Construction Law Review

9 December 2015

James Williams and Jonathan Culley, Acuity Legal

Cath Bone, Lee Wakemans

Insurance Claims

Aspen Insurance v Adana Construction [2015] ECWA Civ 176

Kings Dock Mill Liverpool

Photo credit: Skyscraper News

Crane Collapse

Photo credit: Liverpool Echo

Crane Collapse

Photo credit: HSE.gov.uk

Crane Collapse

Photo credit: HSE.gov.uk

Crane Base

MT Hojgaard AS v E.On Climate and

Renewables UK [2015] EWCA Civ 407

Clause 8.1 of the contract:

The Contractor shall perform the works with due care and
diligence expected of appropriately qualified and experienced
designers, engineers, and constructors as the case may be

Technical Requirements J 101

J 101

A requirement for the foundations to have a service life of 20

years.

FIDIC Example
The documents forming the Contract are to be taken as mutually explanatory
of one another. For the purposes of interpretation, the priority of the
documents shall be in accordance with the following sequence:

the Contract Agreement (if any),

the Letter of Acceptance,

the Letter of Tender,

the Particular Conditions,

these General Conditions,

the Specification,

the Drawings, and

the Schedules and any other documents forming part of the Contract.

If any ambiguity or discrepancy is found in the documents, the Engineer shall

issue any necessary clarification or instruction.

Cavendish Square v Makdessi [2015]MKSC 67

Parking Eye v Beavis [2015] EWCA Civ 402

Old law Dunlop Pneumatic Tyre Co v New Garage

Lord Dunedin liquidated damages will be penalties if:
they are not a genuine pre-estimate of the likely loss;
the sum stipulated is extravagant and unconscionable in
comparison with the greatest loss that could conceivably
follow from the breach.
New law
If any provision which is a secondary obligation imposes a
detriment on a party in breach which is out of all proportion to any
legitimate interest of the innocent party on the enforcement of the
primary obligation then it will be a penalty and will be
unenforceable.

Quiz time

Disputes
1. Which of the following statements is true (there may be more than one)?
(a) The statutory right to refer a dispute to adjudication under the Construction
Act 1996 (as amended) only arises where the construction contract is in writing.
(b) The statutory right to refer a dispute to adjudication under the Construction
Act 1996 (as amended) applies to all construction contracts whether wholly in
writing, partly in writing or wholly oral.
(c) The statutory right to refer a dispute to adjudication under the Construction
Act 1996 (as amended) applies to all construction contracts whether wholly in
writing, partly in writing or wholly oral provided that the adjudication provisions
are in writing.
(d) The statutory right to refer a dispute to adjudication under the Construction
Act 1996 (as amended) applies to all construction contracts whether wholly in
writing, partly in writing or wholly oral, however, where the contract is wholly oral,
the adjudication provisions of the Scheme for Construction Contracts 1998 will
apply.

Disputes
2. Which of the following are usually considered to be grounds for
challenge in the case of expert determination?
(a)
(b)
(c)
(d)

Gross/manifest error.
Procedural irregularity.
Fraud.
Failure to give reasons.

Disputes
3. Your construction contract contains a tiered dispute resolution clause
providing that when a dispute arises it must first be referred to the CEO of
each party to try and reach an amicable resolution. Failing this the dispute
may be referred to adjudication (the adjudication provision contains all of the
mandatory requirements of the Construction Act 1996 (as amended)). A
dispute has arisen what should you do next (after speaking to your lawyer
of course)?
(a) The dispute must be referred to the CEOs first as this is what the
contract says.
(b) The dispute can be referred to adjudication immediately and the
contractual adjudication procedure will apply as it is Act-compliant.
(c) The dispute can be referred to adjudication immediately and the
Scheme for Construction Contracts 1998 will apply.
(d) Something else entirely.

Delay
4. The cost to an employer of mitigating the effects of a delay
caused by a contractor breaching its obligations under the contract
(for example, by negligently causing a fire) would not, in principle, fall
within the scope of the liquidated damages clause. The employer
retains a right to recover such foreseeable losses (under the first limb
of the case of Hadley v Baxendale [1854] EWHC J70).
True or false?

Delay
5. Which one of the following best sums up the position on an award of an
extension of time on concurrent delay, following the 2012 case of Walter Lilly &
Company Ltd v Mackay and another [2012] 1773 (TCC):
(a) If there are concurrent causes of delay, the issue should be approached in a
fair and reasonable way and responsibility for the delay should be
apportioned as between the Relevant Event (entitling the contractor to an
extension of time) and the contractor risk event.

(b) If there is a Relevant Event, the contractor gets his extension of time,
regardless of any concurrent delay that might be his own fault.

Design Liability
6. Which of the following statements about design liability is true?
(a) The common law imposes on a professional person and a design
and build contractor the same standard, that is, a standard of
reasonable skill and care.
(b) The Supply of Goods and Services Act 1982 (as amended by the
Sale and Supply of Goods Act 1994) provides that in a contract for the
supply of a service where the supplier is acting in the course of a
business, there is an implied term that the supplier will carry out the
service with reasonable care and skill.
(c) Professional persons cannot delegate their design duty to third
parties in any circumstances.
(d) A provision in a professional appointment which seeks to impose an
absolute obligation on a professional person is unenforceable.

