receipt of exchequer funding in excess of €5 million in the case of non-residential buildings, or in excess of €30 million in the case of residential buildings, should produce such an assessment. Projects below this scale should also consider implementing this assessment.
  6. Public bodies procuring infrastructure projects (construction other than buildings) in receipt of exchequer funding in excess of €60 million, should produce or procure a Whole Life-Cycle Greenhouse Gas Emissions assessment for their project. From 1 January 2026, projects in receipt of exchequer funding in excess of €10 million should produce such an assessment. Public bodies should identify the most appropriate, available methodology to ensure that the project's embodied carbon is suitably interrogated, and applicable to the infrastructure or project-type. Projects below this scale should also consider implementing this assessment. Data produced for Building Information Modelling (BIM), introduced under the Capital Works Management Framework can, in most cases, also be used to produce this assessment.

BREXIT

CE Markings

In the UK, the Construction Leadership Council published a response to the Independent Review of the Construction Product Testing Regime in which it favoured conformity with EU testing in light of the imminent revision of the EU Construction Products Regulation. It called for indefinite postponement of the introduction of UKCA markings in the construction sector, in favour of continued use of CE markings.

This article contains a general summary of developments and is not a complete or definitive statement of the law. Specific legal advice should be obtained where appropriate.

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