Legal Practice Notes

When embarking on a facilities management ( FM) arrangement, the parties must navigate a broad spectrum of contractual considerations, from choosing how best to place the contract (procurement routes and requirements) to anticipating what will occur if outcomes fall short in practice (change controls, termination and dispute resolution). This Practice Note sets out the principal contractual points to capture when assembling the formal agreement. Each point needs careful analysis and bespoke adjustment to suit any particular project needs, but it is vital that, throughout negotiations, the parties remain mindful of the overall contractual matrix of risks and responsibilities (see diagram: What does a Facilities Management contract look like—diagram). Procurement issues How will the client procure the FM relationship itself? What tendering steps will be followed and how will the agreement be entered into? Does the client’s identity and status impose further...

Practice Note: construction arrangements for UK electricity interconnector projects This Practice Note explores key considerations in the construction arrangements for UK electricity interconnector schemes. Electricity interconnectors are substantial transmission cables carrying power between one country and another. A typical interconnector scheme covers the fabrication and laying of the cable itself (usually high voltage direct current ( HVDC)) and the build and fit out of a substation at each end (a converter station) that converts electricity between Alternating Current ( AC) and Direct Current ( DC). AC is used within each national transmission network, while DC is employed to move electricity along the high-voltage subsea route. For an overview of interconnectors, and how and where they operate in Great Britain, see Practice Note: Great Britain electricity interconnectors. These projects commonly adopt either a single ‘wrapped’ construction contract or a split approach using two discrete...

The role of documentary evidence In civil claims, contemporaneous material sits at the core of a party’s position. Most of the time, documents supply the chief and most dependable proof. Construction disputes are no exception. The range and volume of documents in such matters can be extensive and diverse. Construction contracts are often lengthy and usually prescribe detailed processes for issuing notices, certificates, and other data across the project life cycle. Outside the contract, the complexity and duration of works, the presence of numerous participants, and the regulatory regimes governing construction all drive the generation of paperwork and correspondence. When kept properly and deployed effectively, this record will be invaluable if conflict emerges. Although parties may turn to experts and witnesses of fact, that evidence will generally not displace contemporaneous written records. First, construction disputes frequently concern technical and factual intricacy, which may not be...

Many contracts include provisions on resolving disputes. At times these are simple terms stipulating litigation or possibly arbitration, sometimes also spelling out jurisdiction and the governing law. Yet a clause can instead prescribe other routes of alternative dispute resolution ( ADR) to be pursued should a dispute arise, offering an alternative to litigation or arbitration. Such provisions are often labelled ADR clauses. Parties have a number of options open to them (see below), and it is vital to appreciate the consequences of the drafting choices you make. This Practice Note reviews several clause formulations and evaluates the issues that may arise in relation to each category. The types of dispute resolution clause considered in this Practice Note are: litigation only clauses mediation clauses multi-tier clauses (escalation clauses) hybrid clauses carve-out clauses For guidance on the principal questions around the...

Choosing to include a dispute board within a construction contract’s dispute resolution process is merely the starting point. Once the parties have reached agreement on using a board, attention has to turn to practical matters: who ought to sit on it, the procedure for appointing them, and the way in which the board will carry out its role in practice. This Practice Note addresses the selection and appointment of dispute board members, together with guidance on their operation after appointment. Characteristics of good dispute board members The initial issue for the parties is deciding who should serve on the board. In many agreements, a three-person board is standard, though some also permit a sole-member alternative. The FIDIC forms of contract illustrate this position; they set a three-member board as the default arrangement, yet give both parties the option to choose a...

What is a display energy certificate ( DEC)? DECs were brought in to increase public understanding of energy consumption and to inform visitors to public buildings about how much energy a building uses. A DEC sets out a building’s operational energy rating, graded from A to G, where A signifies very efficient and G indicates the least efficient. This rating is a numerical measure of the building’s actual yearly carbon dioxide emissions... The certificate is based on the metered energy consumed by the building over the previous 12 months that fall within the DEC’s validity. The operational rating is determined using a methodology approved by the Secretary of State and applied by an accredited energy assessor with a designated software tool. For further details on energy assessors, see Practice Note: Energy performance certificates ( EPCs)—energy assessor accreditation and energy...

This Practice Note offers an entry point for construction practitioners on the disclosure process in arbitration, setting it against disclosure in court proceedings and addressing the relevant procedural frameworks. It also highlights practical points to consider when managing disclosure in arbitration. For broader guidance on disclosure in arbitration, see the subtopics: AA 1996—evidence in arbitration— England and Wales and Evidence in international arbitration—overview. What is disclosure and why is it an issue in construction arbitrations? Construction projects generate vast volumes of documents, and the sector’s heavy dependence on technology for communication, planning and project management results in extensive electronically stored information ( ESI). This can encompass, for example, electronically executed contracts, programmes, and communications hosted on online platforms, including Microsoft Teams and other messaging applications. Extracting the relevant material from what may amount to millions of electronic files and terabytes of data is critical in...

