Latest updates

Federal Court decision changes adjudication practice in Malaysia
  • Malaysia
  • December 18 2017

The Federal Court recently dealt with three broad issues under the Construction Industry Payment and Adjudication Act – namely, jurisdictional challenge, the exclusion of defences and the setting aside and staying of decisions. The decision has broad repercussions for the way that adjudications are conducted in Malaysia.

Regulatory changes and force majeure – impact on lump-sum and build-operate contracts
  • Switzerland
  • November 13 2017

Swiss courts and arbitrators have addressed the interface between force majeure clauses and regulatory changes, and how they impact on the contractor's entitlements. Clauses addressing unforeseen circumstances will be construed in line with the parties' actual intentions. If they cannot be established from the text and surrounding circumstances and evidence, the tribunal will construe the clause objectively, regarding how it can be understood in good faith.

No contractor liability for defects visible at final inspection except concealed defects
  • Switzerland
  • October 09 2017

Employers should keep a watchful eye on contractor variations and ensure that they do not modify any important quality or original requirements specified in the contract. Whatever the length of the contract, the employer is duty bound to notify any deviation from the contract on final inspection. However, the courts will not protect a contractor which has fraudulently concealed a defect or prevented the employer from discovering a defect.

Batten down the hatches: tips for owners and contractors affected by Hurricanes Harvey and Irma
  • USA
  • September 25 2017

Anyone watching what has happened recently in Houston and Florida will immediately think about the safety and wellbeing of those affected by Hurricanes Harvey and Irma. Once the aftermath of destruction is assessed, both areas and their residents will be looking at a long road to recovery. Among the many coming challenges, owners and contractors of existing projects must take steps to assess the effects and identify their contractual rights and obligations.

Subcontractors are winners in Supreme Court three-to-two insurance decider
  • United Kingdom
  • August 07 2017

In a recent shipping case, the Supreme Court decided by a three-to-two majority that under the applicable co-insurance scheme, the owners had no claim against the charterers, regardless of whether the insurance monies had been paid. The decision has implications for the construction industry, where this co-insurance arrangement often arises, as it could protect subcontractors which cause a loss insured under a joint names contractors' all-risks policy from a claim advanced by insurers.

Hotel developer's failure to make reservation dooms challenge to adjudicator's decision
  • United Kingdom
  • July 31 2017

The High Court recently held that a hotel developer which resisted enforcement of an adjudicator's decision, claiming that there had been a breach of the rules of natural justice, had waived its right to challenge the decision when it previously invited the adjudicator to exercise powers under the slip rule. The court noted that unless there is an express reservation of rights, decisions must be either wholly accepted or wholly contested.

New international information management standard
  • International
  • July 24 2017

A new draft international standard providing information management guidance when using building information modelling has been issued for public comment. The standard is split into two parts. The first part deals with concepts and principles and applies to the whole lifecycle of a built asset, while the second deals with the delivery phase of assets and enables the client or appointing organisation to establish its requirements for information during the delivery phase of assets.

Disputes arithmetic and the problem with oral construction contracts
  • United Kingdom
  • July 17 2017

A recent case highlighted that, because Section 107 has been "unthinkingly repealed", adjudicators must deal with entirely oral contracts and all of the uncertainty and contention that they can involve. Further, in such cases, even if an adjudicator finds an oral contract, the responding party is likely to obtain permission to defend the claim on enforcement, because only rarely will a disputed oral agreement be the subject of a successful summary judgment application.

Public sector common minimum construction standards updated
  • United Kingdom
  • July 03 2017

The 2012 Construction Common Minimum Standards for the Built Environment have been updated. The document introduces no additional standards, instead summarising existing government policy and relevant standards intended to represent the minimum normal threshold for the application of existing government policies.

Development of statutory adjudication
  • Malaysia
  • June 26 2017

The Construction Industry Payment and Adjudication Act 2012 came into effect on April 15 2014. Since then, the Malaysian courts have had the opportunity to consider various aspects of the act on numerous occasions. Some significant decisions have been handed down by the courts in the past two-and-a-half years and although statutory adjudication in Malaysia is still in its infancy, it is evident that a body of local decisions is steadily being built up to assist in the interpretation of the act.

