Fladgate
8 Experts
7 Contributions by Fladgate
PRACTICE NOTES
This Practice Note examines how sub-contractors’ liabilities are commonly insured and considers:
difficulties that may arise with sub-contractor insurances, and
what those involved in a construction project should do.
Sub-contractor liabilities
Sub-contractor's own works
A sub-contractor is answerable for damage to its own sub-contract works. That duty stems from its obligation to carry out and complete the sub-contract works (see Practice Note: Sub-contracting in construction projects). This is a property damage exposure and is therefore insurable under a property damage policy, for example a Contractor’s All Risks policy (see Practice Note: Contractors’ All Risks (CAR) Insurance).
Remainder of the works
The sub-contractor is also responsible if its negligence, breach of contract or breach of statutory duty causes loss to the remainder of the works. That liability is a legal liability and does not derive from any proprietary interest the sub-contractor has in the balance of the works. Strictly
Construction
PRACTICE NOTES
Work in or adjacent to other buildings
An insurance contract may respond to loss or damage to property arising from an insured peril, for example buildings insurance or contractor’s all risk insurance. The peril might be an act of God, or stem from negligence. Insurance can also protect against liabilities owed at law, for instance injury, death or property damage caused by negligence. The insured occurrence must give rise to legal liability, ie a tort. Public liability policies do not extend to accidental damage unless negligence is involved. Such policies also typically exclude contractual liabilities that would not have existed but for the contract. To place insurance over a building, the proposer must hold an insurable interest in it. Usually that interest is ownership, or, for a mortgagee, a financial stake in the property. For further detail, see Practice Note: General
Construction
PRACTICE NOTES
What kind of disputes are suited to mediation?
Construction projects commonly give rise to a broad array of disagreements that are well suited to mediation:
Money-related disputes, such as non-payment of sums thought to be due, or arguments about the valuation of additional work undertaken.
Issues concerning entitlement to time, where the contractor believes it should have extra time to carry out the works, but the employer or contract administrator does not agree.
Defects in the building work. For more detail on disputes about defects, see Practice Note: Defects claims in construction.
In most building contracts, a contract administrator is appointed to manage the contract, including certifying whether the works are in delay, when the works are deemed practically complete, and when defects arising during the defect liability period have been remedied. Disagreements frequently arise over whether the contract administrator’s certification is correct...
Construction
PRACTICE NOTES
ARCHIVED: This Practice Note has been archived and is not maintained. It reviews which types of construction dispute are most amenable to mediation (and those for which it is less likely to be appropriate). It also draws attention to the benefits of mediation in settling construction disputes.
Type of dispute
Mediation can provide an effective forum for a negotiated, compromise outcome in construction disputes where:
the solution is not clearly a straightforward win for either side
there is genuine potential for compromise
both parties can recognise the risk that their arguments may fail in court
Sometimes a dispute may seem to have an evident answer, yet one party will not accept it and gives no reason. Even then, mediation can still assist. In mediation, the party unwilling to agree has the chance to share its difficulties confidentially with the mediator, which often enables the mediator to identify a middle ground that both
Construction
PRACTICE NOTES
What is non-negligent damage?
Where damage to neighbouring property stems from a contractor’s negligence or breach of contract, the contractor is liable in the tort of negligence or nuisance to the owner whose property is lost or damaged. See Practice Note: Negligence in construction.
The adjoining owner may pursue either the contractor or the employer, as the party for whom the work is undertaken. The contractor must provide an indemnity to the employer against claims for property damage caused by the contractor’s negligence or breach of contract. If the employer is sued, it can seek an indemnity from the contractor for any damages awarded.
Difficulties arise when damage to a neighbour’s property is not due to the contractor’s negligence or breach—non‑negligent damage. The issue first emerged in the 1958 case, Gold v Patman and Fotheringham, where the property adjoining the site of the works suffered damage caused by a
Construction
PRACTICE NOTES
What is a project policy?
A ‘project policy’ usually means insurance the employer arranges to cover Contractors All Risks (CAR) and public liability. It is for the employer, contractors, sub-contractors and suppliers, and applies to one named project. These are composite policies; subrogation rights between co-insureds do not exist or are waived...
What and who is covered/not covered?
What is covered?
A project policy commonly insures CAR and public liability exposures arising during the works...
What is not covered?
It will generally exclude matters that would ordinarily fall under a professional indemnity (PI) policy because:
PI is placed in a distinct insurance market; and
a project policy responds to occurrences during its term and only needs to operate for the project period.
By contrast, PI responds to claims made during the policy period. As professional liability may run for 6 or 12 years, PI must be
Construction
PRACTICE NOTES
What is terrorism?
The Reinsurance (Acts of Terrorism) Act 1993 (R(AT)A 1993) characterised terrorism as acts by persons acting for, or connected with, any organisation whose activities are directed towards overthrowing or influencing, by force or violence, His Majesty’s Government in the United Kingdom or any other government, whether de jure or de facto (section 2(2)).
