Litigation and things

Professor Mark D Cato

It is with great sadness that I must report that Mark D Cato died on 12 November 2012 aged 78. Mark will be remembered with great fondness by many of us, as arbitrator. Mark was a Chartered Surveyor by discipline and had worked in many countries of the world and was at one time the youngest partner of then Horace W Langdon & Every. He changed careers in his late 40′s to become a Chartered Arbitrator. To this end, in his late 50′s he took a Masters Degree at Kings College London and practiced and lectured on dispute resolution for 25 years. He was made an Adjunct Professor of Law at the China University of Political Law and Science in Beijing in 2001 where he has taught. In 2002, he was made a visiting professor at Shandong University in Jinaan in Shandong province. He has written four books on his subject. His best-known being The Sanctuary House Case. Mark was well renowned as Founder President of The Arbitration Club (1990) with around 800 plus members in 10 branches - two overseas.

Mark was a keen sportsman and games player having achieved modest success in badminton, squash, tennis, rugby, polo, skiing, water skiing and golf. He was the first joint world Monopoly champion (1972)! To Julian Critchlow, Jon Miller and I he was our pupil master in the 1990’s and will be greatly missed. Our thoughts are with his wife Alice and family.

TeCSA Adjudication Conference - 15 November 2012

The TeCSA Conference in London on 15 November is dedicated to the legal and procedural landscape of Adjudication, the current version of the TeCSA Adjudication Rules and changes to the legislation now in force.

The conference will provide an update on the law and changes in our training of adjudicators brought in last year.

Cost:  Free to fully paid up TeCSA Adjudicator Panel Members & £50 for all others - no VAT applies.

RSVP:  Caroline O’Connor -

CLICK HERE for the conference flyer.

Conference papers & presentations:

Adjudication Rules & Service Update:  Kevin Forsyth

Adjudication Case Update:  Andrew Hibbert

Update - Recent Law

Much has been happening since my last blog after the summer recess.

New Master of the Rolls

We have I am delighted to say a new Master of the Rolls, the second most senior judge in England and Wales and he is none other than Lord Dyson, many of us older lawyers remember John from his days at the bar at Keating and then 39 Essex Street. He is to be congratulated for his progression to the very top.  He has come on with a big bang, what a boy!

Lord Dyson MR confirmed in his inaugural speech as Master of the Rolls that the key to the success of the reforms is costs management. He emphasised that the Court of Appeal should maintain consistency and provide clear judgments on the application of the revised Civil Procedure Rules in order to minimise satellite litigation. However, he envisaged that there inevitably might be quite a few early cases testing the boundaries of the new rules.

He recognised that an increase in litigants in person owing to a reduction in legal aid would put increased pressure on the courts. He further noted that the civil litigation reforms were taking place against a background of far-reaching reforms to the structure of the legal profession.

He was prepared to consider change if the reforms produced "unexpected flaws and consequences". However, change would only be made on the basis of proper evidence, and if essential.

Therefore, the Jackson LJ reforms to civil litigation will go ahead in April 2013.

Is it right they get paid even when they get it wrong!

I suspect few were ready for the surprise in Lord Dyson MR’s judgment in PC Harrington v Systech International[2012] EWCA Civ 1371,especially some hardened adjudicators and claims consultants in the construction industry.

Delivering judgment in PC Harrington v Systech, Lord Dyson said parliament’s intention in passing the Housing Grants, Construction and Regeneration Act 1996 was to provide a scheme for a “rough and ready temporary resolution” of construction disputes.

He said that was why the courts enforced decisions, even where they could be shown to be wrong on the facts or in law.

“But a decision which is unenforceable because the adjudicator had no jurisdiction to make it or because it was made in breach of the rules of natural justice is quite another matter,” Lord Dyson said.“Such a decision does not further the statutory policy of encouraging the parties to a construction contract to refer their disputes for temporary resolution by an adjudicator. It has quite the opposite effect.  “It causes the parties to incur cost and suffer delay on a futile exercise. I can see no basis for holding that parliament must have intended that an adjudicator who produces an unenforceable decision should be entitled to payment.”

Now that it seems adjudicators will not be paid if they produce an unenforceable decision.The Court of Appeal has held that an adjudicator’s fees were not payable because his decision was unenforceable on the grounds of breach of natural justice, overturning Akenhead J’s TCC’s decision. It provides plenty to talk about at TeCSA’s adjudication conference later this month.

