The Week That Was – 20 August 2021

20 August 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.

Review of Architectural Regulation
The Ministry of Housing, Communities and Local Government (MHCLG) has opened a consultation on the regulatory framework and role of the Architects Registration Board (ARB). 

This review has been prompted by the report of Dame Judith Hackett concerning reforms to building safety in response to the Grenfell Fire tragedy, as well as government plans to amend the Architects Act 1997 to ensure greater competence amongst UK registered architects.  The review also addresses implications of the UK's exit from the European Union and the possibility of recognising international architects independent of European Union Law.

The review aims to ensure that the Government provides suitable support to the UK's architectural sector and advances the aims of providing a modern, innovative and diverse profession that delivers better, greener and safer design and construction.

The call for evidence can be accessed here.

Osborne sells infrastructure arm

Geoffrey Osborne Limited is selling its civil engineering division, Osborne Infrastructure Limited, to the private equity firm Sullivan Street for an undisclosed sum.

Osborne Infrastructure Limited undertook projects across rail, highways and transport hubs under relationships with Network Rail, Highways England and Transport for London.  Sullivan Street has said that Osborne Infrastructure will continue under its current management team.  Meanwhile, Geoffrey Osborne Limited has said that the sale will allow it to prioritise its investments and focus on the residential and education sectors.
The sale is due to complete on 10 September 2021.

More details can be found here.

Green £320m skyscraper planned for the City

Plans have been submitted for a new 23-storey, 117-metre tall office building in Houndsditch.  Designed by architects, AHMM, and intended to set a benchmark for sustainable buildings, the building is to deliver "exemplary green credentials" with "health and wellbeing at its core".  The building is reported to feature green balconies, large roof terraces with trees and innovative sustainable technologies to reduce on-site carbon emissions.  The potential for recycling the existing building’s steelwork frame and processing clean concrete back to aggregate for concrete construction is reportedly also being explored.

Work on site, including demolition of the existing building, is expected to take approximately four and a half years with some 660 workers being employed during construction.

To read further, please click here.

Tender prices forecasted to rise by 21%

BCIS forecasts that tender prices are to rise by c.21% over the next five years, driven by increases in the cost of materials and longer supply times arising principally as a result of the pandemic.  New construction output is forecast to increase by 15% during the same period. However, with fewer contractors in the market to take on this additional work as a result of recent liquidations and decreased access to European labour, the BCIS forecasts pressure on site rates and tender prices. 

Material costs are also forecast to rise by some 15% during the same period as a result of difficulties in obtaining materials during the pandemic, increased tariffs on imports and oil prices.  This has led the Construction Leadership Council to call for new contract clauses to allow for sharing the risk of sharp increases in material costs.
Further information regarding the forecast is available here.

Pay now, argue later: no right to set-off against adjudicator's decision

In Davis Construction (South East) Ltd v Sanzen Investments Ltd [2021] EWHC 2216 (TCC) (12 July 2021), the claimant sought to enforce an adjudication decision that it was due £162,000 on its final account.  The defendant argued that the application should be adjourned or stayed because it could set-off the final account claim against its counterclaim for defective work.

Applying Squib [2012] EWHC 1958, and RWE Power [2009] EWHC 1192, the judge held that, with a few limited exceptions, a party cannot seek to avoid the consequences of an adjudicator's decision by exercising a set-off.  The contract did not include a right to set-off as an exception to the application of the adjudication provisions of the Scheme for Construction Contracts 1998 (incorporated into the contract).  The counterclaim defence had not been raised in the adjudication.  Even if the counterclaim was potentially valid, there were no grounds to stay execution or not to award summary judgment.

For the judgment, see here (the judgment is not available publicly).

Highways England accelerates switch to lower carbon asphalts

Highways England is asking those involved in the construction and maintenance of the Strategic Road Network (SRN) to utilise warm mix asphalts (WMAs) as standard.  If all production in the UK switched to WMAs, it would save around 61,000 tonnes of CO2 a year, the equivalent of cutting around 300 miles of car journeys.  It would also save up to £70m a year and can be recycled back into new asphalts, preventing waste.

Benefits include carbon reduction (compared to hot mix asphalts), increased productivity (more material can be laid within a given period), improved health and safety, and improved durability (requiring less maintenance in the future).  WMAs account for 40% of asphalt production in the US and 15% in France, but only 4% in the UK.  The plan aims for net zero road maintenance and construction by 2040 and net zero carbon travel by road by 2050. 

For more, see here and here.


Thank you to Felicity Strong, Alastair Stewart and Paul Smylie for contributing to this week's edition.

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