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The Week That Was - 19 May 2023

Published on 19 May 2023

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

New fixed recoverable costs regime for professional negligence claims to come into force on 1 October 2023

Despite widespread opposition, professional negligence claims will be subject to the new fixed recoverable costs ("FRC") regime when it comes into force on 1 October 2023.  Under new rules published in draft by the Civil Procedure Rules Committee on 20 April 2023, simpler professional negligence claims issued on or after 1 October 2023, where £100,000 or less is sought, will be subject to the new FRC.  A new draft CPR Part 45 contains tables setting out the sums recoverable, which depend on the stage of litigation reached when the claim was determined or settled and which complexity band is assigned to the claim.  The new limits on recovering costs will apply to claims allocated to the fast or newly-created intermediate track regardless of whether the actual sums incurred by the parties are higher or lower than the FRC.  This will have a significant impact on claims valued between £25,000 to £100,000 and will give rise to new tactical considerations.

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HSE targets construction workers’ lung health with nationwide inspection campaign

As a part of the Health and Safety Executive ("HSE") campaign "Dust Kills", HSE will be carrying out inspections of construction sites across Britain throughout May, June and July.  The primary aim of the inspections is to ensure workers’ health is being protected.  The inspections will focus on dust control, checking employers and workers know the risks, how they plan their work, and if the right controls are in place.  However, if safety risks or other areas of concern are identified, inspectors will take the necessary action to deal with them.

HSE’s chief inspector of construction, Michael Thomas, said: “Every year we see construction workers die from diseases caused or made worse by their work.  This is unacceptable in the 21st century when occupational lung disease is preventable"

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Construction output increases 0.2% in March

The Office for National Statistics ("ONS") has reported that Monthly Construction Output is estimated to have increased 0.2% in March 2023.  These increases are from new work (0.7%) but are partially offset by a decrease in repair and maintenance (0.6% fall) on the month.  Four of the nine sectors saw a rise in March 2023, with the main contributors to the monthly increase seen in infrastructure new work which increased 2.2% (£51 million) and other public new work which increased 6.5% (£48 million). 

The total number of new construction orders, however, decreased 12.4% (£1,571 million) in Quarter 1 2023 as compared with Quarter 4 2022.  This fall came mainly from private housing, which fell 18.4% (£607 million) and private commercial, which fell 22.3% (£773 million) and was largely driven by falls in offices and entertainment projects. 

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Brick sales fall 32%

Forterra, a manufacturer of building supplies has announced in their pre-AGM trading update that its expectations for the year remain unchanged, following a 20% underlying fall in market demand this year with revenue for the period of £109m a decrease of 24% on the year prior.  

It reports that industry brick despatches fell 32% relative to the prior year in the three months to the end of March, as many within their customer base are reducing their current inventories but anticipate that market conditions will improve as the year progresses.

Forterra's CEO Neil Ash reports: "With the inventory reduction within our customer base still ongoing, the decline in demand we have seen in the period is greater than 20%. However, we do expect demand will improve as the year progresses, noting the improving conditions cited by the housebuilders over recent weeks."

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RICS identify a decline in potential buyers within the housing market 

House prices in the UK are still falling, but the fall is less sharp than at the end of 2022, despite the fact that borrowing rates continue to rise.
Simon Rubinsohn, RICS's chief economist says that "buyer demand still appears to be subdued in the face of relatively high borrowing costs, the prospect of at least one more interest rate hike and ongoing affordability challenges.”

Gabriella Dickens at Pantheon Macroeconomics says that “with mortgage payments likely to remain unaffordable or undesirable for many potential buyers, we expect the stock of unsold properties to continue to accumulate, until sellers reduce their prices further.”

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Supreme Court clarifies when nuisance is continuing in Jalla and another v Shell International Trading and Shipping Co Ltd and another [2023] UKSC 16

The claim was in relation to an oil spill and the High Court initially held that the nuisance alleged by the claimants could not constitute a continuing nuisance. The Court of Appeal also dismissed the claimants' appeal.

The claimants then appealed again to the Supreme Court, who dismissed the appeal on 10 May 2023.  The Supreme Court upheld that in general, a continuing nuisance was one where, outside the claimant's land, there was repeated activity by the defendant or an ongoing state of affairs for which the defendant was responsible, which caused continuing undue interference with the use and enjoyment of the claimant's land.  A continuing interference was one that went on day after day, or on some other regular basis, resulting in the cause of action accruing afresh on a continuing basis. The Supreme Court reached its decision on the basis that the leak was a one-off event; it had been stopped after six hours; there was no repeated activity by the respondents; and there was no ongoing state of affairs for which they were responsible that was causing continued undue interference.

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Thank you to Aimee Talbot, Amy Taylor and Gareth Jenkins for contributing to this week's edition.

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.

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