The Week That Was - 10 March 2023

Welcome to The Week That Was, a round-up of key events in the construction sector over the last seven days.

DC Bars Ltd and another v QIC Europe Ltd – determination on arbitration clause

The Court rejected an application to stay proceedings; its reasoning was that the dispute between the parties did not fall within the scope of the relevant arbitration clause. This decision has highlighted the fact that if an arbitration clause makes provision for disputes of some nature but not others, in order to refer the matter to arbitration, the nature of the dispute needs to be assessed and considered before deciding whether the arbitration clause will apply or not. 

In this case, the policy contained the following arbitration clause… "If any difference shall arise as to the amounts to be paid under this Policy (liability being otherwise admitted) such difference shall be referred to an arbitrator who will be jointly appointed in accordance with statutory provisions". The Court held that this meant the dispute could only be referred to arbitration in line with the policy if the dispute was regarding the amount of money to be paid only, and did not involve any issues as to either of the party's liability.

You can read the judgment here.
 
Building safety campaigners criticise Welsh Government decision not to adopt UK laws protecting leaseholders

Campaign group 'Welsh Cladiators' has criticised the Welsh Government for not adopting UK laws to protect leaseholders, in particular calling for ministers to put sections 116-125 of the Building Safety Act - which protect leaseholders from certain costs - into law.   Welsh First Minister Mark Drakeford has stated that "it is not as simple as simply dropping [the legislation] into the very different Welsh context" and has indicated that developers refusing to pay to fix fire safety defects could face legal action from the Welsh Government or be prevented from carrying out works in Wales in the future.   

You can read more here and here.

HS2 construction delayed in bid to cut costs

The Government is set to announce that the construction of certain parts of HS2 will be delayed in the hopes of cutting costs.  It is estimated that the delay will primarily affect sections from Manchester to Crewe and Birmingham to Crewe.  The budget for the project has been affected by the rising cost of materials and inflation.  The idea is that the delays will allow the Government to spread the cost over a longer period of time.  Mark Thurston, chief executive of HS2 Ltd, explained that the impact of inflation on HS2 has been "significant" and that they are carefully considering the timing of the project and whether they can use their supply chain to secure a lot of the things that are costing more as a result of inflation. 

You can read more here. 

Government consultation on proposed increase to planning fees

Following feedback from various sources such as the Royal Town Planning Institute (RPTI) the Government hopes to tackle the issues of lack of resource and capability which has resulted in many local planning authorities being unable to perform at the level required of them. 

The consultation recognises that increasing fees alone “is not enough to address the capacity and capability challenges faced by local planning authorities”. 

The Government has taken a three-pronged approach to the issues faced:

• Financial support – proposing an increase in planning application fees for major applications by 35% and for all other applications by 25% (as well as allowing for increases in line with inflation)
• Additional resource – in order to increase capacity and capability as quickly as possible

Improved performance –  a high quality and timely service  - new performance measures and transparency.

You can read the consultation here.

Higher-risk buildings in England must be registered with the Building Safety Regulator by October 2023

The Building Safety Regulator is an independent body established by the Building Safety Act in order to oversee the new building safety regime for high rise buildings in the UK.  The Building Safety Regulator forms part of the Health and Safety Executive (HSE). 

The HSE has confirmed that all those responsible for the safety of high-rise residential buildings (being buildings which are 18 metres tall or higher, or at least seven storeys, with two or more residential units) must register that building with the Building Safety regulator within six months from April. 

This is the first step in a package of measures to ensure high-rise residential buildings are safe for residents and users.

You can read more here.
 
LDC (Portfolio One) Ltd v (1) George Downing Construction Ltd and (2) European Sheeting Ltd

In the second reported cladding case since the Grenfell Tower tragedy, a specialist design and build cladding subcontractor, ESL, was held to be liable for losses suffered by a design and build contractor, GDL, in respect of GDL's liability in respect of defects in an external wall system.  In making the judgment, Veronique Buerhlen KC, sitting as a deputy High Court Judge in the TCC considered the scope of ESL's obligations, evaluated the claimed losses and considered the contractor's contribution claim in light of the sub-contract's express indemnity wording. 

Please see a link to the judgment here.

Disclaimer: The information in this publication is for guidance purposes only and does not constitute legal advice.  We attempt to ensure that the content is current as at the date of publication, but we do not guarantee that it remains up to date.  You should seek legal or other professional advice before acting or relying on any of the content.
 
Authors for this week's edition: Merrik Morgan, Ciara Stewart and Faye Hopton-Cottrell