As you may recall at first instance PCH had refused to pay an Adjudicator's fees when the Adjudicator's decision was found to be unenforceable by reason of breaches of natural justice.  Mr Justice Akenhead had decided that the Adjudicator was entitled to his fees because although the decision was unenforceable, there had been partial performance of the contract between the Adjudicator and the parties to the adjudication.  He had taken the view that the role of the Adjudicator went beyond simply producing a decision and included a number of other functions including giving directions to enable the parties to present their case, generally handling the adjudication procedure, addressing correspondence from the parties and considering all submissions and evidence. Not surprisingly, PCH was unhappy with the decision and the matter was referred to the Court of Appeal.

Lord Dyson overturned the decision of Mr JusticeAkenhead finding that the parties' bargain with the Adjudicator was for an enforceable decision.   In arriving at this decision, the Court of Appeal had considered not only the Adjudicator's own terms of appointment but also Part 1 of the Scheme for Construction Contracts (England and Wales) Regulations 1998.  It was their view that the Scheme showed that Parliament had intended the Adjudicator should not be paid in cases where he did not perform all of his obligations, which would include making an enforceable decision. 

This decision will be welcomed by parties who are involved with adjudications and find themselves in a position where they have to pay for a decision that is, effectively worthless.  It will also be interesting to see whether further cases are brought as a result of this decision with parties seeking repayment of Adjudicators' fees where their decisions have been held to be unenforceable. 

This decision is expected to encourage parties to an adjudication under the Scheme to resist payment of the adjudicator’s fees whilst challenging the enforceability of the adjudicator’s decision. However, the decision does appear to have some constraints, as follows:

(i) a large part of the Court of Appeal’s analysis focused on the Scheme. A court may reach a dissimilar conclusion if an adjudication procedure other than the Scheme is used (for example, the NEC3 Adjudication procedure does not contain a provision equivalent to paragraph 11(2));

(ii) it is uncertain whether the decision is limited to breaches of natural justice, or also extends to circumstances where a decision is held to be unenforceable due to lack of jurisdiction (although the judgment of the MR suggests that this would be covered by this decision); and

(iii) it is also imprecise how an adjudicator’s entitlement will be assessed if the court severs an adjudicator’s decision.

This decision may compel adjudicators to reconsider their MO and to take additional care when conducting adjudications.

Lord Justice Davis, also sitting in the Court of Appeal, proposed that Adjudicators look at their terms of engagement to ensure they provide for any eventuality, including payment in the event of a decision not being delivered or enforced.  It is therefore likely that parties will now be faced with Adjudicators' terms and conditions including provisions providing for payment in the event of an unenforceable decision.  The question will remain as to whether or not such terms are enforceable under the Unfair Contract Terms Act 1977!

Adjudicators may therefore amend their standard terms of appointment to provide that they are entitled to be paid their fees and expenses even if a decision is not delivered or proves to be unenforceable, or to provide for payment in stages or in instalments. Whilst the Court of Appeal suggested that its judgment “should not have any great ramifications” this decision may also hearten parties to seek to recover fees already paid to an adjudicator in respect of a decision which has been held to be unenforceable.

In the meantime, parties to adjudications should ensure that they study the Adjudicators terms and conditions carefully or they may still be under an obligation to pay even when faced with an unenforceable decision.

Other law

The courts have considered a variety of issues, including whether:

  • A pay-when-paid clause is effective, even in an escrow arrangement (it is not).
  • An undisclosed expert’s report should be disclosed (it should not).
  • A trial judge had ordered double recovery (he had not).
  • An adjudicator had jurisdiction to deal with part of the dispute (he did not, and the court severed his decision).
  • An unsuccessful party may set-off against an adjudicator’s decision (twice) (it cannot and it cannot).
  • A director and shareholder had standing to bring judicial review proceedings for breach of the public procurement regime in Northern Ireland (he did not).
  • An automatic suspension of a contract award should continue under the public procurement regime (it should not).

You should know this stuff, so find out if you do not!

As to other cases of interest I wet your whistle here:

Implied term for fitness?

The case of Trebor Bassett Holdings Ltd and the Cadbury UK Partnership v ADT Fire and Security plc(2012) EWCA Civ 1158 has raised the prickly question of implied fitness for purpose obligations in construction contracts and to be frank, rather than clarifying matters, the decision done nothing to clear the fog. Up until this point case law has pointed to contractors being under an implied obligation to design and build complete products and systems that are reasonably fit for purpose.

