ADJUDICATION
See Balfour Beatty Construction Northern v Modus Corovest under Keating Chambers Reported Cases on enforcement of adjudication and attempts to set-off a cross-claim.
See Air Design (Kent) v Deerglen (Jersey) under Keating Chambers Reported Cases on an adjudicator's jurisdiction to decide how many contracts the parties had made.
See Avoncroft Construction v Sharba Homes under Keating Chambers Reported Cases on contractual defence to liquidated damages based on partial possession, set-off and validity of withholding notice.
See Euro Construction Scaffolding v SLLB Construction under Keating Chambers Reported Cases on adjudicator's jurisdiction to decide on his jurisdiction.
Electronic Communication Of Decision
CSC Braehead Leisure Ltd v Laing O-Rourke Scotland Ltd [2009] BLR 49 Court of Session Outer House
The Scottish Court upheld as valid the transmission by e-mail of an adjudicator's decision within the extended time limit granted to him, even though there was no signature. Difficulty was created by the adjudicator's expression of the decision as 'interim', a practice criticised by the BLR Editors, but the court held that it was, properly construed, not an interim decision, because it decided liability and addressed quantum.
See Dalkia Energy & Technical Services v Bell Group under Keating Chambers Reported Cases on jurisdiction to rule on incorporation of standard terms in Part 8 proceedings.
ARBITRATION AND DISPUTE RESOLUTION
Multi-Tier Dispute Resolution
Ardentia Ltd v British Telecommunications plc [2008] 119 Con LR 50 Ch. Div.
This is on IT, rather than construction, but is of interest as "one of the few decisions concerning dispute resolution escalation clauses" as the Con LR editors describe it. It arose from a software licensing dispute. The agreement contained dispute resolution provisions with escalating stages from (i) notice in writing of a dispute (ii) meeting of representatives (iii) meeting at CEO level and (iv) consideration of mediation. However, there was an exception allowing the parties to seek interim injunctions. The court held that such an application would not entitle the court to deal with the substantive issues and Ardentia could not give a notice of intention to commence proceedings until the escalating states had been exhausted.
See Taylor Woodrow v RMD Kwikform under Keating Chambers Reported Cases on whether arbitration has been validly commenced by a letter from the claimant.
Arbitration Clause Unfair
Mylcrist Builders Ltd v Buck [2008] BLM Vol. 26 No. 1 TCC
Already reported in BLR, the builders' standard terms of contract contained an arbitration clause and they proposed to refer a payment dispute to arbitration. The client, an individual owner-occupier, succeeded in her argument (appearing in person) that the clause was unfair pursuant to the Unfair Terms in Consumer Contracts Regulations 1999. The builders failed in their argument that they had achieved a valid appointment of an arbitrator under s.17 Arbitration Act when the other party refused to appoint; this was held only to apply to parties each appointing an arbitrator and not to a sole arbitrator.
Public Policy Challenge Fails
R v V [2008] 119 Con LR 73 Commercial Court
In an arbitration arising from an agreement for the provision of consultancy services in the Libyan oil industry, the arbitrators gave an award in favour of V, the claimant. It was an ICC arbitration in London under English law. The defendant sought to challenge the award under s.68 of the Arbitration Act and under s.81(1)(c) as contrary to public policy. Following Lesotho Highlands Development Authority v Impregilo, the court held that s.68 could not be used to circumvent the restrictions on the court's power of intervention, while s.81 was not applicable, since the agreement was neither contrary to the Libyan Penal Code nor to English public policy.
No Costs For Invalid Arbitration
Crest Nicholson (Eastern) Ltd v Western [2008] 119 Con LR 18 TCC
Already reported in BLR, in a dispute over the NHBC Buildmark scheme, the court held that an arbitrator who had heard submissions from both parties had no jurisdiction, because there was no arbitration clause in the Buildmark policy. On the question as to whether the court could award costs for an invalid arbitration, it was held that there was no clear statutory power to do so and so the court could not make such an award.
