Legal Practice Notes

The question of severance typically emerges on an enforcement application where the court has accepted a jurisdictional challenge or found a breach of the rules of natural justice, but only in relation to part of the adjudicator’s decision. The issue, therefore, is whether discrete elements of the adjudicator’s decision can be severed and enforced, even if other elements were reached without jurisdiction or in breach of natural justice. Severance may likewise surface where the court has concluded (eg in Part 8 proceedings) that the adjudicator’s reasoning on a particular point was flawed (see, for instance, Willow Corp v MTD Contractors). For general guidance on breaches of natural justice, the grounds for jurisdictional challenges, and Part 8 proceedings, see Practice Notes: Breach of natural justice in adjudication, Grounds for a jurisdictional challenge in an adjudication and Adjudication and Part 8...

This Practice Note examines how parties to a settlement agreement can seek to head off a post‑settlement dispute after the main dispute has been concluded, and the most effective way to resolve any disagreement about a settlement if one emerges... Defining terms regarding payment under a settlement agreement The party obliged to pay or deliver under a settlement agreement is described in this practice note as the ‘settlement debtor’—the word ‘debtor’ being used broadly to mean the party from whom money or money’s worth is expected under the agreement—while the party receiving money, or benefiting from any other performance under the settlement, is termed the ‘settlement creditor’... Why do disputes about settlement happen? Most parties settle in good faith, intending to fulfil the agreed terms and move on, though not all do so. Sometimes a settlement is reached to ease a pressure point, yet true finality is not...

Practice Note This Practice Note reviews the range of construction contract forms on offer and highlights which are best suited to particular kinds of works, taking account of the procurement route used, the sector concerned, and the size and complexity of the works... Standard forms of building contract have existed in the UK for over a century and are in very widespread use. Today there are numerous options open to parties on a construction project; the diversity that has emerged mirrors differing procurement methods, varied risk profiles, the breadth of project sizes, and the varying demands and expectations of those who own and use or occupy buildings... Construction projects are inherently complex—both in the rights and obligations of the employer and the contractor carrying out the works, and in what will actually happen on site. Accordingly, contracts governing these projects and the...

Practice Note This Practice Note provides a primer on the NEC suites of contracts— NEC3 and NEC4—and highlights the points to weigh up when choosing between them. It outlines the six NEC3/ NEC4 Main Options available to the parties when using the NEC Engineering and Construction Contract ( ECC). Note that NEC4 adopts the term ‘ Client’ rather than ‘ Employer’ (the designation used in NEC3); for ease of reading, where both versions are discussed, ‘ Client’ should be understood to include the NEC3 Employer. For an explanation of NEC terminology, see Practice Note: NEC contracts—glossary......

Background The EU introduced a directive setting a 20% renewable energy supply goal by 2020, and the UK set an equivalent 20% renewable output objective for the same date. These measures, together with later climate change commitments adopted by the UK and other states (for more detail, see Practice Note: Climate change—emissions targets, carbon budgets and net zero), have created a rising worldwide demand for capital in the renewables sector. In the current era of budget reductions, the government is unlikely to commit substantial additional funding or uplift tariffs. At the same time, banks have sharply curtailed the provision of affordable debt. Consequently, fresh approaches are needed to preserve and expand investment in the renewable energy market alongside traditional bank finance. See Practice Note: Introduction to UK energy projects for construction lawyers. Banks have been compelled to reassess their renewables portfolios and, in some cases, to...

This Practice Note looks at the Scheme for Construction Contracts This Practice Note examines the Scheme for Construction Contracts, as set out in: the schedule to the Scheme for Construction Contracts ( England and Wales) Regulations 1998, as amended by the Scheme for Construction Contracts ( England and Wales) Regulations 1998 ( Amendment) ( England) Regulations 2011 (the English Scheme) the schedule to the Scheme for Construction Contracts ( England and Wales) Regulations 1998, as amended by the Scheme for Construction Contracts ( England and Wales) Regulations 1998 ( Amendment) ( Wales) Regulations 2011 (the Welsh Scheme) the schedule to the Scheme for Construction Contracts ( Scotland) Regulations 1998, as amended by the Scheme for Construction Contracts ( Scotland) Amendment Regulations 2011 (the Scottish Scheme) Given the many common features across the English, Welsh and Scottish Schemes, this Practice Note refers to them...

Purpose of a scaffold licence A scaffold licence is generally required when a contractor needs to install scaffolding on land owned by a third party, rather than on the employer’s land. No licence is necessary if all scaffolding remains within the site boundary or otherwise on the employer’s property. Putting up scaffolding on someone else’s land without a scaffold licence constitutes trespass. The contractor should identify who owns any land where scaffolding is to be placed. Multiple licences will be needed if the scaffolding crosses more than one boundary. If the works are for a tenant who only occupies part of a site or building, the contractor must obtain a scaffold licence from the landlord to erect scaffolding outside the tenant’s demise. Format of a scaffold licence A scaffold licence is usually straightforward. It is commonly issued as a letter from the party on whose land the...