Here ADT entered into a contract with Trebor to design and build a bespoke fire suppression system for Trebor's factory. A fire broke out at the factory and it burnt to the ground - obviously the fire suppression system had not done its job. Trebor sued in both tort and contract and was successful in its case that ADT's design was negligent, however the court found Trebor's actions were also negligent and damages to Trebor were reduced by 75%. Trebor therefore claimed that the system was a supply of goods and was therefore subject to an implied fitness for purpose under the Sale of Goods and Services Act 1982 ("SGSA").

Not so according to the Court of Appeal.

The court held (contrived might be a better wordm, given the obvious mixed work and materials content) that primarily what ADT was supplying was not "goods" but the supply of design services so the SGSA did not apply. The components that were used in the system were of an acceptable quality, it was the design that was negligent.

For employer clients out there it might be worth reviewing your standard contract terms and amending them so that the implied warranties for fitness for purpose also cover systems.


Fire and escape and Rylands v Fletcher revisited

The Court of Appeal case of Stannard t/a Wyvern Tyres v Gore [2012] EWCA Civ 1248is a beauty for its clarification. The appeal decided in October decided that the principle of “strict liability” does not generally apply to cases involving the occurrence of fire. This is a significant departure from earlier court decisions, and will have important repercussions for fire claims in general.

The background to this case goes back to the hallowed House of Lords decision in Rylands v Fletcher, that if a person brought on to his property a dangerous item involving a “non-natural use” of his property, then he would be responsible for the consequences, if the item (such as highly inflammable substances) escaped, even if he did not act negligently.

In the Wyvern Tyres case Mr Stannard operated his tyre fitting and supply business from an industrial trading estate in Hereford. The claimant, Mr Gore, occupied a neighbouring unit. In 2008, an electrical fire started at Mr Stannard’s premises, which developed and ignited some 3,000 tyres. As a result, the fire spread quickly, devastating Mr Stannard’s premises, Mr Gore’s unit and other adjoining units. Mr Gore brought a claim against Mr Stannard in negligence and in strict liability, relying on Rylands v Fletcher.

The first instance decision of the court was that Mr Stannard was not negligent but was liable to Mr Gore under the rule in Rylands v Fletcher, because the court decided that the tyres had a special risk quality, and their storage on the premises presented an exceptionally high risk of danger and was a “non-natural use” of the property.

Mr Stannard appealed to the Court of Appeal, who unanimously reversed the initial decision and decided that the principle of strict liability did not apply. The view of the Court of Appeal was that it is an indispensable requirement of the rule in Rylands v Fletcher that the defendant has brought some exceptionally dangerous “thing” onto its land and that “thing” must escape, causing damage. In the Wyvern case, the “thing” (the tyres) did not escape. The fire fuelled by the tyres had escaped, but the defendant had not brought the fire onto his land. In these circumstances a claim based on Rylands v Fletcher failed. In any event, the court ruled that the tyres were not exceptionally dangerous.

In addition, the court decided that Mr Stannard’s commercial activity as a motor tyre supplier was a wholly ordinary and reasonable activity to be carried on in a light industrial estate, and was not therefore a non-natural use of the land for the purposes of the rule in Rylands v Fletcher.

In the Wyvern case, Ward LJ concluded that in appropriate circumstances, damage caused by fire emanating from an adjoining property can fall within Rylands v Fletcher, but those circumstances are likely to be very rare, because, in his words:-

“(i) It is the “thing” which had been brought onto the land which must escape, not the fire which was started or increased by the “thing”.

(ii) While fire may be a dangerous “thing”, the occasions when fire as such is brought onto the land may be limited to cases where the fire has been deliberately or negligently started by the occupier or one for whom he is responsible.

(iii) In any event starting a fire on one’s land may well be an ordinary use of the land.”

The Wyvern case will have significant implications for fire claims in general. In particular, it is clear from the above ratio that it will now be very difficult for claimants to succeed in such cases absent proof of negligence.


