Construction newsletter July 2018
What challenges does the construction industry face and what does the future hold?
The annual rate of house price growth has continued to slow. Nationwide reported that house prices in London fell by a further 1.9% in Quarter 2. If this trend continues, a likely outcome will be a rise in the number of overvaluation claims against surveyors. To help protect against such claims, surveyors carrying out valuations would be well advised to make the scope of those valuations clear. This includes expressly stating who can rely upon the valuation, on what it is based and for how long it is valid.
The Committee on Climate Change’s annual report, published on 28 June 2018, asked Government to support unrealised cost-effective options, including utilising onshore wind and solar energy and improving energy efficiency in buildings. The proposed actions include strengthening new build standards, using heat pumps in new build homes and insulating properties.
We have previously reported an increasing number of claims based on allegations that cavity wall insulation has been installed in properties for which it is not suitable. Claimant solicitors are likely to be watching out for other wide-spread energy saving measures that may work in some properties and not others. Whilst a renewed focus on the energy sector could be an area of growth and opportunity for the construction industry, it is important that only those with the appropriate expertise provide advice. Contractors and insurers will want to be vigilant to the possibility that new entrants to the market may not have sufficient expertise and that new technologies often pose a higher risk of failure.
The Court has heard a couple of key cases that focus on oral construction contracts. These are further discussed in the newsletter below. On a practical note, we often see claims stemming from unclear terms of engagement or a lack of written terms. Both contractors and consultants would be prudent to ensure that their contracts are unambiguous, fully recorded in writing and based on an appropriate level of legal advice.
Explore more of the hot topics making headlines or download the full newsletter.
In the news
Contribution claims – a tip for the future
Accept certain inalienable truths: prices will rise, politicians will philander and contribution claims will continue to crop up in construction litigation. Read more.
Oral variations can leave you between a Rock and a hard place
Variations to contracts, whether the scope of the works or services to be performed or the terms under which those works/services are provided, are common place in the construction industry. Read more.
Talk isn’t always cheap: oral contracts in the construction industry
The recent case of Dacy Building Services Limited v IDM Properties LLP  EWHC 178 (TCC) highlights how the TCC dealt with the issue of an oral construction contract. Read more.
SSE Generation Ltd v Hochtief Solutions AG and another  CSIH 26
This recent case considered the principles in the Supreme Court case of MT Højgaard A/S (Respondent) v E.On Climate & Renewables UK Robin Rigg East Limited and another (Appellants). Read more.
R.G. Carter Buildings Limited v Kier Business Services Limited  EWHC 729 (TCC)
The Court has given guidance on when time starts to run for contribution claims. Read more.
Redbourn Group Ltd v Fairgate Developments Ltd  EWHC 658 (TCC)
The Technology and Construction Court has considered issues of causation and loss in a decision arising out of the wrongful repudiation of a consultant’s contract. Read more.
Haberdashers’ Aske’s Federation Trust v Lakehouse Contracts  EWHC 588 (TCC)
To what extent does a subcontractor become a party to a Contractors’ All Risks insurance policy which is in place before the subcontractor is engaged and what right do Insurers have to pursue subrogation claims against sub-contractors on a project? Read more.
What’s on the horizon?
It’s been a couple of years but we are still waiting for the implementation of BIM Level 3. Read more.