Construction Contracts & Commercial Consultants

Alway Associates

Archived Newsletters

• NEC3 contracts to be used for Olympic projects

With the focus on the build up to the 2012 Olympics already well under way it appears that the decision has been made to use the NEC family of contracts for these projects.

• Recovery of interest in an Adjudication

Carillion Construction Ltd - v – Devonport Royal Dockyard Ltd (2005) CA. In November 2005 the Court of Appeal held that an Adjudicator could decide questions of interest but only if:

• claims for interest had been properly referred to the Adjudicator,
• when the parties had agreed that questions of interest were within the scope of the Adjudication, or
• where the Adjudicator considered that interest was a question that was necessarily connected with the dispute.

It is therefore apparent that while claims for interest may succeed in Adjudication proceedings, they will require careful presentation to ensure that they do.

• Costs, Mediation and the Courts

The judiciary have previously expressed strong disapproval of the use of mediation as a tactical device. In the recent case of Wates Construction Limited v. HGP Greentree Allchurch Evans Limited [2005] EWHC 2174 (TCC) (10th October 2005) His Honour Judge Coulson QC has, as a postscript to a costs-related judgment, issued a salutary reminder about the interaction of mediation and litigation in the English Courts, when he said:-

 “In the context of offers made, I have been referred to an offer by Wates' solicitors, on 21 September [2005], of a possible mediation.  [Counsel for Wates] wisely did not push that point too hard.  The mediation was proposed far too late for it to have any prospect of success, particularly given the impregnable position in which HGP found themselves so close to the start of the trial.  Too often, in my recent experience, solicitors facing costs difficulties try to avoid them by making belated offers of mediation.  That is not what mediation is for, and it is not a practice in accordance with the CPR.”

• Construction Act - DTI report due in January 2006

It is understood that the DTI report on the consultation submitted in June 2005 with regards to payment and provisions under the Construction Act will now be published in January 2006. We will of course be forwarding more information on this as we have it.

• The Company Law Reform Bill.

While not specifically related to Construction we thought that you should be reminded that on 1st November 2005 the Company Law Reform Bill was finally introduced to the House of Lords. This is seven years after the Company Law Review Steering Group started its review of the existing law. Running to 855 clauses and 15 schedules, it will repeal about two- thirds of the Companies Act 1985 and amend other parts, and will pave the way for further changes to be introduced through secondary legislation. When the Bill comes into force as the Company Law Reform Act 2006 – which is expected to be in April or October 2007 – it will affect companies of every size.

Principally, the Bill aims to:

• simplify the administrative burden on smaller private companies, which make up the vast majority of the corporate ‘population’;
• facilitate shareholder engagement, particularly in quoted companies;
• update and clarify the law in various areas, particularly in relation to directors’ duties.

Frequently Asked Questions

On the 1st March 2005 we started our free of charge helpline. As all of our existing clients will know to their benefit, we have always been willing to offer over the phone initial advice on any specific matter at no cost. Not surprisingly we have noticed that some subjects are asked about more often than others. To this end we have decided to include this section on our newsletter which will address some of the issues that have been raised.

• We are employed under a Sub-Contract and have been accused of having committed a repudiatory breach. What is this?

Under a contract, when one of the contracting parties indicates that he is unwilling to carry out his obligations at a time before such obligation has arisen, this represent an anticipatory breach of contract.  Such breaches of contract may range form a minor failure to a complete refusal by one party to carry out any of its obligations. Depending on the nature of the breach it may amount to a repudiation of the Contract. In such circumstances a party can elect to accept the repudiation and immediately seek damages or alternatively he may wait until the actual time for performance and then seek damages.

• What is the difference between documents executed under hand or under seal with regard to the limitation period?

Under the Limitation Act 1980 the limitation period for contracts executed under seal (or by deed) is 12 years as opposed to six years for simple contracts.

• How do I claim for constructive acceleration?

A claim for constructive acceleration is usually based on the premise that a contractor is entitled to an extension of time but which the Architect wrongfully refuses to grant and who thereby exhorts the contractor to finish on the completion date to avoid having to pay liquidated damages. This is, however, essentially a claim for damages for the Architect’s breach of his obligations. Contractors are well advised, however, that their chances of success in advancing such a claim in legal proceedings are not good. 

If you have a problem or question relating to a construction contract, be it legal or commercial, and want to speak to an expert in the field then call our free helpline on:

0845 838 2759

The helpline is open Monday to Friday from 9.30am to 4.30pm and gives you the opportunity to speak over the phone to our experts who will give clear and practical advice based on their extensive experience.

Recent Articles

For more in depth information on topics related to the industry we regularly post new articles on our website. Article recently posted have included:

• NEC3 – Changes to the Compensation Events and Associated Procedures

• JCT 2005 FRAMEWORK AGREEMENT

• Concurrent Delay Reviewed

• Letters of Intent Reviewed

• Drafting for Liquidated and Ascertained damages – Avoiding Pitfalls.

• Insurance Policies and Consequential Loss

• Does a Notice of Intention to Adjudicate prevent the Final Certificate from being conclusive?

• Insolvency and Adjudication

• NEC3 – Revisions to the Schedules of Cost Components and the Fee in the ECC

• A simple guide to insurance provisions under JCT'98 and JCT Standard Building Contract 2005 Ed.

To read these and search for other articles click here.

Company News

• Congratulations to Robert Shawyer (Director at our Cardiff office) who became Vice Chairman of the Chartered Institute of Arbitrators – Welsh Branch
• Congratulations also to Michael Rowlinson (Director in our Banbury Office) for being one of the first batch of people to achieve the CIOB Accredited in Adjudication’ qualification.

Forthcoming Events / Seminars

Alway Associates hold regular events around the country. The following are some of the next events coming up and links to book your place:

Public seminars:

• Mediation – Following the recent interest in the nationwide focus on mediation Robert Shawyer is running half day and full day seminars in Cardiff and Bristol during February 2006 introducing mediation as a procedure followed by an update on case law concerning mediation. For more details click here to contact our Cardiff Office.
  
• Design Liability - In January and then repeating in March 2006 Robert Shawyer and John Richards are presenting a half day seminar on design liability. These Seminars are presented in Bristol, Cardiff and Swansea. For more details click here to contact our Cardiff Office.

• Payment Terms and Notice Drafting - In April 2006 Robert Shawyer is running a half day seminar and workshop on payment terms and notice drafting under Standard Forms of Main and Sub-Contract in compliance with the Housing Grants Construction and Regeneration Act 1996. The Seminar is to be held in Cardiff and Bristol. For more details click here to contact our Cardiff Office.

• Practical Completion, Beneficial Occupation, Sectional Completion and TakeoverIn February 2006 John Richards is presenting a half day seminar on Practical Completion, Beneficial Occupation, Partial Possession, Practical Completion, Sectional Completion and Takeover in Cardiff, Swansea and Bristol. For more details click here to contact our Cardiff Office.

• DOM/2 Standard form of Contract In March 2006 Robert Shawyer is presenting a full day Seminar on the Standard Form of Sub-Contract DOM/2 – Its management from the perspective of a Sub-Contractor, including Workshop sessions. For more details click here to contact our Cardiff Office.

• Arbitration in Construction Law DisputesIn April 2006 Robert Shawyer is presenting a half day seminar on the use of Arbitration in Construction Disputes. For more details click here to contact our Cardiff Office.

If you haven’t seen a copy of our new seminar flyer and would like the details on what we can offer please email us at enquiries@alway-associates.co.uk and we will send you our latest information.

Alway Associates:
Construction Law, Contracts & Commercial Consultants  www.alway-associates.co.uk