Clark Electrical Ltd v JMD Developments (UK) Ltd

[2012] EWHC 2627 (TCC)

Funny things adjudicators do as to their fees

The applicant was a contractor who applied to enforce an adjudication decision. The Claimant had served a notice of adjudication. The Defendant was initially not represented. The parties were to pay an equal part of the adjudicator’s fee. The Defendant paid its part but then once it received representation denied that the adjudicator had jurisdiction. The adjudicator decided that the payment of the fee gave him ad hoc jurisdiction. The Defendant took no part in the adjudication and sought to resist enforcement of the decision against it. The Court refused to enforce the decision. A reasonable adjudicator would know the Defendant was unfamiliar with adjudication and was not represented and therefore payment of the fee did not give any ad hoc jurisdiction.

HHJ Behrens in the Leeds District Registry of the TCC held that the parties had not entered into an ad-hoc adjudication agreement as the adjudicator had found. Therefore, the adjudicator had no jurisdiction and his decision was not capable of enforcement.

Many things remain unclear about this judgment. For example, the judgment does not explain what happened at the start of the process when the sub-contractor claimed not to have received the notice of adjudication and it is certainly arguable that the adjudicator was not validly appointed because of this. Also, regardless of the sub-contractor's position in being unrepresented and unfamiliar with adjudication as a dispute resolution method, that would not of itself stop the statutory timetable running. The more likely explanation is that the parties agreed not to take issue with these points.

What was also surprising was the fact that the adjudicator sought a large sum as security for his fees and produced a 41-page decision on jurisdiction. His decision to proceed with the adjudication, finding that there was an agreement by conduct, proved costly for both parties, especially as it is unclear whether the sub-contractor's withdrawal from the process would have protected it from liability for his fees.


National Merchant Buying Society Ltd v Bellamy and Another [2012] EWHC 2563 (Ch)

Variations and guarantees

This case concerned an all monies guarantee and the issue was whether the variation of a pre-existing specific obligation constituted a variation of the guaranteed obligation.

It is established law that a guarantor will be discharged from a guarantee of specific obligations by a variation to those obligations. The only exceptions to this rule are if the guarantor has consented or if the variation does not adversely affect the guarantor. Until the recent case of National Merchant Buying Society Ltd v Bellamy and Another there was, surprisingly, no conclusive answer to the question of whether this also applied to an ‘all monies’ guarantee, particularly in the common situation that the guarantee was entered into at the same time as a specific obligation, such as a loan, as a means of security.

Here the court held that when the guarantor entered into the guarantee, it agreed to pay whatever was due now or in the future and made itself liable for the result of future dealings between the underlying obligor and creditor. The variation of the existing obligation did not, therefore, discharge the guarantor. An all monies, continuing guarantee given when there was a (subsequently varied) existing specific obligation between the creditor and the underlying obligor would not be discharged by the subsequent variation.

In reaching its decision, the court distinguished Bank of Baroda v Patel [1996] 1 Lloyd's Reports 391, in which Patel’s counsel conceded that, although his client's guarantee appeared to be a freestanding all monies guarantee, it should in fact be read in conjunction with the (subsequently varied) facility letter that was the reason behind granting the guarantee in the first place.

The court ruled that the wording of the guarantee and the surrounding circumstances must first be examined to establish which obligations are covered by the guarantee. If the wording makes it clear that the guarantee is to cover all future obligations owed to the lender by the borrower and there is nothing in the circumstances to limit the extent of the guarantee, then the guarantee will not be discharged by a variation of the borrower’s obligations. The judge reasoned that it naturally followed that the guarantor should not be discharged given that they have already guaranteed future obligations without knowing what they may be.

Lenders should take care when taking an ‘all monies’ guarantee to ensure that it unequivocally covers existing and future obligations and is not expressly connected to any underlying loan agreement. If it does not adequately cover future obligations or is too closely linked to specific obligations then a variation (such as increasing the loan amount) may lead to the guarantor being discharged and the lender being left without the protection of a guarantor to cover future defaults.

This case is a useful clarification of what constitutes a variation of guaranteed obligations. The distinction drawn between the Bank of Baroda case and this one is significant as the trigger for giving an all monies guarantee is often the entering into of a specific obligation. It is important to be absolutely clear in those circumstances that an all monies guarantee is intended to be exactly that.


Alstom Power Ltd v Somi Impianti SRL  [2012] EWHC 2644 (TCC), Akenhead J

In the continuing dispute between the main contractor (Alstom) and the sub-contractor (Somi), relating to the construction of a power station in Pembrokeshire, Akenhead J granted declaratory relief regarding ownership of the sub-contractor's equipment. Previously, the court had granted a final injunction and imposed a fine for contempt of court in connection with the sub-contractor's failure to return turnover package (TOP) documents.

