4 December 2008 19:24

Silver Shemmings LLP News Archive

The Construction Act Consultation - Proposed changes to the adjudication procedure

In the 2nd Consultation paper there is the suggestion that the requirement that the adjudication provisions which currently only apply to construction contracts which are in writing should be removed.

All those in the construction industry know that construction contracts are more often than not only signed once the project has been finished or may not ever be signed, and in many instances are varied by way of oral agreement.

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September 2007

Waste Management for construction sites - New Proposals

A consultation period on construction site waste management has just closed and a summary of responses is expected shortly with new regulations coming into force in April 2008.

It is a fact that a considerable amount of waste is generated on all construction projects. This waste ends up in landfill. It is estimated that 90million tons of waste is generated in construction and demolition projects each year. Of that, 34% comes from packaging and materials delivered to site. There is considerable potential for financial savings if much of this waste were either recycled or steps taken to minimise waste.

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Sarah Shemmings

August 2007

Changes to the “Construction Act“ The Second Consultation

In June of this year the then Department of Trade & Industry introduced the second consultation period for changes to the Housing Grants Construction & Regeneration Act 1996 (“the Construction Act”). In the forward to the consultation document Margaret Hodge stated that the second consultation period on a “full package of measures” would “improve transparency and clarity in the exchange of information relating to payments thereby enabling parties to construction contracts to manage cash flow better; and to encourage parties to resolve disputes by adjudication”.

The consultation document which runs to some 92 pages appears to look at the problems encountered by the construction industry in seeking to follow the requirements of the Act and, which requirements have led to a considerable number of challenges in the courts relating to the interpretation and operation of the Construction Act.

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August 2007

An architect’s responsibility for latent defects

The Court of Appeal in February 2007 gave judgment in the case of Pearson Education Ltd v. Charter Partnership Ltd. The Court of Appeal held that the Architects were liable in negligence to the claimants who were the current lessees of a building for flood damage arising out of a negligently designed rainwater drainage system.

In this case the Defendants had designed a warehouse with a rain water drainage system that could not cope and as a result the claimant’s suffered a flood which damaged their stored goods causing a considerable financial loss. What they did not know was that the building had suffered a similar flood some years earlier.

The Architects argued that the claimants were outside the range of any duty of care it owed and there was no chain of causation linking the Architects to the Claimants.

The Court of Appeal held that the design defect was a latent defect and it was reasonably foreseeable that an inadequate drainage system would cause damage. The Court further found that there had been no evidence given to the Claimant of the previous flood and there was no reason why the Claimant should have carried out a survey into the adequacy or otherwise of the drainage system. In fact there was nothing to alert the Claimant that there was this potential problem. This claim was also within the relevant limitation period and therefore the Claimant succeeded against the Defendant.

July 2007

“Delay? What delay?”

A case earlier in the year in the TCC Court looked at a claim for damages for delay to a project. One issue was whether delay to one part of the construction programme was on the critical path and whether delays due to associated remedial works had delayed completion. Whilst the court held that the professional engineer had been negligent in the way it had carried out its duties, this negligence had no effect on the losses claimed and therefore no damages were payable.

The Judge made the some interesting comments about programming –

1. The critical path can be defined as “the sequence of activities through a project network from start to finish, the sum of whose durations determine the overall project duration
   
2. Duration is only the shortest time if activities on the critical path are carried out in the shortest time
   
3. There may be more than 1 critical path
   
4. It is important to look at activities at or near the critical path to understand their potential impact on the project
   
5. Windows analysis, reviewing the course of a project month by month, provides an excellent form of analysis to inform those controlling the project what action they need to take to prevent delay to the project
   
6. Float in a programming sense means the length of time between when an activity is due to start and when it must start if it is to avoid being on the critical path. Float can also be used to refer to the additional time needed/allowed to complete an activity over and above the shortest time that is reasonably required
   
7. It is of course, obvious that the analysis is only valid if it is comprehensive and takes account of all activities
   
8. If a retrospective delay analysis is being conducted .., the analysis must include the time to the end of the project otherwise activities may occur which will take them on to the critical path after the date of the final window or watershed.

This case shows the need to back up any delay analysis by factual evidence especially on a large project where several issues may be linked to delay but may not necessarily be the true cause of the delay for which damages are sought.

July 2007

“Who’s driving the company car?”

Company cars and speeding tickets can be a problem. If a ticket is issued for speeding it is sent to the registered owner who is responsible for providing details of the driver at the time the offence took place. If you don’t know who was driving then a request to the Central Ticket office of the relevant police force may give you a copy of the photograph taken at the time.

However, if the car was a company car and no-one owns up to driving it at the relevant time then there could be a problem. If no driver can be identified then the Company Secretary or a director is likely to be on the receiving end of a prosecution for failure to provide the driver’s details. If the Company can show that it has made every effort to identify the driver but without success, then the company may receive a warning and a request to institute a driver log out system so that all who drive the company car (ie it is used as a “pool” car) have to register the dates they were driving that car etc. Be warned though, if this happens again and the driver doesn’t own up then the Company and its directors will be prosecuted!

July 2007

Pre-action protocols - All change

Pre-action protocols were developed over a number of years in respect of a number of common types of claims, such as personal injury, professional negligence and construction.

The aim of the protocol is to reduce the number of claims going to litigation. Now, if one wants to make a claim, the protocol has to be followed before a claim can be issued in Court. Protocols do work and have significantly reduced the number of claims going to Court.

However, there are some problems with the protocols especially those relating to construction or professional negligence claims. The aim of the protocol is to exchange information to allow each side to examine the claims and defences being made and to try and reach an agreement. However in large claims this can be a lengthy and costly process, with each party bearing their own costs and should the process fail, those costs are not recoverable in the subsequent action.

There are currently 9 pre-action protocols each being slightly different in its requirements. At the current time there is a consultation process taking place to look at whether these can be streamlined into one general protocol with specific subject appendices or whether the system should stay the same. At the same time the consultation is looking at whether any other changes should be made, especially with regard to costs.

Responses to the consultation paper have now been submitted and are now being considered – watch this space!

June 2007

Adjudication - Another Protocol

The Adjudication Society has last year produced a protocol for Adjudicators in respect of how they should act when appointed.

Adjudication in construction claims is a well used process. However there have been grumbles about inconsistencies in the way some adjudicators act. This protocol does not introduce any new points but merely draws together a list of common sense points which if followed, will reduce criticisms of the way adjudicators act. The adjudication time table is tight and adjudicators have only a small amount of time in which to understand and give a decision on issues which can be very complex and time consuming.

The draft protocol states (in brief) that an adjudicator has an obligation to act expeditiously fairly and impartially between the parties at all stages and should ensure that each party has a reasonable opportunity to put its case. Any conflicts of interest must be disclosed and the adjudicator must treat the parties with courtesy. Further an adjudicator must propose a feel basis and seek agreement form the parties and expenses must be properly justified.

June 2007

 

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