Construction Risks Newsletter - August 2020

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Construction Risks Newsletter - August 2020

Published 28 August 2020

DAC Beachcroft's Construction Risks Newsletter features topical issues in construction

Welcome to the August 2020 issue of DACB’s Construction Risks Newsletter. We review the highly anticipated Supreme Court decision in Bresco v Lonsdale and the implications for Insolvency Practitioners working in the construction industry. Given the state of economy and issues regarding Brexit and Covid-19 there has been a huge increase in the number of construction companies being placed into forms of Insolvency. Bresco appears to give Insolvency Practitioners a lifeline to use adjudication to recover alleged debts owed to insolvent companies.

Adjudication case law remains a prevalent part of Technology and Construction Court’s business, with a number of new pieces of law. In this edition we also review cases concerning architects’ duties to third parties and the Court’s latest guidance on payment mechanisms. We have also included an overview of the HSE’s recent report, with a highlight on the construction industry.

Finally, and in light of the current economic climate, a word from our tax team about how to get staff motivated as we return to normal working.

Valley Brook Investments: A further broadening of professionals’ duties?

In Valley Brooks Investments (1) & Andrew Mines (2)  v Huam Limited [2020] the Court found that a professional can owe a duty of care to a party which was (i) unknown to the professional and (ii) unincorporated when the professional’s services were provided. 

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Kew Holdings Ltd v Donald Insall Associates Ltd: There’s no arguing until you pay-up

This case confirmed that the Claimant’s proceedings be stayed until it paid sums due pursuant to an Order enforcing an adjudicator’s award (the “Enforcement Order”). The Claimant was also required to  pay sums into Court by way of security for costs.

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Novel argument failed to prevent enforcement of an adjudicator’s decision

In WRW Construction Ltd v Datblygau Davies Developments Ltd [2020] EWHC 1965 (TCC) the court considered whether to enforce an adjudicator’s award in circumstances where the adjudicator did not have jurisdiction to order payment of the award.

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Construction adjudication is not incompatible with the insolvency process

The highly anticipated Supreme Court decision in Bresco Electrical Services Ltd (in Liquidation) v Michael J Lonsdale [2020] UKSC 25 has endorsed the use of adjudication in the context of insolvency set off, substantially reversing the decision of the Court of Appeal.  

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Final Date for Payment: Time to revisit Payment Terms

1. In Rochford Construction Ltd v Kilhan Construction Ltd [2020] EWHC 1947 (TCC), the Court confirmed, albeit on a obiter basis, that linking the final date for payment in a construction contract to the due date would provide an adequate mechanism for determining when the payment becomes due.

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HSE Annual Report

The Health and Safety Executive (HSE) has recently published its annual report detailing its performance over the year.

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How to motivate staff (and Founders) as we return to normal?

It doesn’t take a genius to work out that pretty much every business has been shaken to its core, to some degree or another, over the last few months.

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Authors

Mark Roach

Mark Roach

London - Walbrook

+44 (0)20 7894 6314

Harriet Hawkins

Harriet Hawkins

London - Walbrook

020 7894 6106

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