See Cubitt Building & Interiors v Richardson Roofing (Industrial) under Keating Chambers Reported Cases on refusal of stay of arbitration pending adjudication.
Journal of International Arbitration Vol. 25 No. 6 December 2008
Is a special issue celebrating the 50th anniversary of the New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards. It contains articles on the United States, Canada, Europe, Central Asia, Asia, Nigeria and Australia/ New Zealand.
Recent Research
Dame Hazel Genn of UCL, in her December 2008 Hamlyn Lecture, criticises tendencies to ignore 'justice' in promotion of mediation: "just about settlement rather than about just settlement." and accuses ADR professionals of greater interest in large-scale commercial disputes.
University of Westminster report on Direct Access, finds a 89% satisfaction rating among clients directly instructing barristers.
The Bar is organising promotional events to get this message across and encourage use of Public Access to the Bar.
Construction Law Vol 20 Issue 1 January 2009
contains the following articles:
Insurers, subrogation and costs
by Bevan Farmer, Shadbolt & Co.
Quick on the draw by Paul Newman, 3 Paper
Buildings (on pre-action protocol compliance)
Of Johnny Halliday and chocolate teapots
by John Sheils, Shadbolt & Co. (on CEDR
mediation/adjudication process)
CONTRACT AND PROCUREMENT LAW
International Construction Law Review Vol. 26 No. 1
January 2009
contains the following articles:
The four criteria of risk allocation in construction
contracts
by Nael Bunni
Relationship between FIDIC Conditions and public
procurement law – reliability of tender documents
by Götz-Sebastian Hök, Hök, Stieglmeier
& Collegen, Berlin
OGC Contracts Of Choice
JCT News Release 2 January 2009
The JCT has announced that the review by Arup concluded in late 2008 for the Office of Government Commerce (OGC) has found that three contract forms now satisfy the principles of the OGC Achieving Excellence in Construction. As well as NEC 3, identified in 2005 as OGC contract of choice, the JCT Constructing Excellence Contract (JCT-CE) and the ACA's PPC 2000 (given a 2008 're-launch') do so. The Arup review noted expressly that "Each contract (of the 3) satisfies OGC's Evaluation Criteria". These relate to encouragement of collaborative working, good management, performance and dispute resolution.
See Diamond Build v Clapham Park Homes under Keating Chambers Reported Cases on the contractual effect of a letter of intent.
Use Of Sub-Criteria And Marking Unlawful
Letting International Ltd v London Borough of Newham [2008] 119 Con LR 89 QBD
NB that the claimant is reported elsewhere as 'Lettings'.
Lettings, the unsuccessful tenderers for two framework agreements covering procurement, maintenance and management of dwellings for Newham, succeeded in their challenge of the tendering and award process. After first obtaining an injunction (upheld at [2007] EWCA Civ. 1522) to stop the award, at the trial they established breach of the Public Contracts Regulations 2006 by Newham. Newham had failed adequately to disclose its award criteria and weightings in advance and specifically had used sub-criteria which were not disclosed, and which were not mere scoring machinery, as Newham tried to contend. Newham had also failed to be transparent in its scoring, offering only three out of five for fully meeting a criterion and reserving the remaining two marks for those who exceeded it. Some, although not all, of the 'manifest errors' in marking were also held to be established. The recent decision of the ECJ in Lianakis v Dimas Alexandroupolis was applied.
Public Contracts Regulations Breach
McLaughlin & Harvey Ltd v Department of Finance and Personnel (No. 3) [2008] CILL 2653 QBD (N1)
As reported in CILL, the court held that the provision of additional criteria and weightings after tenders had been submitted was a breach of Regulation 47 of the Public Contracts Regulations 2006. This hearing was to decide on the appropriate remedy for a tenderer which had not been given a place in a proposed framework agreement. The court's decision was that the award of places to other tenderers could not stand and should be set aside. It would then be a matter for the client (the Department) if it wished to persist with the framework agreement method of procurement.