Background and the Responsible Actors Scheme In the years after the Grenfell Tower disaster, the government stated it would hold the construction sector to account for behaviours that had led to fire safety flaws in homes, and would require those responsible to help ‘put right the problems they had caused’. To that end, in January 2022, the Secretary of State for Levelling Up, Housing and Communities ( DLUHC), Michael Gove, sent a letter to residential property developers, asking them to commit to remedy, or fund the remediation of, historic fire safety defects for which they were answerable (see: LNB News 10/01/2022 32). In April 2022, DLUHC asked leading residential developers to sign a pledge confirming the principle that leaseholders should not bear any costs linked to life-critical fire-safety remediation arising from the design, construction or refurbishment of buildings 11 metres and higher. By...

Designers play a pivotal part in delivering any project and exert considerable sway over how it develops, spanning the earliest architectural schemes and drawings right through to the ultimate selection of roofing materials. Because some degree of design typically features at every stage of a construction programme, the Construction ( Design and Management) Regulations 2015 (the ‘ Regulations’) accordingly impose duties on designers to avoid foreseeable risks to people engaged in constructing, maintaining and using the finished building. For details about the designer’s responsibilities within the dutyholder regime set out in the Building Regulations 2010, SI 2010/2214, Pt 2A, refer to Practice Note: Building regulations: the Dutyholders. Who is a designer? Under the Regulations, a designer means any organisation or individual who ‘prepares or modifies a design’ (or instructs, directs or arranges for another under their control to do so). The definition of 'design' in...

The question of who holds design responsibility, and how that risk is shared, sits at the core of all construction contracts. EPC arrangements parallel design and build in that they assign single-point responsibility for the supply of an asset. In essence, both models centralise accountability for the supply of the asset with one party. Yet, in a design and build setting, the scheme is typically produced by an independent engineer or architect, while the contractor may still carry limited responsibility—for example, in some jurisdictions it must alert the employer to defects in a third-party design. Under an EPC, and subject to the employer’s requirements and project-specific considerations, the contractor performs most of the project’s design and therefore assumes the greater part of the design risk. The core promise of an EPC is that the contractor hands over a complete facility to the...

Introduction This Practice Note explores design under the 1999 Red, Yellow and Silver Books, the 2008 Gold Book, and the 2010 Pink Book. For coverage of design in the 2017 Red, Yellow and Silver Books, see Practice Note: FIDIC contracts 2017—design. In the Yellow, Silver and Gold Books, the contractor undertakes the design to satisfy the employer’s requirements prepared by or for the employer, while in the Red and Pink Books the design is produced by or on behalf of the employer. The design is set out in the following: specifications and drawings ( Red and Pink Books) employer’s requirements together with the contractor’s proposals ( Yellow Book) employer’s requirements and the Tender ( Silver Book) employer’s requirements, the contractor’s proposals and operation management requirements ( Gold Book) Contractor design obligations under the Red and Pink Books FIDIC treats the Red and Pink Books as traditional...

This Practice Note examines the design duties in the 2017 FIDIC suite ( Red, Yellow and Silver Books), touching on fitness of purpose and accountability for the Employer’s Requirements. For commentary on the 1999 editions of the Red, Yellow and Silver Books, and the Pink and Gold Books, see Practice Note: FIDIC contracts (pre-2017 editions)—design. In the Yellow and Silver Books, the Contractor undertakes the design to satisfy the Employer's Requirements, which are produced by or for the Employer; by contrast, under the Red Book the design is produced by or for the Employer. The design is set out in: the specifications and drawings (the Red Book) the Employer's Requirements and Contractor's proposals (the Yellow Book) the Employer's Requirements and Tender (the Silver Book) Contractor design obligations under the Red Book FIDIC treats the Red Book as a...

The Building Safety Act 2022 ( BSA 2022) contains extensive provisions and paves the way for significant changes to the law on building safety. For an overview of the reforms introduced by BSA 2022 and its principal measures, see Practice Note: Building Safety Act 2022—key provisions and issues. Parts 3 and 4 of BSA 2022 establish the framework for a new regulatory system for ‘higher-risk buildings’ ( HRBs), meaning buildings that are at least 18 metres tall or have a minimum of seven storeys and contain at least two residential units. By amending the Building Act 1984 ( BA 1984), Part 3 allows the creation of a stringent building control regime applying to the design and construction of works to HRBs. Part 4 of BSA 2022 imposes extensive risk-management and reporting obligations on those responsible for occupied HRBs. Together, these measures are known as the HRB...

