Legal Practice Notes

Environmental insurance provides a practical route to managing environmental risks that stem from work undertaken by contractors and consultants. For general guidance on environmental insurance, refer to the following Practice Notes: Environmental insurance—when is it needed? Environmental insurance—extent of coverage Environmental insurance—types Environmental insurance—advantages and disadvantages Scope of activity For the purposes of this note, contractors and consultants are parties engaged to deliver work on a client’s behalf. Contractors typically carry out the works, while consultants may undertake design or investigative tasks. Although these activities are relevant to contaminated land consultants and contractors, the potential scope is much wider, including: architects who may produce a design for fuel storage a foundation and earthworks contractor who may disturb soils, and internal fix contractors who may handle chemicals (even glue) in confined...

Purpose of environmental searches and investigations Environmental investigations are undertaken for a range of reasons. The price, depth and scope of any study will shift according to its objective. In general, outputs from desk-based reviews through to intrusive works are intended to deliver qualitative and/or quantitative risk evaluations, considering potential effects on human health, buildings and services, ecological receptors, or controlled waters. Searches and investigations also enable parties to land transactions to proceed fully informed about legal liabilities that may arise from historic or current uses of the land. The breadth of an investigation is shaped by the deal terms, the client’s risk appetite, the budget, and the site’s characteristics and environmental context. Typically, an investigation is commissioned: to clarify liabilities under a range of regimes and laws, including: the...

Versions of the National Planning Policy Framework ( NPPF) The first National Planning Policy Framework took effect in England on 27 March 2012, with immediate effect, supplanting all Planning Policy Statements and Planning Policy Guidance Notes, save for PPS10 ( Planning for Sustainable Waste Management, which was subsequently replaced by the National planning policy for waste). Its purpose was to streamline and make the planning system easier to navigate, safeguard the environment, and encourage sustainable growth. Archived Practice Note: The 2012 National Planning Policy Framework [ Archived] sets out an overview of the principal policies in the 2012 NPPF. A substantially reworked NPPF was issued in July 2018. It was quickly recognised that additional amendments were necessary to the 2018 NPPF, resulting in a revised edition published in February 2019. In February 2021, the government consulted on proposed changes to the NPPF to take...

ARCHIVED: This Practice Note is archived and is not maintained. It reviews the Building Schools for the Future government initiative together with the current Priority School Building Programme, and examines the construction contracts adopted as well as the negotiation issues commonly encountered in practice... Building Schools for the Future Building Schools for the Future ( BSF) was a Labour-led programme announced in 2003 by the Department for Education and Skills (which later became the Department for Education, or DFE), and it launched in 2004. Its purpose included, among other objectives, delivering a step change in children’s education by upgrading facilities, property and learning environments across local secondary schools. BSF was intended to be financed by a £55bn investment to improve schools over a 15–20-year period. Delivery was co‑ordinated nationally by Partnerships for Schools, set up by the DFE as both a company and a...

As set out in Practice Note: Building Safety Act 2022—key provisions and issues, the BSA 2022 brought in a stringent system of building control and allied legal obligations for ‘higher-risk’ buildings ( HRBs). For guidance on which assets are HRBs, see Practice Note: Building Safety Act 2022—what is a higher-risk building? Much of the operational detail is contained in the Building ( Higher- Risk Buildings Procedures) ( England) Regulations 2023, SI 2023/909 (the HRB Regulations). In tandem, the Building Regulations etc. ( Amendment) ( England) Regulations 2023, SI 2023/911, made under the BSA 2022, insert a new Part 2A into the Building Regulations 2010, titled ‘ Dutyholders and Competence’. Part 2A establishes defined dutyholder roles on construction schemes, prescribes the obligations they must observe, and sets competence standards for individuals and organisations eligible to act. Those obligations are directed at ensuring that, once...

ARCHIVED: This Practice Note is archived and not kept under review. The design and construction phase duties under the higher-risk building ( HRB) regime took effect on 1 October 2023, following a suite of secondary legislation laid by the government in August 2023. That legislation sets out transitional provisions identifying which HRB-related construction schemes must comply with the HRB regime’s regulatory requirements, and which continue under the previous building control regime and building regulations. A central element of these transitional rules is that, where parties notified a building control authority of proposals for HRB works before 1 October 2023 and then confirmed the works had ‘sufficiently progressed’ before 6 April 2024, those works are excluded from the HRB regime’s design and construction phase obligations. This Practice Note provides direction on the transitional provisions and the points parties need to assess when deciding whether their...

This Practice Note examines when the Housing Grants, Construction and Regeneration Act 1996 ( HGCRA 1996) is engaged on UK energy projects and highlights practical issues that can arise. It should be read together with Practice Note: What is a construction contract under the HGCRA 1996? The HGCRA 1996 applies to all construction contracts, as defined in the Act, across the following jurisdictions: England Wales Scotland When drafting a contract, parties should assess whether the on-site works fall within the scope of the HGCRA 1996 and, if so, ensure the terms are compliant. This discussion frequently surfaces on energy schemes where some or all elements of the works may sit within the statutory exclusions... Does the HGCRA 1996 apply to energy projects? For the HGCRA 1996 to apply, the agreement must meet the definition of a ‘construction contract’ in section 104—being a...