Construction Law Vol 20 Issue 1 January 2009
contains the following articles:
Termination of contract
by Michael Phipps, Thurston Consultants (on JCT 2005).
Funders and distressed projects
by Lindy Patterson, Dundas & Wilson.
Who is a sub-contractor under the NEC?
by Tim McGoldrick, Driver Consult
Insuring against insolvency
by John D. Wright, JD Risk Associates.
The road to hell ... (on letters of
intent)
by Tony Dymond and Matthew Walker, Herbert Smith.
JCT Pre-Construction Contract
JCT has announced the launch of its Pre-Construction Services Agreements, for appointment of contractor and specialists respectively, for use up to second stage tender and award of contracts for construction phase. These are intended for use with JCT 2005.
CONSTRUCTION AND ENGINEERING CONTRACT DISPUTES LAW
See Steria v Sigma Wireless Communications under Keating Chambers Reported Cases on time bars/conditions precedent and concurrency.
See Tyco Fire & Integrated Solutions v Rolls Royce Motor Cars under Keating Chambers Reported Cases on contractual requirements for joint names insurance for specified perils.
See Fitzpatrick Contractors v Tyco Fire & Integrated Solutions under Keating Chambers Reported Cases on interpretation of the scope of a quantum cap in a sub-contract.
See AE Yates Trenchless Solutions v Black & Veatch under Keating Chambers Reported Cases on an IChemE Brown Book 'battle of forms'.
International Construction Law Review Vol. 26 No. 1
January 2009
contains the following articles:
Can prevention be cured by time bars?
by Doug Jones, Clayton Utz, Sydney
Concurrent causation in construction claims
by Franco Mastrandrea
The development of a case law in construction disputes
relating to FIDIC contracts
by Christopher Seppala, White & Case, Paris
See London & Regional (St. George's Court) v Ministry of Defence under Keating Chambers Reported Cases on whether disputed claims had been certified and on no-loss argument.
Liquidated Damages
Liberty Mercian Ltd v Dean & Dyball Construction Ltd [2008] CILL 2648 and [2009] BLR 29 TCC
The TCC upheld a sectional completion agreement used with JCT 98 sectional completion amendments despite a discrepancy between 'date for completion' and 'date of completion' which the contractor said made it void for uncertainty, thus setting time at large. The liquidated damages provisions were not a penalty as both parties recognised the effect of delay in the first section on the subsequent sections of the work, even though this had not been made explicit. The contractor was not entitled to an extension of time for its delay.
See Reinwood v L Brown & Sons under Keating Chambers Reported Cases for the CA's decision on the contractor's entitlement to rely on notice of default in termination, subsequent to HL decision on validity of notice of default.
GENERAL AND PROFESSIONAL NEGLIGENCE
Breach Of Party Wall Procedure
Hough v Annear [2008] 119 Con LR 57 County Court
Failure to comply with s.3 of the Party Wall Act during the construction of an extension did not constitute a separate cause of action for breach of statutory duty.
Liability For Results Of Fire
Biffa Waste Services Ltd v Maschinenfabrik Ernst Hese [2008] 118 Con LR and [2008] BLM Vol. 26 No. 1 TCC
Already reported in BLM, following a fire at a domestic waste plant, Biffa, who were engaged under a PFI contract to collect and recycle waste, sued parties engaged in the construction of the plant in contract and tort. The main points of interest in the tortious claims are the scope of vicarious liability for the actions of non-employees and the scope of the non-delegable duty placed upon an employer who has employed another to discharge his extra-hazardous obligations. The contractual claims required consideration of the role of the liquidated damages clause in limiting liability of the party in breach and the avoidance of double recovery.
See now CA reversal of this decision in this section.
