Earlier this year, contractor Providence Building Services appealed a High Court (TCC) ruling that declared it was not allowed to terminate a contract following repeated late payment by its employer, in circumstances where the employer had cured its previous breach by making payment within the period allowed for remedying a specified default.

The Court of Appeal has now handed down its decision. In what may be seen as a big win for contractors, the court overturned the TCC’s decision and found that Providence was entitled to terminate its employment without further warning where the employer again failed to pay on time, notwithstanding the employer’s earlier default had been remedied within the 28 days allowed.

“Pay now, argue later” is a cornerstone of construction adjudication. The Court will strive to enforce adjudication decisions unless it is plain that the Adjudicator lacked jurisdiction or the process materially breached the laws of natural justice. In the overwhelming majority of cases, the proper course for an unsuccessful party is to pay the amount ordered by the Adjudicator—and challenge the decision later.

But what if there are several adjudications in relation to the same contract, and both parties are in receipt of favourable decisions? Should the Court allow one decision to be set off against the other, instead of requiring sequential payment?

This was the question before the Court in the case of CNO Plant Hire Ltd v Caldwell Construction Ltd [2024].

Yesterday news broke that notices to appoint administrators have been lodged for various ISG group companies (“ISG”). The seemingly inevitable administration of ISG will have a huge impact across the construction industry, with the consequences felt by its staff as well as its employers, partners, and supply chain. It brings insolvency within the construction industry back into stark focus.

There are a host of issues, practical and legal, for affected parties to consider and contend with when a main contractor becomes insolvent. In the following bulletins we have summarised some of those issues, from both an upstream and downstream perspective.

If your business is affected by ISG entering administration (whether you are an existing client or not) and you would like a confidential chat, please don’t hesitate to get in touch with any member of our team direct (contact details are provided at the end of this bulletin).

Can a party on the wrong end of a smash-and-grab adjudication resist enforcement of the decision where the Adjudicator uses that party’s own submissions to calculate a higher award than the sum initially claimed?

This was the key issue at hand in the case of Bell Building Ltd v TClarke Contracting Ltd.

In Abbey Healthcare (Mill Hill) Ltd (“Abbey”) v Augusta 2008 LLP (formerly Simply Construct (UK) LLP) (“Simply”) [2024] UKSC 23, the Supreme Court provided some much needed clarity as to whether a collateral warranty is a construction contract for the purposes of the Housing Grants, Construction and Regeneration Act 1996 (“the Act”).

The key issue being considered was whether a collateral warranty given by Simply to Abbey was a construction contract for the purposes of section 104(1) of the Act, thereby giving Abbey a statutory right to adjudicate.

Key takeaways:

• In light of this unanimous judgment, the vast majority of collateral warranties will not be construction contracts for the purposes of section 104(1) of the Act.
• If you want to be able to adjudicate under a collateral warranty, you should provide an express written provision in the collateral warranty.

Did the wording of a Tomlin order settling adjudication enforcement proceedings preclude the claimant from starting a second adjudication in respect of further losses arising from the same breach of contract?

This was the point considered in the case of Dawnvale Café Components Ltd v Hylgar Properties Ltd [2024]. The decision highlights the importance of using precise wording to make sure the terms of a settlement agreement actually settle what both parties had intended — not  just what one of them might have assumed.

In ISG Retail Limited v FK Construction Limited [2024] EWHC 878 the Technology and Construction Court (TCC) considered the latest dispute between these “serial litigants” (as they were described by the Judge, Neil Moody KC).

In Battersea Project Phase 2 Development Co Ltd v QFS Scaffolding Ltd [2024] EWHC 591, the TCC looked again at the interplay between an adjudication notice and a “conclusive evidence” provision relating to a final payment notice (FPN) issued under a JCT contract.

In Bellway Homes Limited v Surgo Construction Ltd [2024] EWHC 269 the Technology and Construction Court (TCC) was asked to determine issues arising in relation to the appointment of a panel adjudicator; and his decision entitling the employer to repayment of sums overpaid on a previous interim payment cycle.