Background An energy asset’s output, together with the project’s capacity to achieve the contracted power generation and income, will generally ultimately set the level of investment that a funder is prepared to commit. For employers and funders alike, it is essential that the construction contract embeds suitable testing, take-over and defects processes, so that the project yields optimum power and revenue, and any shortcomings affecting those outcomes are detected and addressed at the earliest possible stage of the delivery period. This Practice Note examines why testing protocols and defect remedies within the FIDIC Silver Book, and other widely adopted energy sector contracts, matter, and highlights the practical issues that must be weighed when structuring and executing energy projects successfully. For fuller overviews of the FIDIC Silver Book, refer to Practice Notes: FIDIC...

An energy performance certificate ( EPC) An EPC assigns a property an energy efficiency band from A (most efficient) to G (least efficient). The rating arises from a complex calculation that examines multiple elements, including the building’s age, type and method of construction, together with its insulation and heating systems. For further details on what an EPC is and when it is required, see Practice Note: Energy performance certificates ( EPCs)—what are they and when are they required? The principal rules governing EPCs are the Energy Performance of Buildings ( England and Wales) Regulations 2012, SI 2012/3118 ( EPC Regs 2012) (as amended), and the Building Regulations 2010, SI 2010/2214, which implemented the requirements of the recast Energy Performance of Buildings Directive 2010/31/ EU (recast EPBD directive). The EPC Regs 2012 apply to all buildings in England and Wales. Before the 2012...

Energy projects involve a blend of perceived and actual risks that affect cash flow, availability, performance and profit, and they shape investment choices. These risks arise from environmental, technological, financial, political and commercial factors, depending on the nature of the energy project. To secure a viable, bankable energy project, it is vital to identify, confront and mitigate such risks as far as possible. This Practice Note examines the perceived and real risks confronting energy projects, the allocation of design responsibility under the FIDIC Silver Book 1999 and 2017 editions (an engineering, procurement and construction ( EPC) contract widely used on energy projects), and practical approaches to reducing risk on an energy project. For a fuller introduction to the Silver Book, see Practice Notes: FIDIC contracts—introduction to the Silver Book 1999 and FIDIC...

Disagreements in the energy arena can be highly intricate. Owing to project locations, the parties’ nationalities, and the choice of forum or governing law, many matters are inherently international and raise cross-border considerations. A single dispute may spring from multiple contracts and involve more than two participants. Often, governments or state-owned bodies are involved, adding another layer of difficulty. Given the breadth of this field, this Practice Note concentrates on practical considerations when commencing a claim and does not delve into specific substantive issues for any particular case. For an overview of the key points to consider, see: Starting a claim in an energy dispute—checklist. Energy disputes—examples and hypothetical scenario The types of disagreements that fall within the scope of energy disputes are extensive. Typical illustrations include: a dispute between parties to a joint operating agreement for an oil and gas field...

Prepared in association with 4 Pump Court. This Practice Note confirms that a referring party may halt an adjudication already underway, provided the adjudicator has not yet issued their decision. It examines the cost implications of doing so, and considers whether a party that has brought an adjudication to an end can later begin a second one concerning the same dispute. For guidance where an adjudicator resigns (for example, because they consider they lack jurisdiction), see Practice Note: Resignation by the adjudicator... Entitlement to abandon an adjudication In litigation, a claimant who has started a claim needs either the other party’s agreement or a court order to withdraw or abandon it. This is because withdrawal or abandonment (commonly called discontinuance) will generally be accompanied by an order requiring the claimant to pay the defendant’s costs of the proceedings. In...

Overview The consequences of breaching health and safety duties at work often include the prospect of paying financial compensation to the claimant or, where relevant, their dependants. This liability usually stems from actions brought in the civil courts or the threat of such proceedings. In addition, the Health and Safety Executive ( HSE) holds various enforcement powers over employing organisations, including the issue of prohibition or improvement notices. Under the Health and Safety at Work Act 1974 ( HSWA 1974), breaches can also result in criminal liability, with potential sanctions for both individuals and companies ranging from fines to, in serious instances, imprisonment. The employer’s duty of care The employer’s duty of care owed to employees is firmly established and requires no further examination. This duty arises in two ways—at common law (negligence) and under statutory regulation. Statutory oversight of workplace safety has existed for almost two...

Spotting the early symptoms of employer insolvency Above all, a contractor should remain vigilant to the employer’s financial health. Pay attention to persistent rumours about the employer’s position (in the media or by word of mouth). Monitor formal notices to shareholders and the market (such as profit warnings), any credit rating downgrades, adverse filings at Companies House (e.g. overdue accounts or qualified audit opinions), or lapses in insurance. Observe any unexpected or commercially questionable omissions from the project by the employer. Stay aware of the employer’s late or non-payment of other parties on this project, or on other schemes the employer is delivering. Clearly, if the employer suspends the works without a proper explanation or a sound commercial rationale, this may indicate an unwillingness to fund further activity. Validate concerns by...