Damages For Wasted Expenditure
Funnell v Adams & Remer [2008] 119 Con LR 193 QBD
Already reported in BLR, the claimant landscape gardeners sued their solicitors for failing to identify clauses in a lease obliging them to undertake works the value of which would then be reflected in the rent review. The claimants managed to extricate themselves from the lease and claimed the cost of doing so and the loss sustained by embarking on a venture then aborted at an early stage. The defendants, though admitting negligence, denied liability for the losses. The judge, considering SAAMCO v York Montague (Vincent Moran), held that the conventional approach of measuring the value of the lease with and without the offending provisions might be displaced in a particular case. The act of extricating oneself from a predicament did not necessarily break the chain of causation and here the cost of doing so should be recoverable, as should the costs wasted by embarking on an abortive venture.
CA Vicarious Liability Reversal
Biffa Waste Services Ltd v Maschinen Fabrik Ernst
Hese [2009] BLR 1 CA
The CA reversed the TCC's findings on the scope of
vicarious liability for the actions of non-employees. The TCC had
been wrong to equate 'supervision' with 'control'.
The case arose out of a fire at a domestic waste plant, following
welding works carried out by non-employees of the defendants.
PRACTICE AND PROCEDURE
See Multiplex Constructions v Cleveland Bridge (No. 2) under Keating Chambers Reported Cases on interest on interim costs and determination of costs.
Costs For Failure To Comply With Protocol
TJ Brent Ltd v Black & Veatch [2008] 119 Con LR 1 TCC
Already reported in BLM, a claim had been made by the employers against the claimant contractors and the contractors had commenced proceedings against the defendant engineers, who denied all liability and refused to attend meetings to discuss the matter. The employers' claim was settled by the claimant, who now sought a contribution from the defendant under the Civil Liability Construction Act. The defendant made an application for costs against the claimant for non-compliance with the Pre-Action Protocol. The application was refused; any non-compliance was technical and the application was intended to secure a tactical advantage.
Limitation Period For Negligent Advice
Watkins v Jones Maidment Wilson [2008] 118 Con LR 1 CA
The claimants, the clients, alleged that their solicitors, the defendants had given negligent advice in entering into agreements for the construction of a house. The Court of Appeal, dismissing the claimants' appeal, held that the claimants had suffered loss as soon as the advice was given and acted upon, even though the extent of the loss was not clear until later.
Unreasonableness In Mediation
Earl of Malmesbury v Strutt & Parker [2008] 118 Con LR 68 QBD
After the claimants had succeeded on liability in a negligent valuation case, the parties went to mediation on quantum. The claimant offered to accept £9 million and was ultimately awarded £900,000. The court held the claimant's position to have been unreasonable, causing the mediation to fail. Unreasonableness in mediation could be treated as placing a party in the same position as someone refusing to go to mediation. The claimants' costs were £1.84 million but their unreasonableness was reflected in the costs order, giving them 80% on liability and 70% on quantum. The Con LR editors note that "This appears to be the first case in which a court has been asked to consider the costs consequences in the situation where a party has agreed to mediate but has then taken an unreasonable position in the mediation".
False Evidence
KJM Superbikes Ltd v Hinton [2008] CILL 2645 CA
The CA held that the only factor for a court to take into account in deciding whether to allow an action to be brought for contempt of court was whether it was in the public interest. The CA allowed an appeal by the applicant, who had sought to bring proceedings for contempt against a witness who had admitted giving false evidence in a trademark dispute. The judge had ruled this to be a contempt but had said that it would be disproportionate to allow KJM's application. The CA held that the judge had not given the contempt sufficient weight.
KEATING CHAMBERS REPORTED CASES
Taylor Woodrow Construction v RMD Kwikform [2008] 118 Con LR TCC
Already reported in BLR, following collapse of scaffolding
provided by the defendant, the claimant's solicitors sent a
letter noting that the contract contained provision for arbitration
and asking whether the defendant would rely on that or would agree
to participate in litigation. The claimant then obtained unilateral
appointment of an arbitrator by the President of the Chartered
Institute of Arbitrators. The court accepted the defendant's
contention that there had been no valid reference and so no
commencement of the arbitration. The arbitrator was thus not
validly appointed. The claimant's letter had not been
objectively clear and was thus not sufficient to commence
proceedings.