Design Liability
7. Which of the following statements is true about an unamended JCT
Design and Build Contract, 2011 edition (there may be more than one)?
(a) The Contractor's design liability is absolute: he warrants that the
Works, when complete, will achieve specific results set out in the
contract.
(b) The Contractor's design liability is one of reasonable skill and care
only.
(c) The Contractor has no responsibility for any design contained in the
Employer's Requirements.
(d) The Contractor is responsible for any mistake or inaccuracy in the
design of the Works and for any discrepancy or divergence between the
Employer's Requirements and the Contractor's Proposals.

Practical Completion
8. Which of the following statements is true (there may be more than
one)? "Practical completion" should be certified:
(a) When the work to be done under the contract is complete in all
respects and all patent and latent defects have been remedied.
(b) When the work to be done under the contract is complete in all
respects, including any de minimis items, and all patent defects have
been remedied.
(c) When the work to be done under the contract is complete in all
respects apart from de minimis work and all patent defects have been
remedied.
(d) In an unamended JCT 2011, when the Works are complete, the
conditions precedent have been satisfied and there are no apparent
defects.

Practical Completion
9. Which of the following statements is true (there may be more than one)?
Under a JCT 2011 edition contract:
(a) If the Employer makes early use of the works practical completion is
deemed to have occurred.
(b) If the Employer uses all of the Works for the purpose for which they
were intended prior to the issue of the Practical Completion Certificate,
practical completion is deemed to have occurred.
(c) If the Employer takes possession of part of the Works prior to the issue
of the Practical Completion Certificate, practical completion is deemed to
have occurred for that relevant part.
(d) If the Employer takes possession of the whole of the works prior to the
issue of the Practical Completion Certificate, practical completion is deemed
to have occurred for the whole of the Works.
(e) Exclusive possession is not a determining factor in deciding whether
practical completion is deemed to have occurred.

BIM
10. Is the use of BIM (Building Information Modelling) mandatory for
all construction projects in 2016?
(a) It is mandatory for all new construction projects to use BIM, by
2016.
(b) It is a mandatory target set, such that all government projects will
be required to use BIM Level 2, by 2016.

CDM2015
Developers
&
Contractors

Lee Wakemans Limited

8 Neptune Court
Vanguard Way
Ocean Park
Cardiff
CF24 5PJ
Tel: +44 (0)2920 44 29 00
www.leewakemans.com

Introduction
Have been applicable since 06/04/2015
Transitional period ceased on 06/10/2015
In essence, minimal changes
Who does what and when
To bring in line with EU Directive:
Inclusion of Domestic Clients; removal of competency
Simplification?

APPLICATION??
CDM2015 applies to ALL projects
Including domestic clients

Duty holders can NOT derogate their duties

Notification is no longer a trigger point for enhanced duties

Two or more contractors, and a PD and PC MUST be appointed

Clients
If there is more than one contractor on site, the client is
responsible for appointing a Principal Designer and Principal
Contractor.
APPOINTMENTS MUST BE IN WRITING

Without an appointment in writing, the Client retains the

duties

Clients
Clients are responsible for ensuring that the Principal Designer and Contractor are compliant with
their responsibilities.
How?

A Client must take responsible measures to ensure that suitable arrangements are in place for
managing a project (including the allocation of sufficient time and other resource) to ensure that:
The HSE is Notified
Construction work is carried out so far as is reasonably practicable without risk to the health and safety of any
person;
The requirements of Schedule 2 are complied with in respect of any person carrying out construction work.

A Client must provide pre-construction information as soon as practicable to:

Each Designer involved in the design of a structure; and,
Each Contractor who is or might be engaged by the Client in relation to a project.

A Client must ensure that:

The Principal Designer complies with the duties in Regulation 9;
The Principal Contractor complies with the duties in Regulations 12 and 13;
Before the construction phase begins a construction phase plan is drawn up;
The Principal Designer prepares an appropriate health and safety file for the project.

Clients
Assistance independent?
Client CDM Advisors

PD
PD Consultant

Notification
The notification threshold for projects has changed. A project
becomes notifiable where it lasts longer than 30 days AND has
more than 20 workers, working simultaneously at any one point OR
exceeds 500 person days.

Notification is a stand-alone requirement and does not give rise to

any additional duties.
CDM 2015 applies to ALL construction projects irrespective of size,
duration or complexity and that whether a project is notifiable or
not has no bearing on the duties to be discharged.

PC & Contractors
Minimal changes
Construction Phase Plan required for ALL projects

Construction Phase Plan

For ALL projects
Liaison between PD and PC to prepare
Proportionality
Site specific

No requirement for anyone to advise Client on its suitability

Client just has to ensure one is prepared

The Future of CDM?

Who knows?

HSE still issuing FAQs and not every inspector will give the same
answer
Status of guidance to be clarified
EU Directive up for review

Regulations still do not tie in to EU Directive

Uptake of PD role

Understanding?
Designers do not like it some refusing on grounds of no PI
Even contactors unwilling to take on role for D&B

QUESTIONS
Cath Bone
Senior H&S Consultant

Lee Wakemans Limited

8 Neptune Court
Vanguard Way
Ocean Park
Cardiff
CF24 5PJ
Tel: +44 (0)2920 44 29 00
www.leewakemans.com

Quiz answers

And the winner is

Construction Law Review

James Williams

Jonathan Culley

Partner
Acuity Legal Ltd
Tel: 029 2067 4420
jwilliams@acuitylegal.co.uk

Cath Bone

Senior Associate
Acuity Legal Ltd
Tel: 029 2067 4460
jculley@acuitylegal.co.uk

Senior H&S Consultant

Lee Wakemans
Tel: 029 2044 29 00
cathbone@leewakemans.com