Laing O’Rourke Construction v Healthcare Support (Newcastle) and Newcastle upon Tyne NHS Hospitals Trust  reminds us of the tests an independent tester should apply before certifying practical completion and the importance of setting out in contract the extent to which strict observance of the specification is necessary. The first defendant was engaged to procure facilities at two hospitals by the second defendant, an NHS Foundation Trust. It sub-let the design and construction of the works, divided into nine phases, to the claimant. The dispute centred on the Phase 8 which comprised two new blocks of staff offices. Laings believed that this phase was complete by mid-2012. However, the NHS trust … Read more

Around this time last year the Technology and Construction Court (TCC) ruled in Parkwood Leisure Ltd v Laing O’Rourke Wales and West Ltd that a collateral warranty could be a ‘construction contract’ for the purposes of the Housing Grants, Construction and Regeneration Act 1996 (the “Act”) and subsequently subject to the mandatory requirements of the Act including the right for a party to a construction contract to refer any dispute to adjudication. Aside from creating a certain amount of polemic, the decision also prompted many to consider whether beneficiaries of third party rights could also rely on this statutory right as a means of dispute resolution. This discussion had, until … Read more

I’ll be speaking at the Chartered Institute of Building’s Masterclass at the H Hotel in Dubai on 3 and 4 November. This informative and advanced level conference tackles prominent issues in international construction law relating to bonds and insurance, and forms of construction and engineering contract commonly used in the Middle East and North Africa. Bonds, guarantees and insurances are a vital component of managing risk in any project. But they come with a host of hidden challenges and risks and issues, including in relation to calling and injunctive relief, compatibility with local law and creditworthiness. FIDIC is the most widely-used construction and engineering standard form in the Gulf Co-operation … Read more

The Complex Projects Contact (CPC) was published by the Chartered Institute of Building (CIOB) in 2013. This construction contract put effective time and cost management at its heart. It was also the first standard form to focus on digital communication and BIM. For a construction team to collaborate effectively and transparently its members need to share project parameters and information. This is best achieved by appointing them under contracts with a common philosophy. The CPC is shortly to be joined by a professional appointment. The CPC’s features filter down into the new “Consultancy Appointment”. BIM remains intact, as does the requirement for the parties to co-operate in mutual trust and fairness. … Read more

I recently held a seminar on contract termination and there was a good deal of discussion about a related topic; the power to omit work. Employers (or, for that matter, main contractors) may want to omit work for a variety of reasons – perhaps the price has become too high, technical requirements have changed or they have simply lost confidence in the contractor’s ability to carry out the work – but do construction contracts permit a change in scope of this kind? Contracts place an obligation upon the contractor to complete the work, but a party also has a corresponding right to complete the work it has contracted to carry … Read more

The use of net contribution clauses (NCCs) in construction contracts has long been a matter for debate. For the professional team they provide a safety net for claims where liability is split between different members of the team (without an NCC the paying party can recoup losses from other members of the team, but only where there was existing contractual liability between those members of the team and the employer). For employers, they create uncertainty surrounding potential recovery of losses and leave them vulnerable to the extent that any of the parties named in the NCC become insolvent. They create a recovery Frankenstein where claims against different parties are sewn … Read more

The Construction (Design and Management) Regulations 2007, which govern health and safety in relation to construction sites, are to be thoroughly revised next year.  The proposed replacement Regulations  are under consultation and include important changes.  Olswang welcomes your feedbackon these changes. Our aim is to produce a balanced umbrella response to the Health and Safety Executive .  For our take on the proposals go to: We very much look forward to receiving your feedback on the proposed Regulations by 31 May 2014. Please contact me if you have any queries.

Contractors in financial difficulty may put together attractively-priced tenders in order to secure work, obtain cashflow and keep the business running. The prices tendered can be tempting to employers. A contractor with financial problems is apt to underperform. It may fail to allocate sufficient labour and more defects may result than usual. Quality can play second fiddle to cost compromises as the contractor strives to reduce business losses. The employer may receive a number of debatable claims. Most palpable is the concern that the contractor becomes insolvent before it finishes the works. This typically leads to substantial time and cost overruns. Lateness weakens profit and may cause breach obligations owed … Read more

Constructive has provided readers with vital news and opinion from Olswang’s construction and development team since 2011. I’m excited to now announce the roll-out of our first major update to our blog. The first thing you’ll notice is a fresher, more “widescreen” look and a less cluttered homepage. Look deeper and you’ll see more subtle changes at work: We’ve consolidated Article Categories and Tags (the means by which blog posts are categorised). This should make it easier for you to locate relevant content; Each blogger’s details can be found from their posts, including how to contact them for any comments or queries; Twitter functionality has been baked-in so you can catch … Read more

On Wednesday 19 March, the Olswang award-winning tax team will be discussing the changes announced by the UK’s Chancellor of the Exchequer in his 2014 Budget and providing expert commentary on their impact.  Despite the gathering pace of the UK economic recovery, the Chancellor has warned that there is a ‘long way to go’ and that 2014 will be ‘a year of hard truths’. With a 2015 general election looming, the Budget will be more political than most as the sitting Government coalition parties seek to set the scene for their forthcoming manifestos. It is likely to contain measures to boost housebuilding, exports and business investment.   Join the debate … Read more

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