ARCHIVED: This Practice Note is no longer current and is not being updated. Stop press: Updated RIBA Professional Services Contracts (2020 editions) have now been issued—see: LNB News 21/07/2020 73. This Practice Note examines the RIBA Standard Professional Services Contract 2018 for Architectural Services ( RIBA SPSC 2018), highlighting principal clauses and typical circumstances for using the RIBA appointment. Issued in 2018, this contract superseded the RIBA Standard Agreement 2010 (2012 revision): Architect. For information on the 2010 version, see Practice Note: RIBA Standard Agreement 2010: Architect. It forms part of the 2018 suite of RIBA Professional Services Contracts, which also comprises: RIBA Concise Professional Services Contract 2018: Architectural Services RIBA Domestic Professional Services Contract 2018: Architectural Services RIBA Principal Designer Professional Services Contract 2018 RIBA Sub-consultant Professional Services Contract...

What is the RIBA Plan of Work? The RIBA Plan of Work lays out the structure of the design process for a construction project, defining tasks and expected outcomes at each stage. This framework underpins how projects are organised and managed. First issued in 1963, it has been revised at intervals to reflect shifts in practice and regulation. A major reworking appeared in 2013, introducing notable changes to align the Plan with contemporary ways of working and the needs of modern projects, while acknowledging sustainability and the growing use of Building Information Modelling ( BIM) (see Practice Note: The RIBA Plan of Work 2013). The latest edition, released in February 2020, builds upon the 2013 version. It places stronger emphasis on sustainability and embeds BIM as a core, integrated component, rather than treating it as a separate item or task. The Plan’s...

ARCHIVED: This Practice Note is archived and no longer maintained. It outlines the purpose and role of the RIBA Plan of Work 2013, explains the stages and task bars, and also reflects on how it is used. Note that a new edition—the RIBA Plan of Work 2020—was released in February 2020; see Practice Note: The RIBA Plan of Work 2020. What is the RIBA Plan of Work? The RIBA Plan of Work 2013 sets out the structure of the design process for a construction project, defining tasks and outputs for each stage. The framework it provides underpins how projects are organised and managed. First issued in 1963, it has been revised periodically to track changes in practice and regulation. Published in May 2013 after a full review and overhaul, the 2013 Plan introduced significant revisions to the 2007 version, aligning the Plan with...

A retention bond is a specific form of performance bond, most often provided as an ‘on demand’ instrument. This Practice Note considers: the nature of retention bonds why they are used in the construction industry the key features to address in the bond wording For a guide to performance bonds generally, see Practice Note: Performance bonds—construction projects. Why are retention bonds used? In typical building contracts, payments owed to the contractor are subject to retention: a pre-agreed percentage of each instalment is held back by the employer (the ‘retention’). When the works reach practical completion, an agreed share of that sum is released to the contractor, with the remainder paid at final completion/after making good defects. Half of the retention is commonly released at practical completion The balance is released on final...

ARCHIVED: This archived Practice Note reviews the catalogue of retained European Union laws identified on the UK government’s Retained EU Law dashboard and most pertinent to the construction industry. Such measures may subsequently be revised, repealed or replaced in due course under the Retained EU Law ( Revocation and Reforms) Bill (also called the ‘ Brexit Freedoms Bill’)... Background Before the UK left the EU on 31 January 2020, EU law applied domestically through the European Communities Act 1972 ( ECA 1972) and a range of specific Acts or regulations/statutory instruments enacted by Parliament to give effect to that law... On 31 January 2020, the ECA 1972 was repealed by the European Union ( Withdrawal) Act 2018 ( EU( W) A 2018) and many EU-derived rules ceased to apply, subject to savings introduced by the European Union ( Withdrawal Agreement) Act 2020 ( EU( WA) A 2020) and a...

This Practice Note explores clauses on the hierarchy of documents in building contracts (also referred to as order of precedence, precedence, or priority of documents clauses). Construction agreements are often extensive and comprise numerous legal and technical parts; here we examine how courts approach a contract when provisions within them conflict or overlap, and how competing terms are reconciled in practice. It explains how the conditions can expressly set the priority of contract documents, considers how effective such terms are in a dispute before a tribunal or court, and includes example hierarchy clauses that prescribe the order of precedence across the various contract papers and schedules. The Note also addresses how standard form building contracts, including JCT, NEC and FIDIC, treat the hierarchy of documents, the effect of BIM protocols, and summarises general common law rules on the priority of documents within a...