More Joint Contract Tribunal 2016 contracts
  • United Kingdom
  • June 26 2017

Another wave of Joint Contract Tribunal 2016 contracts has arrived. The Framework Agreement, the Major Project Construction Contract, the Major Project Construction Sub-contract, the Measured Term Contract and the Prime Cost Building Contract each come with a separate guide. Further, the Constructing Excellence Contract, the Constructing Excellence Contract Project Team Agreement and the Pre-Construction Services Agreement (General Contractor), among others, have been released.

New York's scaffold law may not impose strict liability
  • USA
  • June 26 2017

The construction industry has long accepted that the New York scaffold law imposes strict liability on construction contractors and property owners for injuries suffered by workers who fall or are hit by a falling object as a result of inadequate scaffolding or similar construction structures. A recent decision by the New York Court of Appeals indicates that this common understanding is wrong.

Third Circuit holds post-petition filing of New Jersey construction lien violates automatic stay
  • USA
  • June 19 2017

The Third Circuit Court of Appeals recently filed an opinion regarding whether the filing of a mechanic's lien after the commencement of a bankruptcy case violated the automatic stay. Given the frequent involvement of many companies in Delaware bankruptcy cases, the Third Circuit's ruling is important.

When a court might not enforce an adjudicator's wrong decision
  • United Kingdom
  • June 12 2017

If an adjudicator's decision is within his or her jurisdiction and broadly in accordance with the natural justice rules, it will be enforced. However, there are two narrow exceptions: where there is an admitted error which the court can correct; and where a case involves the proper timing, categorisation or description of a payment application or notice, or payless notice.

Slip rule cannot rectify adjudicator error
  • United Kingdom
  • May 22 2017

In a recent case before a Scottish court, an adjudicator made a mistake in the calculations in his decision. The slip rule introduced in the amended Scheme for Construction Contracts allows for the correction of "a clerical or typographical error arising by accident or omission", but the court ruled that it did not apply in this case. However, could a similar slip rule be implied and, if so, would it permit the inclusion of the items that had been left out?

CIC publishes new User's Guide to Adjudication
  • United Kingdom
  • May 15 2017

The Construction Industry Council has produced a new User's Guide to Adjudication to replace the Construction Umbrella Bodies Adjudication Task Group's 2003 version. The updated guide provides a general introduction to adjudication in the context of construction contracts.

Court of Appeal confirms DOM/2 extension of time is an add-on
  • United Kingdom
  • May 08 2017

A recent Court of Appeal decision has confirmed that an extension of time under the DOM/2 form of subcontract should follow immediately after the current completion date rather than standing on its own at the time that the relevant event occurred. While the consequence of the contiguous approach in this case was unusual, anomalies of this kind do not displace the natural meaning of the extension of time clause, which is practicable and workable.

Why understanding economic loss doctrine is critical for construction professionals
  • USA
  • May 01 2017

The economic loss doctrine is widely misunderstood and often misapplied. At its most basic, the premise of the doctrine is that a party cannot recover purely economic losses in a tort action. While simple in theory, the economic loss doctrine has suffered from wide variations in application – for example, states are split about whether the economic loss doctrine bars third-party claims against design professionals.

Valid change orders can amount to breaches of employer's ancillary obligations
  • Switzerland
  • April 10 2017

Employers typically have the power to vary works, including by making changes to the sequence or timing of their execution. Sometimes, these variations do not entitle the contractor to additional remuneration. However, as confirmed by a recent Federal Supreme Court decision, even a change order that is permitted under a contract could result in a breach of the employer's ancillary obligations and therefore give rise to a right to compensation.

The case of the vanishing non-completion certificate
  • United Kingdom
  • March 06 2017

Under a Joint Contracts Tribunal 2011 Intermediate Contract, completion was delayed and the contract administrator issued a certificate of non-completion. The employer later issued a payless notice and deducted liquidated damages; however, the contractor objected. The judge agreed, as a condition for deducting liquidated damages had not been met and they therefore could not be deducted.

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