This Practice Note sets out what design and build (often called ‘ D& B’) procurement involves and explains why an employer may choose this route. It outlines how a construction project delivered under the design and build model is structured, the key points to weigh when deciding whether to proceed with this method—most notably design responsibility and the allocation of risk—and the potential advantages for the parties, in particular the employer, when compared with traditional procurement or other alternative approaches... What is design and build procurement? The contractual route an employer selects to procure a construction project is pivotal to cost-effectiveness, quality, overall project success and the employer’s satisfaction with the outcome. That decision will be shaped by: the time available for tendering and for completing the project the method of financing the developer’s expertise—see Practice Note: Choosing the right...

What is design and build? In its essence, design and build ( D& B): is a procurement route under which one organisation (the D& B contractor) takes responsibility for both the design and the construction stages of a scheme, and can give the employer a single point of contact and accountability, thereby lowering the employer’s risk. Whilst D& B places greater risk on the D& B contractor, this is dealt with through pricing overall What is D& B insurance and why is it needed?......

What are prohibited or deleterious materials? Across building contracts, sub-contracts, consultants’ appointments and collateral warranties, it is common to find clauses governing and controlling how materials are chosen and used (see Practice Note: Materials and workmanship in construction contracts). When designing, procuring and constructing new buildings or infrastructure works, certain materials should not be specified or employed at specification stage and throughout procurement and construction. Such products are typically labelled deleterious or prohibited. as the materials may themselves be inherently prone to failure; or as they could potentially compromise the fabric of the building (eg the ‘glass cancer’ seen in the late 1990s/early 2000s); or as they might cause harm to individuals (eg asbestos) Defining deleterious/prohibited materials Contractual approaches to identifying which materials are deleterious, or prohibited, and therefore barred from use have evolved significantly over time. For many years,...

Even with advanced procurement techniques, scheduling tools and project management applications, construction schemes can still run late and overrun. Any slippage triggers extra cost. This Practice Note explores the delay damages regime designed to safeguard an employer if delay occurs, highlighting the relevant FIDIC clauses and other standard form contracts used in the energy sector that address delay damages. See also Practice Notes: Delay and disruption in construction projects and Time and money claims. The importance of time in energy projects Construction and energy contracts devote substantial attention to time, particularly setting a completion date. Most building contracts provide for delay damages (also termed liquidated damages or liquidated and ascertained damages ( LADs)). The core concept is that, on specified breaches by the contractor—commonly failure to complete on time, but potentially performance shortfalls—agreed damages become payable to the employer. Fixing those sums before contract award seeks to...

A B C D E F G H I J K L M N O P Q R S T U V W X Y Z Valuation It typically denotes assessing the works completed—whether by a contractor, subcontractor, or consultant—for which a payment is due, or where a request for payment has been lodged, representing evaluation of what has been undertaken in order to determine the sum to be paid......

This Practice Note offers an overview of cumulative impact claims and explores how numerous instructed variations on a construction project can affect a contractor’s progress on unchanged tasks and diminish productivity, the courts’ and tribunals’ treatment of such claims, the possible influence of contractual terms on them, when and how to quantify the claims, and practical guidance on securing a successful cumulative impact claim. What is a cumulative impact claim? Variations on construction projects arise frequently and for a range of causes, including: contracts executed before the design or scope is finalised; the employer seeking alterations as the build advances; inconsistencies within the contract documents requiring resolution; or unforeseen physical site conditions that must be addressed. While the direct consequences of variations—such as the price of the changed work and the knock-on effect on linked activities—are usually straightforward to determine, large and complex schemes may involve hundreds of changes whose...

With appreciation to other contributors from Squire Patton Boggs’ offices across its global network. Cross-border JVs There is no universal model for creating cross-border joint ventures ( JVs) (that is, where one or more JV parties are based outside the UK and intend to form a JV outside the UK). Ultimately, the agreement’s terms must capture the parties’ commercial bargain. That said, the legal considerations outlined in this and the accompanying Practice Notes— Cross-border joint ventures—taxation and funding issues, Cross-border joint ventures—management and control, and Cross-border joint ventures—termination (together, the Cross-border Joint Venture Practice Notes)—may influence both the jurisdiction selected for the JV entity and the commercial deal itself. These factors should therefore be reviewed at the earliest opportunity to give the JV the best chance of success. Even where a joint venture agreement ( JVA) is governed by a familiar law, such as English law,...