Construction Foundations Newsletter - April 2018

• United Kingdom

• Construction and engineering - Foundations

19-04-2018

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 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

Three is a crowd! The rise of third party funding in international arbitration

The use of third-party funding has been a hotly debated topic in the international dispute resolution community for some time with all signs pointing to its continued growth. The ubiquitous presence of third-party funding internationally means that the debate has for the most part moved beyond consideration of whether third-party funding should be allowed, to evaluation of more specific issues that are implicated by third-party funding.

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UK insight

Building information modelling: the Winfield Rock Report

Why lawyers need to do their homework and understand BIM is not a just a piece of software which can be left to the technical documents.

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Top 3 cases

Court provides insight on the difficulty of relying on the Doctrine of Frustration

The contract negotiations at the heart of this case took place against a backdrop of a nation in turmoil. Simmering anger and chaos were the order of the day, with riots and protests raging throughout the streets of Greece. Despite these events and notwithstanding their occurrence in the mythical land of the gods, the judge in Flying Music Company Ltd v Theater Entertainment SA & Ors [2017] EWHC 3192 (QB) ruled that consistent levels of civic unrest and violence were not enough to frustrate a contract relating to a theatre production.

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Defined Terms – Ensure they are drafted with caution

In Almacantar (Centre Point) Ltd v Sir Robert McAlpine Ltd [2018] EWHC 232 (TCC), if the relevant terms had been clearly defined and consistently applied throughout the contract, the parties could have avoided the inherent uncertainty of an adjudication and trial and potentially over £1m if the contract had been drafted more explicitly in favour of the Contractor. In any event, the case serves a warning to practitioners about the drafting and use of defined terms.

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The distinction between a personal indemnity and a secondary guarantee

A director’s desperate attempts to keep his sub-contracting business afloat led to him (apparently unwittingly) giving a personal indemnity in order to secure on account payments from a contractor to his company. Unfortunately for the director, however, the chickens came home roost! His company collapsed and the contractor pursued him via the personal indemnity. Could he argue that the personal indemnity was, in fact, a secondary guarantee? The court in Multiplex Construction Europe Ltd v Dunne [2017] EWHC 3073 (TCC) provided a response.

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Legislation update

GDPR – is it relevant to the construction industry?

With the General Data Protection Regulation due to come into force on 25 May 2018 we review whether the legislation is relevant to the construction industry and what steps construction companies may need to take in readiness for the legislation.

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