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Construction Foundations newsletter - January 2016
- United Kingdom
- Europe
- Construction and engineering - Foundations
17-01-2016
Welcome to Foundations, our construction and engineering monthly newsletter. Foundations will update you with details of what we think are the top three court cases decided in the previous month, a summary of important legislation changes or proposals, and a paper providing insight and guidance on a particular area of construction law and practice in the UK (UK insight) and internationally (International Insight). We hope you find our newsletter useful and informative.
International insight
A guide to adjudication in continental Europe
Construction contracts in Europe are usually based on the Civil Code provisions for construction work, with additional General Terms and Conditions. These provide only rudimentary legal regulations for adjudication proceedings, which are in essence summary procedures, decided by a pre-determined adjudicator. This is in contrast to the law in England where adjudication is a compulsory form of dispute resolution for any construction contract.
Read the full article
UK insight
Construction and engineering contracts are becoming increasingly international. Consequently entering into contracts with a party based in a different country/jurisdiction is not uncommon.
A considerable amount of time, money and effort is expended in the negotiation of contracts. However, some of the fundamental principles of English Law will not necessarily apply when contracting with a counterparty from a different jurisdiction which can result in exposing at least one of the parties to unfamiliar legal systems and risk some of which have been highlighted in a couple of cases that came before the Court of Appeal in 2015.
Top 3 cases
RMP Construction Services Ltd v Chalcroft Ltd [2015] EWHC 3737 (TCC) (21 December 2015)
Prior to 1 October 2011, the adjudication and payment regime in the Construction Act applied to written construction contracts only. This changed on 1 October 2011. Adjudicators can now be asked to investigate the terms of an oral contract, an exercise which arguably, due to the quick nature of an adjudication, adjudicators are inadequately placed to carry out. When combined with the established principal that an adjudicator's decision will be binding even if wrong, unless subsequently challenged in arbitration or litigation, it is therefore, all the more important now to ensure that the terms of a construction contract are clearly recorded in writing.
This is exactly what happened in this action for summary judgement in front of Stuart-Smith J in the Technology and Construction Court.
Persimmon Homes Ltd and others v Ove Arup & Partners Ltd and another [2015] EWHC 3573 (TCC) (7 December 2015)
In the second December judgement in our Foundations Update from Mr Justice Stuart-Smith, the court reiterated the latest established principles in respect of the interpretation of contract terms. In the judgment, Stuart-Smith J reiterated that the overarching objective for the Court is to identify the intention of the parties, something that may be achieved by determining "what a reasonable person having all the background knowledge which would reasonably have been available to the parties would have understood the parties to have meant".
Where a claimant acquires a benefit as a result of doing something by way of mitigation which arises out of the consequences of a breach of contract by the defendant and is in the ordinary course of business, should that benefit be brought into account when assessing the claimant's loss?
This issue was considered by the Court of Appeal in December, which whilst a shipping case, the principles relating to mitigation are equally applicable to construction cases.
Latest legislation
The Modern Slavery Act 2015, which came into force in October 2015, is the latest step in eliminating modern slavery (constituting the offences of slavery, servitude and forced or compulsory labour and human trafficking) in the UK.
On 15 January 2016, the Iris Oifigiuil, the Irish Government’s official publication, published details of its panel of adjudicators. The publication states:
In exercise of the powers conferred on the Minister of State for Business and Employment by the Construction Contracts Act, 2013, the Minister of State for Business and Employment has appointed the following persons as members of the Construction Contracts Adjudication Panel, established under Section 8 of the Construction Contracts Act, 2013. These appointments are for the period commencing on the 8th December, 2015 and ending on the 7th December, 2020.
Webinars to watch
Interrogating the 2009 Act payment regime: key case law in the past year
This webinar explains the background and the key points arising out of a string of important cases decided in the past 15 months, namely Harding (t/a MJ Harding Contractors) v Paice and another (first instance and court of appeal); ISG Construction Ltd v Seevic College; Galliford Try Building v Estura Ltd; Leeds City Council v Waco UK Ltd; Caledonian Modular Ltd v Mar City Developments Ltd; Henia Investments Inc v Beck Interiors Ltd; Severfield (UK) Ltd v Duro Felguera UK Ltd; Harding (t/a M J Harding Contractors) v Paice & Anor
Upcoming webinar
Our next webinar on an interesting and topical area of construction law will take place on 24 February. To register or for further information, please contact Selina Davies.
What is troubling you?
The content within Foundations is produced to help you. If you have a particular issue or area of law that you would like us to cover, then email construction@eversheds-sutherland.com and we will endeavour to address it in a subsequent edition of Foundations.
This information is for guidance purposes only and should not be regarded as a substitute for taking legal advice. Please refer to the full terms and conditions on our website.
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