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UK Supreme Court: collateral warranties not ‘construction contracts’ under HGCRA 1996; no statutory adjudication unless separate obligations; Parkwood overruled (Abbey Healthcare v Augusta 2008)

Published on: 10 July 2024

Published by a LexisNexis Construction expert
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Abbey Healthcare (Mill Hill) Ltd v Augusta 2008 LLP (formerly Simply Construct (UK) LLP) [2024] UKSC 23

What are the practical implications of this case?

The court considered whether a contractor’s collateral warranty qualifies as a ‘construction contract’ under HGCRA 1996, s 104, thereby conferring a statutory right to adjudicate under HGCRA 1996, s 108. That status depended on whether the warranty was a contract ‘for... the carrying out of construction operations’ within HGCRA 1996, s 104(1)(a). The decision confirms that:

  • a collateral warranty will only be a construction contract under HGCRA 1996, s 104(1)(a) where the contractor undertakes to the beneficiary an obligation to perform construction operations that is separate or distinct from its obligation to do so under the related building contract (or other appointment)
  • a collateral warranty that simply warrants the contractor’s performance of its obligations to the employer under the building contract is not a contract for the carrying out of construction operations...

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