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On-Site Review: 2024 in Perspective16 December 2024

2024 finally heralded a more positive outlook for the construction sector. The UK construction industry returned to growth in March after a seven-month contraction, driven by a rise in civil engineering activity. UK housebuilders reported that materials prices had started to fall after a period of double-digit inflation. It was also a good year for hotel, leisure and education projects, which grew by 9% in 2024 – a tenth higher than this time last year.

The increased optimism stemmed from greater confidence in the economy and a more positive outlook for interest rates. Contractors, especially in the commercial and civil engineering sectors, were regularly in demand, including on projects to build and maintain roads, railways and infrastructure. July’s UK general election and the new government’s promise of long-term investment in capital spending and infrastructure, suggests demand for construction related services may be around for some time.

The more positive outlook was tempered by short to medium term market uncertainties and pent-up demand. Large projects and utilities companies, including Hinkley Point C, National Grid and Thames Water, warned of the impact of labour shortages on cost, future delivery and the ability to improve services. There was also recognition that the planning system needs to be streamlined to respond to housing and infrastructure demands. Contractor insolvencies were a continued concern with the loss of several well-known industry names, including ISG.

"This year saw a landmark Supreme Court decision on access to adjudication, a case in which WFW acted."

Unfortunately, the industry’s past failings continued to cast a shadow. The publication of the Grenfell Tower report in September highlighted that decades of failure by UK government had led to the fire. Successive governments had failed to hold building product manufacturers to reliable safety standards or prevent them from actively misleading markets and regulators. The pace of ongoing fire-safety remedial works was also accepted as being too slow. In October, the government gave UK housebuilders a deadline to fix dangerous cladding with repairs starting to fix unsafe blocks within 18 months. Historic industry failings will take time to remedy, especially given the lack of qualified fire engineers contributing to the slow pace of repairs.

Against this background, there were several significant developments for construction law in 2024. This year saw a landmark Supreme Court decision on access to adjudication, a case in which WFW acted. There were important decisions related to building liability orders under the Building Safety Act 2022, interim payment arrangements, letters of intent, defects, arbitration and adjudication enforcement.

Finally, there continued to be good news for WFW’s construction expertise. From a strong performance in legal directories to significant growth in the team, all serving to cement the strength and depth of our client offering.

In this edition of our annual On-Site Review, we have gathered together in one newsletter a selection of the most thought-provoking articles written by members of our team over the last year. If any of our articles raise questions or comments, please do reach out and share your thoughts with us.

Whatever 2025 brings, we continue to be here to support with our insightful and commercial advice.

Wishing all our loyal readers a Merry Christmas. We look forward to continuing to help you navigate the construction law landscape in 2025.

Adjudication

Clarity but not closure from landmark Supreme Court decision

Barry Hembling reports on a landmark supreme court ruling that provided the first strong guidance on what constitutes a construction contract for adjudication purposes.

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Access to Adjudication restricted by Supreme Court Decision

In a landmark decision in which we acted, the UK Supreme Court has, for the first time in twenty-six years of statutory adjudication, provided guidance on the meaning of a construction contract for construction operations. In this article, Barry Hembling and Simon Jennings examine whether the decision now provides the clarity we have been waiting for.

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Cross-claims in adjudication: opening Pandora’s Box

Authored by Ryland Ash and Jonathan Clarke, this article examines the potential issues that can arise when cross-claims are raised as a set-off defence in an adjudication as highlighted by the recent decision in Morganstone Limited v Birkemp Limited [2024] EWHC 933 (TCC).

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Jurisdiction Issues in Adjudication – Van Elle LTD v Keynvor Morlift Ltd

This article written by Theresa Mohammed focusses on the interpretation of “construction operations in England” and the implications for adjudication proceedings.

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Adjudication Dispute Ruling Elucidates Merit of Cross-Claims

In an article for Law360, Ryland Ash and Jonathan Clarke delve into the reasoning behind the decision in Morganstone Limited v Birkemp Limited [2024] EWHC 933 (TCC), highlighting the potential complications that can arise when cross-claims are used as a set-off defence in an adjudication.

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TCC offers guidance on threshold for granting injunction to prevent adjudication proceedings

This article written by Theresa Mohammed analyses the recent case of Beck Interiors Ltd v Eros Limited [2024] EWHC 2084 (TCC) deals with adjudication in construction contracts and the right to apply for an injunction to prevent adjudication proceedings.

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"The inquiry panel saw changes with the appointment of new members and assessors over time, ensuring a broad spectrum of expertise and perspectives in the investigation."

Building Safety

The Grenfell Tower Inquiry Phase 2 Report – what are the key findings?

In an article published by LexisNexis, Theresa Mohammed looks at the Phase 2 report of the Grenfell Tower Inquiry highlights multiple institutional and individual failings that collectively led to this disaster. Notably, the inquiry panel saw changes with the appointment of new members and assessors over time, ensuring a broad spectrum of expertise and perspectives in the investigation.

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New building control changes have far reaching implications

In an article for Construction Law Magazine, Barry Hembling analyses important new changes from 6 April 2024 which fundamentally impact how and when UK construction projects are approved.

