Construction Risk September 2017

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Construction Risk September 2017

Published 5 September 2017

A reminder to employers of the importance of carrying out a proper assessment of sums due

Leslie v Farrar Construction Ltd [2017] EWCA Civ 1041

The court has provide employers with a reminder of the importance of carrying out a proper assessment of sums due and owing to a contractor as part of the final account process before making payment. The court will not protect an employer by ordering that sums paid at final account stage be repaid notwithstanding the fact that they were made by mistake without proper scrutiny of the sum due under the contract.

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Construction Professionals: The existence of a duty of care where there is no underlying contract

In the recent decision of Lejonvarn v Burgess [2017] BLR 277, the Court of Appeal confirmed that a project manager/architect who had carried out professional services gratuitously will, in the absence of a contract, owe a common law duty of care to carry out such services as are actually provided with all reasonable skill and care and for economic loss.

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Interpretation of fitness for purpose obligations under Design and Build contracts

Construction contracts are frequently complex documents that incorporate a number of individual documents and specifications which taken together set out the standards to which the contract works must be carried out. In the recent case of 125 OBS (Nominees1) v Lend Lease Construction (Europe) Ltd [2017] EWHC 25 (TCC), the court was asked to interpret a number of contractual documents in order to determine which of (what was contended to be) two competing contractual standards of workmanship, governed the standard of work to be undertaken by the contractor.

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Supreme Court - subrogation between joint insureds

In the recent decision of Gard Marine & Energy v China National Chartering, the Supreme Court decided that an insurer had no right to pursue a subrogated claim against a party (and co-insured) having regard to the terms of the underlying contract.

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Northern Irish High Court sheds significant light on how to assess compensation events under an NEC 3 contract

The recent Northern Irish High Court decision in Northern Ireland Housing Executive v Healthy Buildings (Ireland) Ltd [2017] NIQB 43 has shed significant light on how to assess compensation events under an NEC 3 contract where the compensation event is being retrospectively assessed. In a telling judgment, Deeny J noted, "Why should I shut my eyes and grope in the dark when the material is available."

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The Court of Appeal finds that an exclusion clause in an engineering services contract excludes liability for failing to identify and report on asbestos at a site

The Court of Appeal has found, unanimously dismissing the appeal, that an exclusion clause in an engineering services contract was effective such that it excluded liability for failing to identify and report on asbestos at a site. The reasoning of a Court of Appeal was that the clause was clear and made commercial common sense. On that basis, the canons of construction relating to exclusion clauses were rejected. Persimmon Homes Ltd and others v Ove Arup & Partners Ltd and another [2017] EWCA Civ 373.

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Who benefits when a party's mitigation of its loss leads to a profit?

Globalia Business Travel S.A.U. (formerly TravelPlan S.A.U.) of Spain v Fulton Shipping Inc of Panama [2017] UKSC 43.

This is a shipping case concerning the account to be given in a damages claim where the early determination of the charter of a vessel appeared to be the cause of a sale at what was ultimately a significant profit.

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NEC4 - "evolution not revolution"

This article sets out what you need to know about the changes in the new suite of NEC4 contracts published on 22 June 2017, and how to negotiate and operate under NEC4.

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Allocation of Risk and Fitness Purpose revisited by the Supreme Court

MT Højgaard A/S v E.ON Climate and Renewables UK Robin Rigg East Limited

The Supreme Court has recently considered whether the employer or contractor under a design and build contract had assumed the risk for defects in the design of the foundations of 60 offshore wind turbines, and the consequent cost of remedial works amounting to €26.56m, where the defects were the result of errors in an internationally recognised engineering specification expressly incorporated into the terms of the contract, and not the result of any negligence on the part of the contractor.

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The common scenario

IMI Kynoch Limited and others v. Delta Limited and others.

The Court of Appeal considers what happens when a contractor settles with an employer.

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