David Thomas QC
Richard Coplin
Diamond Build Ltd v Clapham Park Homes Ltd [2008] 119 Con LR 18 TCC
Already reported in CILL, a letter of intent for a refurbishment
project was held to have given rise to a simple contract with all
the necessary elements, to cover the period until a formal contract
could be entered into. The claimant successfully contended that the
contract was based on the (JCT) standard form referred to in the
specification.
Marc Rowlands
AE Yates Trenchless Solutions Ltd v Black & Veatch Ltd [2008] EWHC 3183 TCC LAWTEL
In a 'battle of the forms' case, it was held that the
terms and conditions of the IChemE Brown Book form of sub-contract
(2nd ed. 2004) took precedence over the contents of the
terms and conditions of the sub-contractor's quotation, where
the two conflicted. The defendant contractor obtained declarations
to this effect against the claimant sub-contractor.
Rosemary Jackson QC
Marcus Taverner QC
Euro Construction Scaffolding Ltd v SLLB Construction Ltd [2008] EWHC 3160 TCC Lawtel
Although the parties had not agreed that the adjudicator had
power to rule on his own jurisdiction, he did have jurisdiction and
therefore could decide the claim referred. His decision based on
the quotation, which constituted the writing for s.107 purposes was
therefore enforceable.
Jessica Stephens
Jonathan Selby
Tyco Fire and Integrated Solutions (UK) Ltd v Rolls Royce Motor Cars Ltd [2008] 118 Con LR 25 CA
Already reported in BLR, the Court of Appeal reversed the
finding of the TCC. The claimant contractor agreed to provide a
fire protection system under a design and build contract at the
premises of the defendant client. The contract required the client
to take out joint names insurance in respect of specified perils,
which was not done. When water from the mains flooded the
client's premises, the client obtained damages in adjudication.
The first instance court, applying CRS v Taylor
Young, held that the parties had provided
contractually for dealing with damage caused by specified perils,
so that the joint names insurance was the fund to which both
parties should be able to look. The CA, in upholding the
employer's appeal, distinguished the
CRS case.
David Thomas QC
Krista Lee
Steria Ltd v Sigma Wireless Communications Ltd [2008] 118 Con LR 177 TCC
Already reported in BLR, the case derives from the provision of
a new computerised system for the fire and ambulance services in
the Republic of Ireland. One important aspect is the time
bar/condition precedent issue, but the judgment also contains
important discussion of concurrent delay, apparently endorsing the
approach in Malmaison (Finola
O'Farrell QC) and in Keating 8th edition
and the prevention principle analysis of Jackson J in
Multiplex Constructions v Honeywell Control Systems
(No. 2) (David Thomas QC and
Marc Rowlands).
Simon Hargreaves
Avoncroft Construction Ltd v Sharba Homes (CN) Ltd [2008] 119 Con LR 130 TCC
Already reported in TCLR. Note that different reports refer to
'Sharba' and 'Charba'. This covers the issue of
entitlement to stay enforcement of an adjudicator's decision
due to the claimant's financial position. It also deals with
the contractor's contractual defence to a claim for liquidated
damages and the employer's set-off rights and the invalidity of
a withholding notice served out of time. The contractor's
defence was based on a partial possession argument.
James Thompson
Fitzpatrick Contractors Ltd v Tyco Fire and Integrated Solutions (UK) Ltd [2008] 119 Con LR 155 TCC
The court had to consider the effect of a quantum cap in a
sub-contract and whether it protected the sub-contractor. It was
construed as being concerned with the liability of the claimant to
third parties and was not a provision which would limit the
sub-contractor's liability to the main contractor for breach of
the sub-contract.
