INTRODUCTION
There were so many significant legal developments in construction law during 2022 it is hard to know where to begin. The year saw important strides to make the benefits of adjudication more widely available, whether from the UK’s Court of Appeal decision in Abbey v Simply, in which WFW acted for the successful appellant, or new legislation in Thailand intended to promote fast-track dispute resolution for construction payment disputes.
This was a year when we continued to grapple with the consequences of the ongoing building safety crisis. The UK’s Building Safety Act 2022 passed into law and there were a series of important decisions from the courts concerning liability for construction defects and the standards to be satisfied when bringing defects cases.
The year also saw key legal decisions in the areas of sustainability and arbitration among others. Finally, there continued to be good news for WFW’s construction expertise. From a strong performance in legal directories to significant growth in our team, all serving to cement the strength and depth of our client offering.
In this edition of the On-Site Review we have gathered in one newsletter a selection of the most thought-provoking articles written by members of our team in 2022. If any of our articles raise questions or comments, please do reach out and share your thoughts with us. We are keen to continue to engage with our loyal readers.
Adjudication
We consider a number of judgments of the English courts that address vital aspects of the adjudication procedure and look at the impending arrival in Thailand of a fast-track adjudication process.
- UK perspective – In this edition we review a series of decisions which have been handed down recently in the English courts focussing on:
- the statutory meaning of a “construction contract” for adjudication purposes;
- the importance of valid service of notices before appointing an adjudicator;
- when an adjudication decision can be set aside on natural justice grounds;
- when it is appropriate to use Part 8 claims to resist adjudication enforcement hearings; and
- the scope of dispute in adjudication together with breach of natural justice.
- International perspective – The Thai construction and engineering sector will soon introduce a significant new act which aims to promote project efficiency in relation to payments through a fast-track adjudication process.
Fire safety
We are seeing the first wave of cases coming before the courts in response to the Grenfell Tower fire and the long process of allocating liability for defective construction.
- Building Safety Act and the first enforcement action taken by the government against a building owner in relation to its failure to carry out fire safety remediation on a tower block.
- Post-Grenfell – A recent High Court decision ordered a contractor to pay damages for the installation of defective cladding and highlights some of the challenges the construction sector has been facing in the post-Grenfell landscape.
- Defects claims under construction contracts and the court’s approach to ‘waking watch’ schemes – An article examining case law on the consequences of defects in projects. The cost of ‘waking watch’ schemes may not be covered under new home warranty insurance in the future.
Sustainability
Businesses and the UK Government are being confronted on their green credentials, both in and out of the courts. We look at those developments and how they are rising to the challenge.
- Adverse weather – An article explaining how construction contracts can deal with adverse weather such as heavy rain.
- UK Government’s Net Zero Strategy (“NZS”) hangs in the balance with a recent High Court ruling where the court held that the current NZS was unlawful.
- Cutting carbon emissions – Despite the UK Government’s NZS being put on pause, the sector has been gearing towards going green.
- Under reporting – As the annual sustainability reports are being finalised, businesses need to be aware of some of the potential pitfalls of over or under reporting on the aims, progress, detail and implementation of their sustainability-related actions.
Arbitration
The articles here consider a number of key points for anyone involved in international arbitration.
- Amendments to the ICSID Rules came into effect on 1 July 2022.
- Thai court costs decision – A recent judgment shows the Thai courts’ view on the importance of recovering legal costs through arbitration.
- Pandemic – Parties are discovering that the unprecedented emergency situation of the pandemic did not necessarily lead to the application of a different set of legal rules.
- Right to appeal – Valid incorporation of the ICC Rules into an arbitration agreement leads to waiving the right to appeal for the purposes of section 69 of the Arbitration Act 1996. If the parties truly wish to waive the effect of section 69, this needs to be made clear in the arbitration agreement. Otherwise they will be at risk of the courts deciding that the default position of a right to appeal prevails.
General
The decisions covered here provide useful guidance for contract drafters, as well as those managing projects on the ground.
- Bribery Act 2010 triggered widespread reform of culture and behaviours in the sector. It has become unusual to come across overt instances of bribery. There have been few public accusations of bribery in the courts – until now.
- The Technology and Construction Court (“TCC”) celebrates its 150th anniversary next year and we highlight some of the advantages of a dedicated court for international construction disputes.
- Disproportionate disclosure requests – The courts’ desire is to avoid such requests and to uphold the parties’ contractual bargains.
- Recovery of loss of profit – In a recent decision, the court ruled the contractor was entitled to damages for loss of profit and overheads due to the employer breaching its contractual obligation to include the contractor in a retender for the works.
- The UK Infrastructure Bank was set up as a government-owned policy bank to increase infrastructure investment across the UK, prioritising clean energy, transport, digital, waste and water sectors. The bank announces its first strategic plan.
- Mitigating pandemic risk – Businesses continue to face disruption from the public health measures used to fight COVID-19. Two recent cases from the English courts highlight the importance of mitigating the pandemic risk by careful drafting of relevant clauses and show how courts may reach different legal conclusions depending on the language of the contract.
Diversity
The construction industry has for a long time now looked inward to evaluate how it can improve itself. One such area of focus has been Diversity and Inclusion in the sector or its supposed lack thereof. This year, the theme for Black History Month in the UK is “Time for Change: Actions not Words” which has been deliberately chosen for us to take accountability for our progress.
Expanding the team
The WFW construction team grew considerably during 2022 with the arrival of Partner, Theresa Mohammed, Of Counsel Laura Lintott and Stephanie Geesink and Associates Emma Thompson and Dom Turner-Harriss. We also welcomed a new Associate, Maximilian O’Driscoll, who trained at WFW and joined the team on qualification.
