Construction Foundations newsletter - July 2015

• United Kingdom

• Construction and engineering - Foundations

27-07-2015

Summary

Welcome to Foundations, our UK 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. We hope you find our newsletter useful and informative.

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Featured article

Contractor insolvency: be prepared and practical steps to take in the event of insolvency

We have been instructed  by a number of clients in recent weeks in relation to construction projects which have been disrupted due to a main contractor becoming insolvent during the course of undertaking the works. Under the terms of a building contract, there will usually be a number of mechanisms which can assist a client, both financially and practically, in an insolvency situation provided steps have been taken to address those aspects of the contract at the outset. Dominic Lacey and Catherine Andrews look at the protection available to employers in this situation and steps to be taken if insolvency occurs part way through your project.

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Top 3 cases

Adjudication: key decision in relation to the effect of an adjudicator's decision on the limitation period for final determinination
The Supreme Court has determined the effect of an adjudicator’s decision on the cause of action and limitation period where an unsuccessful party to a statutory adjudication seeks a final determination of matters decided by the adjudicator.

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NEC Term Service Contract: Employer estopped from recovering alleged overpayments
In the case of Mears Limited v Shoreline Housing Partnership Limited [2015] EWHC 1396 (TCC), a court has decided that an employer was estopped from recovering alleged overpayments under the NEC3 Term Service Contract, and has provided useful guidance on the principle of estoppel by convention.

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Assessment of damages: taking into account financial benefit received as a result of mitigation
The recent case of Thai Airways International Public Company Ltd v KI Holdings Co Ltd [2015] EWHC 1250 held that when assessing damages, a claimant must account for any financial benefit received as a result of taking reasonable steps to mitigate its loss. However, the defendant bears the burden of proving that a benefit exists.

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Latest legislation

The draft Finance Bill 2015 includes details of planned changes to the Construction Industry Scheme (“CIS”), aimed at easing the administrative burden for taxpayers.

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