David Thomas QC
Jonathan Lee
Cubitt Building & Interiors Ltd v Richardson Roofing (Industrial) Ltd [2008] 119 Con LR 137 TCC
Already reported in BLR, in refusing the claimant's
application for a stay of arbitration pending adjudication, the
court emphasised that whether there should be a stay during the
arbitration was entirely a matter for the arbitrator's
discretion. There is no obligation, either under the DOM/1
conditions incorporated into the sub-contract or under the HGCR
Act, to refer a dispute to adjudication, but a party can do so at
any time. If involved in arbitration, application would be made for
relief which could be built into the arbitration timetable if the
arbitrator thinks fit because applying the overriding objective, it
involves a prospect of resolution. However, an order for a stay
should not be granted if it would prevent expeditious resolution by
arbitration (or litigation) already commenced.
Gaynor Chambers
Balfour Beatty Construction Northern Ltd v Modus Corovest (Blackpool) Ltd [2008] BLM Vol. 26 No. 1 TCC
The contractor obtained summary judgment to enforce an
adjudicator's decision in its favour against the respondent
owner. The owner failed in attempts to obtain summary judgment for
liquidated damages and to set off that claim against the sums owed
to the contractor under the adjudication decision.
Stephen Furst QC
Piers Stansfield
Air Design (Kent) Ltd v Deerglen (Jersey) Ltd [2008] BLM Vol. 26 No. 1 TCC
The claimant sub-contractor succeeded in enforcing the decision
of an adjudicator against the defendant main contractor. The main
contractor had argued that there were disputes under at least 3
sub-contracts, which did not all have adjudication provisions, so
that the adjudicator had no jurisdiction. The court held that the
adjudicator was entitled to decide the question as to whether there
was more than one contract or one varied by agreement, which he had
done.
Gaynor Chambers
Multiplex Constructions (UK) Ltd v Cleveland Bridge UK Ltd (No. 2) [2008] 118 Con LR 16 CA
This is a Court of Appeal decision on costs in relation to the
temporary works element of the Wembley Stadium steel sub-contract.
The CA held that it had jurisdiction to award interest on an
interim payment of costs which had to be repaid following reversal
of a first instance decision on appeal. The court determined that
Multiplex as the winning party should have 50% of its costs; a
short point won by Cleveland Bridge had greater financial effect,
but time spent by the court is a very significant factor.
Paul Buckingham
Adrian Williamson QC
Lucy Garrett
London & Regional (St. George's Court) Ltd v Ministry of Defence [2008] CILL 2651 and [2009] BLR 20 CA
This is the appeal against the TCC decision. The case concerned
preliminary issues in a dispute arising from the refurbishment of
offices owned by the Crown Estate and let to the claimant, who had
sub-let to the defendant Ministry. The claimant had undertaken to
do the works and issues arose as to whether variations required by
the defendant had been certified by the claimant's consultants
as a binding determination of the defendant's liability and
whether the claimant had suffered any recoverable loss and/or was
entitled to pursue the claim. The decision of the CA was that the
existence of certificates was not a condition precedent to payment,
nor were the certificates conclusive of the parties' rights. A
settlement agreement did not prevent the claimant from bringing its
claim.
Paul Darling QC
Reinwood Ltd v L Brown & Sons Ltd [2009] BLR 37 CA
This is a significant sequel to the litigation which culminated
in the House of Lords decision at [2007] BLR 305 upholding the
employer's right to deduct LADs. Here the Court of Appeal
upheld the TCC in finding that the contractor was entitled to rely
on a notice of default in claiming entitlement to repudiate the
contract, even though the default notice was not mentioned in the
notice of determination.
Stephen Furst QC
John Marrin QC
Dalkia Energy & Technical Services Ltd v Bell Group Ltd [2009] EWHC 73 LAWTEL TCC
An adjudicator's decision on whether the defendant
sub-contractor's terms and conditions were validly incorporated
into the sub-contract was part of the dispute referred to him and
thus not normally a matter for the court to interfere with on
enforcement. However, in Part 8 proceedings, the court would have
jurisdiction to decide this matter and held that the standard terms
were so incorporated.
Calum Lamont
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