The Terrorism Act 2000 (TA 2000), later amended by the Terrorism Act 2006 (TA 2006) and the Counter-Terrorism Act 2008 (CTA 2008), reframed the concept. Under this legislation, terrorism includes actions that:
involve serious violence against a person
cause serious damage to property
endanger someone’s life (other than that of the terrorist)
pose a risk to the health or safety of the public
are intended seriously to interfere with or disrupt an electronic system
The purpose behind such actions is to influence the government or an international government organisation, or to intimidate the public or a
Construction
13 Contributions by Fladgate Experts
PRACTICE NOTES
Framework agreements
Framework agreements (often called master services agreements) act as umbrella contracts setting out standard terms and conditions for goods or services procured under separate call-off contracts, frequently described as statements of work or work orders. This Practice Note centres on the use of such frameworks for the supply of services. Nevertheless, they are equally effective for any goods or services where a purchaser expects repeat requirements over time. They are also valuable when arranging the supply of goods and services across several jurisdictions. The framework can capture the overarching terms and conditions, whilst each call-off (sometimes referred to as a local enabling agreement, or a local services agreement, in that scenario) can include country-specific provisions. Framework agreements are adopted in both public and private sectors; however, public bodies must observe and comply with relevant public procurement rules when entering into
TMT
PRACTICE NOTES
Quick succession relief (QSR), not to be mistaken for taper relief, applies where a transfer of value is subjected to a further inheritance tax (IHT) charge within five years of the original gift or chargeable transfer. Consider a case where someone receives a lifetime gift (or inherits on a death) in year one, with IHT settled at that time, and in year three that recipient dies still owning the asset so it falls into their taxable estate and IHT is again due. QSR provides relief against this second IHT bill, calculated by reference to the IHT paid on the earlier transfer and the interval between the two events.
How the relief works and when it applies
Relief for successive charges, also called QSR, is available when the value of a person’s estate has been increased by a chargeable
Private Client
PRACTICE NOTES
Representative of an Overseas Business
Previously, the Representative of an Overseas Business route offered permission to enter and remain in the UK for staff of non-UK companies via two pathways:
a senior member of staff from a foreign company with no UK footprint, sent to the UK to set up the organisation’s inaugural branch or subsidiary (‘sole representative’); or
media personnel of overseas newspapers, news agencies or broadcasting organisations deployed by their non-UK employer on a long-term assignment in the UK (‘media representatives’)
Under the Statement of Changes in Immigration Rules HC 1118, the ‘sole representative’ provisions ceased to accept new applicants from 11 April 2022.
The sole representative rules within the Representative of an Overseas Business category now apply solely to individuals seeking to extend leave or obtain settlement via this route.
From the same date, the Global Business Mobility—UK Expansion Worker route was
Immigration
PRACTICE NOTES
STOP PRESS :
Further to the Autumn Budget 2024 announcement on 30 October 2024, the 100% relief for APR and BPR on qualifying property will be curtailed by a combined allowance of £2.5m with effect from 6 April 2026. Refer to section 65 and Schedule 12 of the Finance Act 2026, which amend sections 104 and 116 onwards of the Inheritance Tax Act 1984. See also Practice Notes: IHT—agricultural property relief and IHT—business property relief.
On death, an individual is regarded as having made a transfer of value equal to the value of their estate immediately before death.
Exemptions from UK inheritance tax fall into three categories:
those applying only during lifetime
those available either during lifetime or on death
those applying solely on death
Most IHT exemptions can apply to both lifetime dispositions and transfers on death, including the exemption for
Private Client
PRACTICE NOTES
A discretionary trust provides a highly adaptable type of arrangement. Under such trusts, trustees exercise discretion over when distributions are made, in what manner, and to which recipients, covering both capital and income. Beneficiaries, or a class of them, appear in the trust deed, and the choice of who among the potential beneficiaries should benefit rests wholly with the trustees, sometimes with the guidance of a letter of wishes. Accordingly, timing, method and recipient of any payments are decided case by case.
Why discretionary Will trusts are used
There are times when passing assets straight to a beneficiary under a Will is not advisable. For instance:
the beneficiary is, or in the future might become, bankrupt
the beneficiary is, or in the future might be, going through divorce
the beneficiary is disabled, needs help with managing money, or receives state benefits, where any money received directly from the estate might
Private Client
PRACTICE NOTES
This Practice Note
This Practice Note offers practical, hands-on guidance for drafting and advising on an invitation to tender within a private commercial procurement setting. It addresses, among other matters, preparation and planning, confidentiality and intellectual property, overall approach, alternative techniques, legal status, principal issues, drafting points, contractual terms and conditions, evaluation criteria, stakeholder management and cross-border considerations relevant to such procurements.
Organisations issue an invitation to tender (ITT) (also known as a request for proposal (RFP)) when they intend to solicit and duly assess a tender (or proposal) from two or more third party suppliers of defined goods or services (or a mix of both) and, thereafter, to enter into a contract with the supplier most capable of consistently delivering those goods or services at a competitive price.