This Practice Note outlines the steps an employer should follow to seek payment from the contractor, or to request an extension of the defects notification period, under the 1999 FIDIC Red, Yellow and Silver Books, the Pink ( MDB) Book 2010 and the Gold Book 2008. For guidance on the process for contractors’ claims under these forms, see Practice Note: FIDIC contracts (pre‑2017 editions)— Contractor claims. The 2017 editions of the Red, Yellow and Silver Books adopt a different approach—for instance, Employer and Contractor claims are dealt with under a single regime. For further details, refer to Practice Note: FIDIC contracts 2017— Contractor and Employer claims. Employers' claims— Red, Yellow, Silver and Pink Books An employer may claim payment from a contractor for a range of reasons—e.g. the contractor may owe delay damages, or the employer may have incurred costs because progress of the works has...

The rules regarding Scottish electronic documents and their execution are contained in: Requirements of Writing ( Scotland) Act 1995 ( RW( S) A 1995) Assimilated Regulation ( EU) No 910/2014 on electronic identification and trust services for electronic transactions in the internal market (as amended by the Electronic Identification and Trust Services for Electronic Transactions ( Amendment etc) ( EU Exit) Regulations 2019) ( UK e IDAS) Land Registration etc ( Scotland) Act 2012 ( LRE( S) A 2012) Electronic Documents ( Scotland) Regulations 2014, SSI 2014/83 Land Registration etc ( Scotland) Act 2012 ( Commencement No 2 and Transitional Provisions) Order 2014, No 41 ( C 4) (2014 Order) Land Register of Scotland ( Automated Registration) etc Regulations 2014, SSI 2014/347 Legal Writings ( Counterparts and Delivery) ( Scotland) Act 2015 ( LW( CD)( S) A...

This Practice Note reviews the principal issues and risks that routinely arise on major construction for education providers, spanning higher education, further education, academies and independent schools. See also Practice Note: Building Schools for the Future/ Priority School Building Programme [ Archived]. Typical procurement routes While any conventional procurement route can be used on an education project, three factors usually drive the route selected by education clients for their construction programmes: Nature of client Education clients seldom commission large capital schemes. It is not their core activity and, except for sizeable university estates teams, they rarely possess the in-house expertise to procure major works successfully. They are regarded as inexperienced construction clients. Funding Funding is often capped and time limited. As a result, works are commonly let on a fixed-price contract, typically at a higher cost, to secure the level of...

What is an early payment facility? An ‘early payment facility’ ( EPF), also called a ‘supplier finance scheme’, is an arrangement put in place by a main contractor and backed by one or more banks, allowing sub-contractors to be paid earlier than the payment terms specified in the sub-contract. This Practice Note focuses on EPF agreements made between a main contractor and a sub-contractor, though the concept can also apply to other suppliers. EPFs form part of the ‘ Supply Chain Finance Scheme’ announced by the government in 2012 to support suppliers by giving them access to cheaper credit and enhancing cash-flow. These schemes are not limited to construction: a range of large organisations—including retailers, telecoms and automotive companies—offer similar options to their suppliers. For further details on government backed measures to promote faster payment, see Practice Note: Encouraging fair payment in the...

When preparing contracts, attention often centres on negotiating the core clauses, with an assumption that schedules merely house supplementary material, like agreed templates and security instruments (eg bonds and guarantees) that sit alongside the primary terms and conditions. In an FM agreement, however, the schedules are anything but secondary; they are fundamental components, capturing the detailed evidence of the client’s needs and shaping both parties’ expectations on price and performance. They hold the particulars that substantiate the client’s requirements and steer commercial and performance assumptions. The degree to which schedules are deployed in FM arrangements varies in practice, driven by the complexity and breadth of the services to be delivered. Accordingly, their scope and granularity should reflect the nature and extent of the services being undertaken. A project-by-project review should always determine which schedules are necessary and the level of detail...

This Practice Note outlines the principal considerations when preparing contracts for schemes falling within the Building Safety Act 2022 ( BSA 2022), and in particular the regime for ‘higher-risk’ buildings. It addresses a range of matters including the lengthened time limits for pursuing claims under the Defective Premises Act 1972 ( DPA 1972), the extra regulatory oversight introduced for the pre-construction and construction phases and at completion, and the obligations imposed on ‘dutyholders’ under both BSA 2022 and related secondary legislation, as well as more generally under the Building Regulations 2010, as amended. Drafting points to consider where the employer is a member of the Responsible Actors Scheme are also covered. For a fuller summary of BSA 2022, see Practice Note: Building Safety Act 2022—key provisions and issues, and for guidance on which categories of buildings fall within the ‘ Higher- Risk...