In granting declaratory relief, the court considered the meaning of sub-contract clauses which  provided that materials and equipment brought on to site for the purpose of carrying out the sub-contract works were "deemed to be" the property of the main contractor (clause 54). It held that property in the equipment did not vest in the main contractor permanently, but would re-vest in the sub-contractor provided certain conditions were met. "Deemed to be" meant it was only intended to be the main contractor's property whilst it was on site. In reaching this conclusion, the court considered Cosslett (Contractors) Ltd v Mid-Glamorgan County Council (2007) 85 BLR 1, which also concerned the "deemed" ownership of plant, goods and materials.

The court also considered the sub-contract's termination provisions and, in particular, the main contractor's right to retain the sub-contractor's goods, materials and equipment and sell them to satisfy any debt owed by the sub-contractor to the main contractor (in this case, sums due under several adjudication decisions). The court held that this right had not been triggered as the works had not been "completed". It also noted that there may be an issue over ultimate ownership of the equipment due to the sub-contractor's insolvency under Italian law.

Thus in now seems settled law (for now) that, where a contract provided that the plant and materials “shall be deemed” or “shall be considered” to be the property of the employer, the words would be regarded as ambiguous. In such a case, other provisions of the contract might be taken into account in order to decide whether the contract had the effect of passing the legal property in the plant and materials to the employer or whether, as the prima facie meaning of the words suggested, it did not have that effect but merely entitled the employer to act as if the property in the plant and materials had passed.


Simmons v Castle [2012] EWCA Civ 1288

The Court of Appeal gave judgment on two important aspects of the forthcoming 10% increase in general damages awards after 1 April 2013. It has confirmed:

  • The increase will not be available to those claimants who enter into a conditional fee agreement (CFA) before 1 April 2013 and fall within the scope of section 44(6) of the Legal Aid, Sentencing and Punishment of Offenders Act 2012.
  • The increase in damages will apply to contract claims as well as tort claims.

The decision came because of a successful application by the Association of British Insurers (ABI) and the judgment effectively prevents certain claimants from receiving a windfall by being entitled to recover both a 10% increase in damages and their success fees under a CFA.


Ampleforth Abbey Trust v Turner & Townsend Project Management Ltd [2012] EWHC 2137 (TCC)

The recent TCC decision in Ampleforth Abbey Trust v Turner & Townsend Project Management Limited has served as another reminder of the dangers of relying on building works being procured under letters of intent rather than formal building contracts.

HHJ Keyser QC, sitting as a judge of the High Court in the Leeds District Registry of the TCC, ordered the project manager to pay an employer damages for losses arising on a project in circumstances where the entire works were carried out under a series of letters of intent.

There were a number of significant points that were argued at trial.  These included causation, mitigation of loss and reliance on limitation of liability clauses.  However, the first principle was whether or not Turner & Townsend could be liable in the first instance for professional negligence.  The court held that Turner & Townsend owed a duty of care to act with reasonable skill and care in the performance of its duties, both at common law and by Section 13 of the Supply of Goods and Services Act 1982.  It was held that part of a project manager’s duties could include advising on, and assisting with, the contractual documents.  It was decided that it is not an absolute obligation to ensure that a building contract was executed.  However, it could be for the project manager to take reasonable steps to ensure a building contract was completed.  It was held that in this case, Turner & Townsend did take on these responsibilities but had not taken reasonable steps to ensure the building contract was completed.  In addition, Turner & Townsend had failed to advise Ampleforth of the need to have the building contract signed up and to take the necessary steps to put pressure on the parties to ensure that it was completed.  It seems no warning was given to Ampleforth of the consequences if the contract was not completed.

As a result, Turner & Townsend was found liable for Ampleforth’s losses.  It seems clear, and perhaps obvious that it is dangerous for project managers to allow building projects to be completed under letters of intent.  If they do not advise employers of the problems that may arise if a contract is not completed and do not take reasonable skill and care in trying to ensure that the contract is completed then they could be liable for losses caused by the contract not being completed.  Those potential losses can be considerable; they could include liquidated damages as in this case but there would be many other circumstances where losses may arise.  For example, if the contractor decided not to complete the works, as there was no contractual duty to do that then it might be possible to claim the extra costs of employing a different contractor to carry out the works.

