The Week That Was - 4 November 2022

Published on 04 November 2022

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

COVID-19: Business interruption cases

The High Court has handed down a ruling on three related COVID-19 business interruption cases in a hearing on preliminary issues.  The three cases were: Stonegate Pub Company Limited v MS Amlin Corporate Member Limited and others; Various Eateries Trading Limited v Allianz Insurance plc; and Greggs plc v Zurich Insurance plc, all of which involved issues arising from the Marsh Resilience Form and how the policy in each case responded to business interruption losses occasioned by the COVID-19 pandemic.

In summary, for all three cases, it was held that business interruption losses aggregate around major government action, and a narrower approach to causation of losses than that advocated for by policyholders should be adopted.  Butcher J also concluded that credit should be given by policyholders for furlough payments.

Please read the judgment here.

Gove returns to DLUHC as Sunak reshuffles cabinet

Michael Gove has been reappointed as Secretary in the Department for Levelling Up, Housing and Communities (DLUHC) as part of Rishi Sunak's cabinet reshuffle.  Mr Gove was removed from the role in July by former Prime Minister Boris Johnson.

Mr Gove was previously instrumental in steering the Building Safety Bill through Parliament.  He also sought to compel major housing developers to commit a minimum of £2bn to agree to carry out cladding remediation work on buildings over 11m high, and for the industry to pay a further £3bn over 10 years through the Building Safety Levy, threatening that companies that failed to commit to the pledge could be blocked from building or selling new homes.  Since his re-appointment, Mr Gove has announced the Government remains committed to building 300,000 homes every year by the mid-2020s, despite the rising costs of material and labour.  

Please read more here.
Sunak to tackle low productivity with investment in education system

Rishi Sunak is set to impose reforms to the British educational system in order to tackle low productivity and the construction industry's skills shortage. 

A proposed "British baccalaureate" and new network of technical colleges are set to place academic and vocational pathways on more of an equal footing.  A network of elite technical colleges will be established which will be closely linked to industry, with apprentices and T-levels in engineering and digital technology being prioritised. 

Gillian Keegan, who is a former automotive apprentice, has been appointed as the new education secretary to spearhead the reforms. 

Please read more here

Infrastructure unfit to cope with climate change

A recent report by government advisors sets out the dangers posed by the changing climate.  Sir John Armitt, the National Infrastructure Commission chair, has called for a more strategic and joined up approach to resilience of key infrastructure.  Armitt has called for the rapid publication of the significantly delayed national resilience strategy, a document which will outline how Britain’s critical national infrastructure can better withstand extreme weather events. 

The report by the joint select committee on the national security strategy found there had been an “extreme weakness” at the centre of government on the issue, described as a critical risk to the UK’s national security. The United Nations Secretary-General, António Guterres, has recently warned countries of the need to prioritise climate change, and not let it remain an issue "on the back burner". 

A copy of the select committee report can be found here
Insurance credit surge following cost of living and energy bill crisis

New research shows that following the cost-of-living crisis and the recent energy bill increases, there has been an increase in borrowing to fund insurance policies.  A study found that 40 percent of customers who use credit to pay for one or more insurance companies borrowed more than they had in the previous 12 months for the same purpose.  When asked why this was the case, it was confirmed that 34 percent had increased borrowing because their spending in general had increased, and 23 percent of those surveyed blamed energy bills for needing to borrow more. 

Adam Morghem, Premium Credit’s Strategy, Marketing & Communications Director said: “Rising interest rates, the cost-of-living squeeze and eye-watering energy bills are having a major impact on how people pay for insurance with rising numbers borrowing more to ensure they keep important cover, but not always considering the most efficient payment options available to them".

Please read more here. 

Incorporation of mental health into contracts

Last year, a survey suggested that one in five self-employed workers and those who work in small firms live with “elevated levels of anxiety”.  Work-related stress has been a major reason given for this, along with the COVID-19 pandemic’s impact on the construction supply chain.  A parliamentary group has advised that details of contractors' mental health provisions should now be written into contracts to tackle a national emergency within the sector and ensure that a greater focus is placed on wellbeing of workers so that it is "on par with health and safety compliance".  

Sarah Meek, the managing director of the mental health charity Mind, said that "including sections on mental health in procurement documents would further support mental health best practices".

Please read more here.

Thanks to Charlie Underwood, Ciara Stewart and Lauren Kerr 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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