PFI meaning

This Checklist outlines a series of practical measures that a main contractor should weigh up if a sub-contractor it has appointed becomes insolvent during a construction project. It proceeds on the basis that the parties have a written sub-contract covering construction works that remain unfinished, and that the arrangement is not a PFI project. The precise response in any given case will inevitably turn on the contractual provisions between the parties and the stage the works have reached at the point of the sub-contractor’s insolvency, but this Checklist is intended to act as an initial framework for the contractor should such circumstances arise. For guidance on identifying warning signs of solvency issues and safeguarding the contractor’s position at the outset of a project, see Practice Note: Construction insolvency-how to spot problems and how to protect yourself-contractors. Where a sub-contractor has become insolvent, the contractor must act promptly to protect its financial position and to enable completion of the project with as little disruption and delay as possible, thereby avoiding exposure...

In this issue: Contract law PFI/PF2 contracts Construction industry news Daily and weekly news alerts New and updated content Construction trackers Contract law Compliance with a notification clause—does the other side know enough? (Drax v Scottish Power) In Drax Smart Generation Holdco Ltd v Scottish Power Retail Holdings Ltd [2024] EWCA Civ 477, the Court of Appeal examined the contractual rules on notices of claim. These notification provisions are commonplace in share purchase agreements and, with growing regularity, in other forms of agreement. In essence, such clauses state that, before one party can bring a claim against the other, the claimant must first serve a notice of that claim on the counterparty. Non-compliance with the notification clause can render the claim unenforceable and expose it to being struck out and/or summarily dismissed. What, then, amounts to compliance? In this matter, the Court of Appeal indicated that it is sufficient if the recipient is provided with enough information...

In this issue: Building safety Procurement in construction Arbitration Planning in construction Infrastructure projects Tax for construction lawyers Construction industry news LexTalk®Construction: a Lexis®Nexis community Daily and weekly news alerts New and updated content Construction trackers Building safety Building liability orders—‘anticipatory’ orders and adjudication decisions (Crest Nicholson v Ardmore) In Crest Nicholson Regeneration Limited v Ardmore Construction Limited [2026] EWHC 789 (TCC), the TCC handed down what seems to be only the second judgment considering an applicant’s right to a building liability order (BLO) under section 130 of the Building Safety Act 2022. The applications arose from a dispute concerning fire safety and other defects at a residential scheme in Portsmouth. The applicants asked the court to grant: (i) ‘anticipatory’ BLOs against multiple defendants, making them jointly and severally liable for any liability the first defendant may ultimately be found to owe under section 1 of the Defective Premises Act 1972, or...

Pevensey Coastal Defence Ltd v Environment Agency [2024] EWHC 1435 (TCC)) What are the practical implications of this case? This dispute is highly fact‑sensitive, largely focused on construing terms in a particular PFI contract. Nonetheless, some issues of broader interest arise from the circumstances prompting the claim and the treatment of clauses addressing adverse weather — here, the escalation in storm activity along the Sussex coast — within a PFI arrangement that began in 2000 and ends in 2025. Parties might scrutinise the Change Control Schedule wording in the judgment and decide whether to seek the same outcome recognised here (namely, that costs could be recoverable where there has been a material rise in storm incidents/adverse weather). In essence, the issue was whether the Change Control Schedule allowed recovery of extra costs from a material uptick in storm events. Similar PFI parties should review that drafting. What was the background? Pevensey Coastal Defence Limited (PCDL) and the Environment Agency (EA) entered into a PFI contract dated...

This Practice Note explores equivalent project relief (EPR) in PFI and PF2 schemes, outlining the purpose of these provisions, the composition of an EPR clause and key cases. EPR clauses usually provide that a sub-contractor may claim compensation, an extension of time (EOT) or relief from termination under the sub-contract only to the extent that Project Co has secured the equivalent remedy under the Project Agreement; in short, Project Co bears no greater liability to the sub-contractor than the Authority bears to Project Co. Note that in the 2018 Budget (delivered on 29 October 2018), the government announced it would stop using PFI or PF2 for new projects (see News Analysis: Budget 2018—what does it mean for infrastructure and housebuilding?). However, existing PFI and PF2 projects continue to run. What is equivalent project relief? To understand what equivalent project relief means, it is necessary to consider the background that prompted these clauses. As explained in Practice Note: Introduction to PFI and PF2, the structure of a...

Project documents This Practice Note offers an overview of several widely used agreements and papers in a PFI/PF2 scheme, though the precise suite adopted will turn on the particular project. In the 2018 Budget (delivered on 29 October 2018), the government stated that PF2 will not be used for new schemes (see News Analysis: Budget 2018—what does it mean for infrastructure and housebuilding?). That said, existing PFI and PF2 arrangements will remain in operation and, given the usual term of such projects, are expected to continue for many years... Project Agreement This is the core contract in any PFI arrangement. It records the full set of terms and conditions governing the relationship between the Authority and Project Co/SPV for the life of the project. Where Project Co/SPV is granted a concession (ie the exclusive right to supply/operate/exploit something to create third party revenue), the Project Agreement may be described as a concession agreement. Typically a substantial document, it is often divided into multiple sections for manageability. Under...

This Practice Note explains how a PFI or PF2 project can be terminated. It outlines the ways termination may occur, and examines the aftermath, the risks tied to bringing a project to an end, and the practicalities that parties should factor in. In the 2018 Budget (delivered on 29 October 2018), the government announced it would stop using PF2 for new projects (see News Analysis: Budget 2018—what does it mean for infrastructure and housebuilding?). Nevertheless, existing PFI and PF2 arrangements will carry on and, given the usual duration of these schemes, are expected to do so for many years. Both public and private sector participants have traditionally viewed ending a PFI as a ‘nuclear’ course, laden with risk and potential cost exposure. Yet pressure on public sector finances is considerable, and some authorities may regard terminating expensive PFI contracts as a credible option. Although termination entails dangers, the prospective benefits—leaving a politically unpopular, costly agreement and gaining greater control over service delivery—can be compelling. Specific drivers that...