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The reincarnation of time-barred claims

In a recent article for Construction Law Magazine, Stephanie Geesink and Dom Turner-Harriss analyse a Court of Appeal judgment that sets out how the courts will approach fire safety claims under the Defective Premises Act following the introduction of the extended limitation periods in the Building Safety Act.

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Cladding remediation liability under the Building Safety Act

Featured in Building Magazine, this article by Theresa Mohammed examines the recent decision of the Court of Appeal in R (on the application of Redrow plc) vs Secretary of State for Levelling Up, Housing and Communities [2024] EWCA Civ 651, where the Court of Appeal has clarified the criteria by which the secretary of state should make decisions on liability for cladding remediation and when developers might reasonably challenge them.

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"The case Vainker & Another vs Marbank Construction Ltd & Others provides useful guidance on claims made under the Defective Premises Act ​1972."

Contracts – review of JCT 2024

JCT 2024 ducks the difficult issues

In an article for Construction Law Magazine, Barry Hembling asks whether the updates are keeping pace with fast moving developments in construction law.

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Contractual interpretation

Contract termination for repeated late payments – Providence Building Services v Hexagon Housing Association

Theresa Mohammed and Alexander Creswick look at another recent decision involving Providence Building Services Ltd and Hexagon Housing Association Ltd. The case is of particular interest to the industry as it concerned termination for a repeat payment default by an Employer under a JCT D&B 2016 and focusses on contractual provisions that had also been carried over into the new JCT D&B 2024.

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Has your Final Payment notice become conclusive?

Featured in Construction Law Magazine, Stephanie Geesink and Dom Turner-Harriss examine the case of Battersea Project Phase 2 Development Co Ltd v QFS Scaffolding Ltd [2024] EWHC 591 (TCC) which provides helpful guidance in understanding exactly when a Final Payment Notice can be challenged and at what point it becomes conclusive.

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Shovel ready? What the parties are promising to build – and what they might actually do

As featured in Building Magazine, Theresa Mohammed discusses the recent case of Vainker & Another vs Marbank Construction Ltd & Others, reminding us to be express in the scope and terms of appointments and to execute contract documents properly to minimise risk. This case also provides useful guidance on claims made under the Defective Premises Act ​1972.

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Design liability

Professional liability may extend further than consultants think

Theresa Mohammed is quoted in Building Magazine regarding a recent case which clarifies what kinds of claims can be made against consultants if they fail in their duties.

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Time Restraints for parties to issue notifications under 2016 JCT Contract

Theresa Mohammed and Megan Parry explore the recent case of My Contracts Ltd v 74 Hamilton Terrace Freehold Ltd [2024] EWHC 2896 (TCC), where the TCC dealt with time restraints for parties to issue notifications under the 2016 JCT Design and Build Contract.

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"The National Infrastructure Commission’s 2024 report highlights a critical concern: infrastructure costs in the UK are significantly high."

Energy

New note on construction disputes in the energy sector

In a note written for Practical Law by Thomson Reuters, Stephanie Geesink, Jack Moulder, Hsu Mei O’Neill, Philippa Beasley and Dom Turner-Harriss provide an overview of construction disputes in the energy sector. They consider the types of claims that may arise in a project, focussing on the construction and commissioning of an energy plant, how disputes are resolved in the sector and specific issues related to the Construction Act 1996.

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Infrastructure

Understanding the cost drivers of major infrastructure projects in the UK

Following the publication of The National Infrastructure Commission’s 2024 report: Cost Drivers of Major Infrastructure Projects in the UK, Theresa Mohammed distils the reports findings to provide construction professionals, employers, contractors and project owners in the UK with a comprehensive understanding of the challenges and opportunities within the sector.

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A new vision for UK infrastructure – accelerating future and rebuilding confidence

Theresa Mohammed examines the challenges addressed by NISTA, its anticipated benefits for the infrastructure industry and the broader implications for contractors and employers.

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"The Dubai Court of Cassation has issued important rulings on the enforceability of arbitration clauses in construction disputes."

Insolvency

Collapse of ISG and contractor insolvency – another stark warning to the construction industry

ISG’s collapse and formal entry into administration on 20 September 2024, is deeply troubling news for the construction industry and is likely to have profound knock-on effects for contractors, subcontractors and further down the supply chain. This article, written by Theresa Mohammed, covers the background to this insolvency and the wider implications for the construction industry. It also offers some practical lessons that can be learnt by contractors and subcontractors so as to avoid future insolvencies in the industry.

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Insolvency in the Construction Industry

In an article for Lexis+ UK, Theresa Mohammed and William Stewart explore some of the main causes of contractor insolvency, examine protective measures and warning signs. They consider employer and contractor perspectives, offer practical tips for managing risk and discuss possible post-insolvency actions against directors, highlighting key case studies of ISG and Carillion.

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Jurisdiction

Recent Dubai Court of Cassation decisions on enforceability of arbitration agreements

In a series of recent Dubai Court of Cassation (“DCC”) decisions, the DCC has issued important rulings on the enforceability of arbitration clauses in construction disputes. This article looks at these rulings and their practical implications for parties involved in construction projects in the UAE.

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Strategic insights

Blueprint for Growth

In this article, Theresa Mohammed examines the set of twelve recommendations put forward by Tier 1 UK infrastructure and construction contractors and consultants, for the future government to implement to try and improve the UK’s economy, growth and productivity.

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