Outside view of RPC's transparent glass building.

The Week That Was - 8th October 2021

08 October 2021. Published by Ben Goodier, Partner and Sarah O'Callaghan, Senior Associate

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

Croda Europe Limited v Optimus Services Limited [2021] EWHC 2606 (TCC)

Croda, having successfully enforced an adjudicator's decision against Optimus, sought to recover its costs, being £45,078 in respect of the action and enforcement hearing, and £11,862.50 incurred since the judgment. 

Optimus argued that the amounts claimed were excessive, relying on Allied P&L Limited v Paradigm Housing Group Limited where it was held that the claimant was only entitled to recover £20,500 in respect of the costs of enforcing an adjudicator's decision.  In that case, Akenhead J said that it was rare in the TCC in London for an adjudication enforcement application to cost more than £15,000-£20,000.

The judge stated that, as it was 11 years ago, that case was of limited assistance, and awarded Croda £42,578 plus its costs since judgment, noting that these were not out of line with the costs commonly incurred for adjudication enforcement actions.

The full judgment is available here.

nmcn to enter administration

nmcn (formerly known as North Midland Construction) is to enter into administration after its board of directors announced that it was no longer able to continue trading as a going concern.  It had sought to recapitalise through a £24m fundraising agreement with Svella plc and by seeking to raise a further £5m through an open offer to existing shareholders.

In order to finalise these arrangements, nmcn needed to publish its audited financial statements for the year ending December 2020.  However, preparation of its accounts revealed further underlying issues, with expected losses rising to £43m, meaning its approved audited accounts could not be completed.  Accordingly, the agreement with Svella plc and the open offer to existing shareholders were cancelled.

nmcn confirmed that it had received offers for the acquisition of certain trading operations or subsidiaries.

The full statement to the stock exchange is available here

Companies bidding for major government contracts will have to commit to achieve net zero emissions by 2050

On Thursday, 30 September 2021 the Cabinet Office announced that all companies bidding for government contracts worth more than £5 million a year must commit to achieving Net Zero emissions by 2050. 

Companies bidding for government contracts greater than £5 million per annum will have to provide a Carbon Reduction Plan confirming the supplier's commitment to achieving Net Zero by 2050 in the UK, setting out where their emissions come from, and the environmental management measures that they have in place and which will be in effect and utilised during the performance of the contract. 

For further information, please click here.

Construction Leadership Council asks Government to stick to spending commitments for major projects

The Construction Leadership Council (the CLC) has issued a letter to the chancellor, Rishi Sunak, ahead of the Spending Review later this month, asking the Government not to cut previous spending commitments on major projects in light of the COVID-19 pandemic. 

The CLC stated it was "under no illusions" regarding the need to rebuild the nation's finances following the pandemic and that, as a result, this Spending Review is unlikely to bring an opportunity for major new construction programmes.  However, the CLC asks that the Government sticks to its previous spending commitments including in respect of HS2, the New Hospital Programme, the Priority Schools plans and flood defences. 

The CLC also encouraged the Government to focus on retrofitting the UK's building stock, pledging to unlock £500m of investment from construction firms for the programme to improve the energy efficiency of the country's buildings.

For more information, see here.

Gove fails to mention planning reforms in keynote address to the Conservative Party conference

Despite reports that Michael Gove, the new housing secretary, has demanded a complete rethink on planning reforms, he failed to mention planning in a keynote address to the Conservative Party conference in Manchester, and mentioned housing only once. 

The controversial planning white paper was not mentioned in the secretary's speech.  However, Mr Gove's reference to "allowing communities to take back control of their futures" when discussing the Government's levelling up agenda has been read as an indication that the centralising proposals in the white paper, such as the removal of the ability to stop individual planning applications in growth areas from being approved and mandatory local housing targets, will not be proceeding. 

When addressing housing, Mr Gove commented that the Government will invest in urban regeneration to put new homes on brownfield sites, while also helping more renters to own their own homes. 

For more information, see here

The HSE publishes information on safety case requirements under the Building Safety Bill

The Health and Safety Executive (HSE) have recently published guidance on the detailed safety case requirements which form part of the  measures introduced by the Building Safety Bill.  While the HSE note that the requirements may not make it into law, or be altered before implementation, they invite parties to adopt the measures now in anticipation of their eventual adoption into law. 

The proposals aim, amongst other things, to ensure that buildings in England are designed and constructed to be safe and of a good standard and are managed in such a way that people are protected from the spread of fire or structural failure 

Responsible parties, being those who manage or are responsible for high-rise residential buildings will have to take steps to ensure that:

  • their buildings are safe; 
  • a safety case is put together; 
  • a safety case report is put together.

The safety case approach is intended to ensure that responsible parties adopt measures that are proportionate and effective and ensure that people in and around any high-rise residential building remain safe. 

For further information please click here

Thank you to Harry Collins, Jonathan Carrington and Paul Smylie for contributing to this week's edition.