Jurisdiction(s):
United Kingdom

Clin v Walter Lilly: Employer’s implied due diligence duty to secure planning approvals and consequences for delay and risk allocation (England and Wales)

Published on: 20 March 2018

Published by a LexisNexis Construction expert

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Article summary

Clin v Walter Lilly & Co Ltd [2018] EWCA Civ 490, 177 ConLR 1

What are the practical implications of this case?

The ruling shows that a construction contract may carry an implied term requiring the employer to pursue planning approvals. Yet it is unlikely to amount to an unqualified duty to secure those approvals, given the inherent unpredictability surrounding approvals. In real terms, a curtailed duty on the employer to ‘use all due diligence’ to obtain approvals may leave the contractor absorbing the fallout—typically extra expense and exposure to delay damages—if a local authority behaves unreasonably. The safer course is to stipulate in the contract, in express terms, who bears responsibility for planning approvals, the scope of that responsibility, and the ramifications if approvals are not forthcoming.

What was the background?

Walter Lilly was engaged by Mr Clin to undertake demolition, refurbishment and reconstruction at a residential property in London. The parties entered into an amended JCT Standard Building Contract With Quantities 2005 (incorporating Revision 2 (2009)) in September 2012. Notably, the agreement contained no express term expressly placing a duty on either side to obtain planning approvals, nor did it clarify who would bear responsibility for such approvals...

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