This Practice Note is designed for general commercial practitioners advising business customers on procuring a wide range of
Commercial
PRACTICE NOTES
Public procurement—general principles
UK public bodies’ purchase of goods, services or works is governed by EU‑derived regulations, notably:
Public Contracts Regulations 2015 (PCR 2015) for central and local government and public bodies
Utilities Contracts Regulations 2016 for utility operators
Concession Contracts Regulations 2016 where suppliers are paid by exploiting the works or services
Framework agreements under PCR 2015 provide an efficient, flexible route to buy common or off‑the‑shelf needs and, save exceptionally, are limited to four years.
The Crown Commercial Service (CCS)—an executive agency of the Cabinet Office—aligns policy, advice and direct buying, using collective purchasing to deliver value. Its compliant frameworks include G‑Cloud 13 (cloud hosting, software and support; now extended to 8 November 2024). CCS reported £3.8bn in benefits for 2022/23.
Where needs are highly bespoke or ill‑suited to CCS frameworks, authorities may run their own procurement, typically using Cabinet
TMT
PRACTICE NOTES
This Practice Note provides guidance on the meaning, application and significance of frequently used expressions in exclusion and limitation of liability clauses in commercial agreements, including the following terms:
abandonment
wilful misconduct
deliberate default
It reviews how case law has interpreted these expressions and offers pointers for parties when drafting and negotiating commercial agreements.
What is an exclusion or limitation of liability clause?
An exclusion clause is a contractual provision that specifies what liability is excluded, sometimes described as an exemption clause. A limitation of liability clause is a contractual provision that sets boundaries on liability. Both types of clauses are controlled by statute and the common law. For an overview of those controls, see Practice Note: Exclusion and limitation of liability and for an example of a limitation provision, see Precedent: Limitation of liability clause.
What do the terms used in these types of
Commercial
PRECEDENTS
This Agreement is entered into on [ date ]
Parties
[ insert name of Supplier ] [ of, or a company incorporated in [ England and Wales ] with company number [ insert registered number ] whose registered office is at [ insert address ] ] (Supplier); and
[ insert name of Customer ] [ of, or a company incorporated in [ England and Wales ] with company number [ insert registered number ] whose registered office is at [ insert address ] ] (Customer), with each of the Supplier and the Customer being a party and, together, the Supplier and the Customer constituting the parties.
Background
The Customer carries on the business of [ insert description ] and is established in England and Wales.
The Supplier carries on the business of providing [ insert description of services ] to other
Commercial
PRECEDENTS
This Agreement is dated [ insert date ] and is made between 1 [ insert name of customer ] [ of OR a company incorporated in [ England and Wales ] with number [ insert registered number ] whose registered office is situated at ] [ insert address ] (Customer); and 2 [ insert name of manufacturer ] [ of OR a company incorporated in [ England and Wales ] with number [ insert registered number ] whose registered office is situated at ] [ insert address ] (Manufacturer), each of the Customer and the Manufacturer being a party, and the Customer and the Manufacturer are jointly the parties.
Background:
(A) The Customer Group [ manufactures, distributes and sells [ insert ] ].
(B) The Manufacturer possesses the facilities, production capacity, technical expertise, personnel, skills and experience to produce the
Commercial
PRECEDENTS
This Agreement is entered into on [ date ]
Parties
[ insert name of Supplier ] [ of OR a company incorporated in [ England and Wales ] under number [ insert registered number ] having its registered office at ] [ insert address ] (the Supplier);
[ insert name of Customer ] [ of OR a company incorporated in [ England and Wales ] under number [ insert registered number ] having its registered office at ] [ insert address ] (the Customer), and each of the Supplier and the Customer is a party and, collectively, the Supplier and the Customer are the parties.
Background
The Customer carries on the business of [ insert description ].
The Supplier is engaged in supplying [ insert description of services ] to other businesses.
The Supplier and the Customer are both members of the same corporate group.
The parties have agreed that the
Commercial
PRECEDENTS
This Agreement is entered into on [ insert date ] between: 1 [ insert name of manufacturer ] [ of OR a company incorporated in [ England and Wales ] under number [ insert registered number ] whose registered office is at ] [ insert address ] (Manufacturer); and 2 [ insert name of customer ] [ of OR a company incorporated in [ England and Wales ] under number [ insert registered number ] whose registered office is at ] [ insert address ] (Customer). Each of the Manufacturer and the Customer is a party and, together, the Manufacturer and the Customer constitute the parties...
Background:
(A) The Manufacturer manufactures [ insert ]...
(B) The Customer Group manages the distribution and sale of [ insert ]...
(C) The Manufacturer intends to manufacture and sell the Product to the
Commercial
FLOWCHARTS
This flow diagram explains the final payment process under JCT Design and Build Contract 2016; also see Practice Note: JCT contracts—price and payment...
Corporate
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