Prepared in collaboration with 4 Pump Court, this Practice Note condenses the choices open to a party aiming to stop enforcement of an adjudication decision, while also signposting grounds the court has dismissed or rejected. The courts adopt a pro-enforcement stance towards adjudication outcomes and, as set out below, the instances in which a decision will not be enforced (or a stay of execution will be ordered) are tightly constrained. Summary of grounds for resisting enforcement The court will refrain from enforcing an adjudicator’s decision, or grant a stay of execution, only in narrowly defined situations: the adjudicator lacked jurisdiction (see Practice Note: Grounds for a jurisdictional challenge in an adjudication) there was a serious or material breach of natural justice in the adjudication (see Practice Note: Breach of natural justice in adjudication) the referring party is insolvent and/or there is a risk of...

Produced in association with 4 Pump Court The judiciary has consistently confirmed (see eg Ferson Contractors v Levolux) that the purpose underlying the Housing Grants, Construction and Regeneration Act 1996 ( HGCRA 1996) is the prompt enforcement of adjudication outcomes; allowing parties to resist enforcement by advancing set‑off would cut across that purpose. Accordingly, where an adjudicator orders a payment, the paying party must discharge the sum in full, with no deduction or set‑off. Save in very limited circumstances, set out below, a separate contractual entitlement—such as a right to liquidated and ascertained damages ( LADs)—cannot be relied upon to fend off enforcement of an adjudicator’s decision. Parties who attempt to set‑off against an adjudicator’s award therefore face a steep and difficult task......

Common law—implied terms Reasonable care and skill Where a purchaser obtains a house from a builder either: during the course of its construction, or under a contract to build it, the common law implies a term that the builder will perform in a proper, workmanlike manner. It is also implied that the builder will provide sound and suitable materials. Fit for human habitation Common law further implies a term that the property will be reasonably fit for human habitation. Liability covers defective design as well as poor materials or workmanship. The Court of Appeal decided the term applied where a buyer purchased from a builder a house completed save for decorations, certain fittings, and plastering in one room. Subject to the Unfair Contract Terms Act 1977 ( UCTA 1977), which permits exclusion only where reasonable, express terms may displace the implied terms. They are not, however,...

This Practice Note examines the remedy of rescission, explaining when and in what manner a contract can be unwound (at common law, in equity and under statute) and thereby terminated and brought to an end. It covers the consequences and effects of rescission, the principal grounds for setting aside an agreement (misrepresentation, mistake, undue influence, duress, non‑disclosure, fiduciary misdealing and bribery) and the main obstacles to claiming rescission—affirmation, the intervention of third‑party rights and the impossibility of restitution. For further guidance on rescission in the context of misrepresentation, see Practice Note: Misrepresentation—rescission as a remedy. There are many ways in which a contract may reach its end; see: Terminating contracts—how and when a contract ends—overview for a brief and accessible summary, with links to the related further practical guidance, including Practice Note: Termination and expiry of contracts. For a table...

Meaning of remediation Remediation carries a broadly framed and inclusive meaning under the Environmental Protection Act 1990, Pt IIA ( EPA 1990). It can comprise a variety of practical measures, such as, among others: assessment actions: evaluating the state of contaminated land, any controlled waters influenced by that land, or neighbouring and adjacent land remedial treatment actions: measures to eliminate or break significant contaminant linkages ( SCLs) monitoring actions: inspections undertaken to track the condition of the contaminated land, controlled waters, or any adjoining or adjacent land In short, remediation refers to the steps necessary to remove risks to human health, the environment, or controlled waters, and to restore the land so that it remains fully fit for its existing use......

Development documentation sits at the heart of any real estate finance deal that involves building out a site. These papers set out the scope of the scheme, define how the project team interacts, allocate duties, and fix the expected costs. The worth of a property can be heavily undermined if the construction works are left unfinished. It is in the funder’s interests, just as much as the borrower’s, that a scheme is delivered on programme and within budget. Commonly, the lender takes security over the borrower’s contractual rights under the principal development agreements by taking an assignment for security purposes, which enables the lender, should problems emerge with the borrower, to call upon the counterparty to step in and carry out the contract obligations to completion, as clearly set out therein......

This Practice Note examines how to object to an adjudicator’s jurisdiction, covering whether a party must raise a challenge, how to frame an effective reservation of rights, the reach and implications of approbation and reprobation (treating an adjudicator’s decision as effective for limited purposes while simultaneously contesting its validity), and practical steps for handling and responding to such challenges, including timing and tactics. It also addresses the availability of recourse from the court, ie seeking a declaration to determine an adjudicator’s jurisdiction or an injunction restraining the commencement or continuation of an adjudication. For information on the various grounds upon which a jurisdictional challenge might be made, see Practice Note: Grounds for a jurisdictional challenge in an adjudication. Does a challenge have to be made? A decision issued by an adjudicator who lacks jurisdiction is a nullity. Strictly speaking, parties are not required to...