The duty would not be restricted just to project managers.  It would apply to all professionals and consultants who are contracted by employers to complete the contractual documents for a building project.  This case demonstrates the importance of such professionals ensuring that contractual arrangements are completed and are not forgotten about once the building works are actually commenced.

Key findings:

The court held:

  • The project manager breached its duty to exercise reasonable skill and care in procuring an executed building contract.
  • The employer would have reached a more favorable settlement had an executed building contract been in place.
  • The project manager could not rely on a liability cap in its professional appointment because that provision offended section 3 of the Unfair Contract Terms Act 1977.

I turn now to other stuff.

Is it time to dump the SCL delay and distruption protocol?

So was the thread of Edward Corbett’s paper at the International Construction Law Conference in September, inspired no doubt by what the courts are uttering on the subject.

A decade ago the Society of Construction Law published its delay and disruption protocol following a protracted genesis. It gainfully raised the difficulties associated with the analysis of delay, however it has also attracted much criticism, particularly so far as the English law of causation of loss.

The protocol recommends that when undertaking after-the-event delay analysis and when “deciding entitlement to EOT [extension of time], the adjudicator, judge or arbitrator should as far as is practicable, put him/herself in the position of the CA [contract administrator] at the time the employer risk event occurred”.

This would allow determination of what, if any, EOT could or should have been recognised at the time. In doing so, the protocol recognises that the results may not match the as-built programme.

I like others have a major problem with this, as an English lawyer one does nothypothesiseover what EOT may have been awarded when the evidence of what did occur is known or ascertainable.

In the recent ‘hot’ case of Walter Lilly & Company Limited v Mackay and DMW Developments Limited, Mr Justice Akenhead concurred with the above, saying: “If at the latest stage it is clear that the relevant event in question has actually delayed the works by, say, 10 weeks it would be an extraordinary state of affairs if the extension of time granted was anything other than 10 weeks.”

The protocol has limped along for 10 years and markedly waned since bench mark cases such as City Inn etc. It is time to move on and approach delay analysis as reality based and linked to the events on site not contrived construction logic.

Walter Lilly & Company Limited v Mackay and DMW is an extremely significant 200-page judgment because it clarifies the legal position on some of the most commonly disputed issues in the construction industry in a modern setting, upon:

  1. concurrent delay;
  2. the ‘right’ approach to analysing a contractor’s entitlement to an extension of time;
  3. a contractor’s entitlement to loss and/or expense under a JCT contract;
  4. global claims; and
  5. loss of profit/overheads claims.


In early 2004, Walter Lilly & Company Limited (“WCL”) were engaged by Mr Mackay via his company DMW Developments Limited (“DMW”) to build a luxury 5 storey home for Mr Mackay and his family in 3 Bolton’s Place, South Kensington. The £15m project was planned to take 18 months to complete.

WLC retained pursuant to a JCT SBC 1998 Edition Private Without Quantities, incorporating the Contractor’s Designed Portion Supplement. WLC had limited design responsibility, with majority of the design work being carried out by DMW’s Architect, Barrett Lloyd Davies Associates (“BLDA”) or specialist contractors. However, very little design work had been completed when the job began. The judge commented that for this reason alone the project was “a disaster waiting to happen”.

Perhaps predictably, the project quickly fell behind programme, with substantial delays being caused as a result of ongoing design decisions and the making good of alleged defects. The relationship between Mr Mackay and both BLDA and WLC deteriorated significantly, with Mr Mackay making it clear that he considered both parties to be in serious breach of their contractual obligations. Practical completion was not achieved until July 2008.

WLC took action against Mr Mackay and DMW to recover over £2m of costs arising from delay to the project. In order to determine WLC’s entitlement to costs, the court was first of all required to consider complex issues relating to extensions of time.

Concurrent Delay

WLC asked the court to award it an extension of time to PC of the project. WLC’s entitlement to an extension of time was set out in good old clause 25 of its contract, which was written in essentially the same terms as clauses 2.27 and 2.28 of the JCT Standard Building Contract 2011. The clause provided for an extension of time to be awarded by the Architect if a Relevant Event has delayed the works.

The court had to consider the issue of concurrent delay, which has long been a basis of confusion in the UK construction industry.

The inevitable question arises as to whether the contractor is entitled to a full extension of time for the delay event which is the employer’s responsibility/risk.

The English law approach to assessing concurrent delay is that the contractor is entitled to a full extension of time for the period of delay caused by the event which is at the employer’s responsibility/risk. In contrast, the Scots law approach is that the contractor is only entitled to an EOT for a reasonably apportioned part of the concurrently well-known case of City Inn v Shepherd Construction).

