Not all Collateral Warranties are Construction Contracts

By Matthew Friedlander and Tanya Chadha

The contractual matrix of commercial construction projects commonly includes collateral warranties.  Collateral warranties typically grant a contractual cause of action to third parties (such as tenants or end-users) with an interest in the project who may not otherwise have a contract in place with parties that are designing, constructing or providing professional advice on the project.   For the beneficiary, a collateral warranty can therefore be invaluable.

Recently, for example, collateral warranties have proven to be extremely useful for long leaseholders and tenants in private residential developments where cladding and fire safety issues have been discovered.  Where such a warranty exists, leaseholders (as the beneficiaries) have been able in some cases to rely upon collateral warranties as a means of recovering losses, or compelling the original contractors or designers to rectify those fire safety defects in circumstances where the leaseholder was not involved in the original construction of the development.

Continue reading “Not all Collateral Warranties are Construction Contracts”

GSEL v Sudlows: Adjudication enforcement, natural justice and challenging a decision

Introduction

Adjudication can be a frustrating experience, particularly for those who have been faced with a decision of the adjudicator that is quite obviously (to you) wrong, but nonetheless enforceable.

This situation arises because it has long been accepted that, in adjudication, “the need to have the “right” answer has been subordinated to the need to have an answer quickly…” per Chadwick LJ in Carillion v Devonport Royal Dockyard [2005] EWCA 1358.

The Court’s stance on this issue is born from the original intent of the statutory scheme, which was to provide a means for contractors and subcontractors to address cash-flow problems caused by illegitimate delays or refusals to pay. In order to achieve that, adjudication decisions have to bear the weight of authority, otherwise every adjudication decision would immediately be challenged by the losing party.

The Courts also take into account the fact that the adjudicator is tasked with deciding often very complex and detailed disputes in a very short period of time. Errors in decision-making from time to time are therefore inevitable, but the Courts have determined that that shouldn’t be allowed to undermine the process.

Continue reading “GSEL v Sudlows: Adjudication enforcement, natural justice and challenging a decision”

Aqua v. Benchmark: How Not to Settle a Dispute

By Steve Nichol and Matthew Friedlander

In its latest offering, “CLC COVID-19 Claims and Disputes in Construction” the Construction Leadership Council (CLC) predicts that disputes related to COVID-19 are set to rise in 2021. While the optimist may hope that parties will continue to or aim to work collaboratively in order to find workable commercial solutions to claims arising from the global pandemic, the realist knows that such disputes are inevitable. Continue reading “Aqua v. Benchmark: How Not to Settle a Dispute”

Wasn’t It Obvious? The Curious Case of ABC v. Network Rail

By Steve Nichol and Matthew Friedlander

At first glance, the Court of Appeal’s recent decision in ABC Electrification Ltd v Network Rail Infrastructure Ltd [2020] EWCA Civ 1645 might look like the culmination of an exercise in legal hubris. This was, after all, a case focussed on the meaning of a single word in a contract; moreover, a word – “default” – that most of us in the legal profession might say has a well-established meaning.

And, after several hundred thousand pounds of legal fees no doubt well spent, the Court of Appeal told the world that the word “default” means exactly what we all thought it meant – a failure to fulfil an obligation. Continue reading “Wasn’t It Obvious? The Curious Case of ABC v. Network Rail”

UK construction & Engineering: Practice and procedure: Pre-action disclosure

By Vijay Bange and Matthew Friedlander

Please Sir may I have some more…

Requests by a party for disclosure of further documents is often a vexed issue, and the motives may in some instances be tactical, and inevitably it’s a costly affair. Recently, its been reported that the insurers for HCC International Insurance Company, PLC in its dispute with Roc Nation LLC (Rapper Jay-Z’s management company), has sought a motion before a New York federal judge seeking disclosure of documents from a UK Broker, and which will entail the discovery requests to be ultimately pursued via the process in the UK courts. Roc Nation has alleged that this is an attempt to “kick the can farther down the road[1], and is objecting to the motion. Continue reading “UK construction & Engineering: Practice and procedure: Pre-action disclosure”

Remobilising UK Construction needs Guarantees, not Guesswork- Part 2

By Steve Nichol and Matthew Friedlander 

Last week we discussed, in light of the encouragement from Robert Jenrick MP (Secretary of State for Housing, Communities and Local Government) for the construction industry to remobilise, the government’s apparent reluctance to provide confidence and clarity for the construction industry in respect of the safe operation of sites.

In the Prime Minister’s address to the nation on 10 May 2020, he re-stated that encouragement for the construction industry, where possible, to return to work. Continue reading “Remobilising UK Construction needs Guarantees, not Guesswork- Part 2”

Remobilising UK Construction needs Guarantees, not Guesswork

By Steve Nichol and Matthew Friedlander

In yesterday’s edition of the Government’s daily coronavirus briefing, Robert Jenrick MP (Secretary of State for Housing, Communities and Local Government) relayed tales of how some local authorities have been able to continue essential fire safety work in the COVID-19 era in order to address defective and dangerous cladding in their areas.  He then went on to say:

I would urge any building owner or contractor…as soon as practicable, where it’s safe, to begin work once again.

If Mr Jenrick envisioned this statement as a call to arms for the industry to remobilise in a flurry of activity, it is likely that he will be disappointed. Continue reading “Remobilising UK Construction needs Guarantees, not Guesswork”