Mr Justice Akenhead roundly rejected the Scottish approach to assessing concurrent delay. Akenhead J stated that the primary rationale behind the English approach is that if the contract provides for an extension of time where a Relevant Event is proven to have occurred, the contractor is prima facie entitled to that extension of time, regardless of whether the contractor also has responsibility for delay. The court also stressed that even though the contract in question allowed the Architect to award a “fair and reasonable” extension of time; this did not mean the Architect was entitled to make an apportionment in cases of concurrent delay!

Correct Approach to Delay Analysis

Both parties had obtained expert reports on delay. The court heavily criticised DMW’s expert evidence (Oh dear, the danger of expert evidence), finding that their expert had analysed the situation in an overly subjective way and attributed too much weight to theoretical possibilities about what the parties might have done.

The court stated that the proper approach to take when analysing delay is as follows:

  • It is necessary to carry out a factual analysis which involves considering what critically delayed the works as they progressed. It is proportionate and sensible to carry out this task by looking at delay on a monthly basis.
  • In order to determine what is delaying the works, it is necessary to identify the longest sequence of the outstanding work.
  • It is not necessarily the case that the last item of work causes delay, so simply identifying the last delaying event prior to completion and concluding that it must have delayed the project is not correct. For example, snagging work is usually the last item to complete, but this is rarely going to be what delays the project as a whole.

Having examined the facts, the court found that WLC was entitled to a full extension of time up to the date of practical completion of the works. WLC did not have any responsibility for the delay to the project, which was all attributable to late decisions and instructions on the part of DMW and/or BLDA. An appeal I understand is being pursued, we shall see if that gets off the skids.


  • This is an extremely useful case for anyone involved in a dispute relating to delay.
  • The case confirms that the apportionment method of analysing concurrent delay which has been adopted by the Scottish courts does not apply under English law, putting aside finally any doubt about the correct approach to assessing concurrent delay.
  • It is also obliging to receive confirmation from the court of the correct approach to take when analysing delays to a project.


RIBA have released a "BIM Overlay" to the new RIBA Plan of Work. 

Recognising that BIM (Building Information Modelling) is transforming modes of working in the construction industry and that there will eventually come a point where BIM is widely accepted and used, the BIM Overlay provides clear guidance about which BIM-related activities are required at each stage of the RIBA Plan of Work to successfully design and deliver projects in a BIM environment.

The BIM Overlay builds upon the Green Overlay issued in November 2011, and both are evidence of the preparatory work being undertaken with a view to a comprehensive review of the RIBA Plan of Work due to take place in 2012-2013.


Bonfire for the Building Regulations –you cannot be serious!

I read with horror the idea government plans to ‘simplify’ the Building Regulations. The concern is of course how informed this policy really is or can be. Its rather like scrapping crash testing or type testing in the automobile industry.

Some with reason say it reflects the deadly nature of this government's obsession with slashing the regulations that protect us all, claiming without a shred of evidence that it is "health and safety gone mad" and "strangling red tape" that is killing jobs, rather than their wrong-headed economic policies.

It seems too that mandatory elements of the government's Green Deal are now expected to be made voluntary following opposition from the Prime Minister.  The proposed consequential improvements that would require homeowners to make their properties more energy efficient when carrying out home improvements may now be scrapped.

In the last few days the government has confirmed members of an industry-wide group charged with simplifying building regulations and housing standards.  Panel members leading the project are Andy Von Bradsky, an architect, Paul Watson, a planner, Kirk Archibald, a developer, and David Clemants, who specialises in building control.

The group will also look at housing standards, including the code for sustainable homes, secured by design and lifetime homes. It will report spring next year on which elements of current building regulations and housing standards it thinks should be scrapped.  The review will be led by the Communities and Local Government department and will look at housing standards including construction of stairs and the provision of drying space.

Communities minister Don Foster said: ‘I want to see a simpler set of housing standards that people can easily understand and that free up developers and councils to get on with the job of building the high quality new homes we so badly need to get more first time buyers and families onto the housing ladder.’

Angela Brady, president of the Royal Institute of British Architects, said: ‘Housing standards can and should be rationalised, to ensure they are made more accessible and easier to use. However, whilst rationalisation is important, is it critical that consumers are protected and that homes are fit-for-purpose for people, as well as viable for developers.’

Lets see what is served on this plate…

This shows the deadly nature of this government's neoliberal obsession with slashing the regulations that protect us all, claiming without a shred of evidence that it is "health and safety gone mad" and "strangling red tape" that is killing jobs, rather than their wrong-headed economic policies.

International Construction Law Conference

Last month (24 September 2012) London hosted a major International ConstructionLaw Conference at The Institution of Engineering and Technology (IET), it was a joint bash, between the Society of Construction Law, TeCSA and TECBAR.  Many of you will remember the IET building on Savoy Hill as the HQ of the IEE.  It has a magnificent historic lecture theatre which was the centre piece of the action with its original Cuban mahogany with carvings of the great and good from the electrical world such as Michael Faraday, Baron Kelvin, Ampère, Ferranti and Alexander Graham Bell.  It was the glitterati of the law that had their say this time and construction lawyers in particular.

The event was attended by The Lord Chief Justice, Lord Judge, by the President of the Supreme Court, Lord Neuberger, by the Master of the Rolls, Lord Dyson, Sir Antony May and Lord Justice Jackson now famous for his forthcoming changes to come to civil procedure and…all the London TCC Judges to name but a few who spoke. In fact judicially the current and past three Judges in charge of the TCC back to 1999 attended the event.

Active panel sessions from top lawyers around the world featured on four key areas, procurement from the perspective of what does the client want from the tribunal when challenging procurement outcomes -chaired by Mr Justice Coulson it featured lawyers and an international contractor perspective;International Advocacy chaired by Chantal-Aimée Doerries QC, Chair of TECBAR. This session went into the inner machinations of the process of effective advocacy, and witness examination. It debated the pros and cons of the adversarial and inquisitorial systems. Then a session on International Arbitration Tribunals chaired by Mr Justice Akenhead which included a fascinating debate about the conduct of construction arbitrations around the world, the importance of the choice of tribunal and the differences in approach between arbitrators from different disciplines and different cultural backgrounds; last but by no means least a spot on delay analysis – East meets West - chaired by Mr Justice Ramsey in which the death knell of the delay analyst was postulated and shot at, what fun and views from Australia to Blighty and in between, more South meets North in fact. The caliber of speaker and debate was nothing short of outstanding.

The conference included a fine Champagne reception at the Rolls Building – the new Court centre housing London’s TCC and where all the senior specialist judges who decide high value construction, business, financial and property disputes are working from a single building. The evening fittingly concluded with a splendid dinner in the Great Hall of the Royal Courts of Justice, a place that suffered its own construction delays in the 1880s!

Why do it you might ask? Well because London is the global leader in commercial dispute resolution, and is entitled to crow once in a while whether for the purpose of litigation or for dispute resolution through arbitration or mediation.English judgments are easily enforceable, not simply within the EU but also in most parts of the world, even when there are no reciprocal enforcement arrangements. Our judges have reputations for excellence, robustness, integrity and yes honesty.In general, newly-appointed judges in England have had 30 years’ experience as practitioners, arguing cases of the variety that they will now have to resolve judicially, which is why our TCC judges are so highly reputed. They are unlikely to be taken in by meagre arguments, however attractive they may appear on the surface. They know a thing or two about bonding, retention, tensile forces and checkerplate.

Also with more than 200 foreign law firms now in London it is an international legal destination par excellence.

The Rolls Building is the latest court to be constructed in the City. As a centre of excellence, it is truly 21 Century in its facilities and it now takes its place alongside another of the City’s world-famous seats of justice - the Old Bailey. It has already graced many international cases such as Berezovsky v Abramovich.

Londonalso has more international and commercial arbitrations than in any other city in the world. Ninety per cent of commercial cases handled by London law firms now involve an international party.

In England, there are now hundreds of mediators experienced in all types of disputes, both domestic and international, and construction and energy mediations are London centric too.

Flanking the many specialist solicitors and barristers who practise in London, there of course many renowned and experienced experts in all the fields in which disputes arise, including consulting engineers, mechanical and civil engineers, forensic accountants, scientists from every discipline, oil and gas technologists, specialists in computer hardware and software and yes, those delay experts.

Then of course barristers provide the vital advocacy service essential to success in arbitration and litigation, as well as a specialist advisory and case preparation services.

So that was why, we gathered a few hundred people from this industry and shared what we could do with clients, consultants, researchers, students and well you.

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