JCT has now published the long-awaited 2024 edition of the Design and Build Contract family, with important changes relating to Part 2A of the Building Regulations, the Contractor’s responsibility for design and the extension of time provisions.

In CLS Civil Engineering Ltd v WJG Evans and Sons [2024] EWHC 194 the TCC found that in the absence of a formally agreed building contract, a liability cap contained in an unsigned letter of intent was binding. As a result, the claimant contractor was not entitled to additional payment exceeding the cap.

In Bellway Homes Ltd v Surgo Construction Ltd [2024], the TCC was asked to determine whether an adjudicator had jurisdiction to decide a payee’s claim for interim payment based on either a ‘smash and grab’ basis or a true valuation of the works, and whether these alternative bases of claim in fact comprised two separate disputes.

In Van Elle Limited v Keynvor Morlift Limited [2023] EWHC 3137 (TCC) HHJ Stephen Davies was asked to consider the “interesting but complex” question of the true territorial extent of Part 2 of the Housing Grants, Construction and Regeneration Act 1996 (the “Construction Act”). Or put shortly, where does England end?

In Lidl Great Britain Limited v Closed Circuit Cooling Limited t/a 3CL [2023], the TCC TCC was asked to consider whether the Construction Act operated to prohibit any adjudication while a notified sum remained unpaid, even where the subject matter of the adjudication has no relation to that notified sum.

The Court held that it did not, and as a result accepted the Employer’s further claims in part.

In Waite and others v Kedai Ltd [2023], the First-Tier Tribunal (“FTT”) granted the applicant leaseholders the first Remediation Order to be made under section 123 of the Building Safety Act 2022 (“BSA”).

There are three key points raised in this article:

1. There is ongoing potential for significant structural deficiencies in reinforced autoclaved aerated concrete (RAAC) which saw widespread use in the construction of buildings between the 1950s and 1990s, many of which were municipal buildings including schools and hospitals.
2. The effect of the Limitation Act 1980 is likely to preclude historic liability for the specification, design and construction of buildings using RAAC, although it is feasible the Building Safety Act 2022 may apply to extend this limitation period in the context of residential buildings.
3. More contemporary liability may arise regarding building owners and occupiers as well as the professionals engaged to undertake surveys of buildings where the existence of RAAC or defects of the RAAC are not identified or fail to be managed or rectified in time, or at all.

Lidl Great Britain Limited v Closed Circuit Cooling Limited t/a 3CL [2023] EWHC 2243 (TCC)

In Lidl Great Britain Limited v Closed Circuit Cooling Limited t/a 3CL [2023], the TCC enforced an adjudicator’s decision in favour of a contractor and rejected a series of Part 8 declarations sought by the employer.

In Home Group Ltd v MPS Housing Ltd [2023], the TCC rejected a defendant’s submission that there had been a breach of natural justice by reason of it allegedly being unable to digest and respond to extensive material served in an adjudication.

In Henry Construction Projects Ltd v Alu-Fix (UK) Ltd [2023], the TCC declined to enforce a true value adjudication decision where that adjudication had been commenced before the contractor had discharged its immediate payment obligation to its subcontractor arising from an earlier dispute.

This was notwithstanding the earlier award had, in the meantime, been paid.

In Drax Energy Solutions Limited v Wipro Limited [2023], the TCC upheld a contractual clause said to impose a single liability cap for all claims arising out of a master services agreement.

In Sudlows Ltd v Global Switch Estates 1 Ltd [2023] EWCA Civ 813, the Court of Appeal has provided useful guidance as to the approach to be adopted when considering potential overlap between adjudication decisions.

URS Corporation Ltd v BDW Trading Ltd [2023] EWCA Civ 772

In its recent decision in URS Corporation Ltd v BDW Trading Ltd, the Court of Appeal has provided important guidance in respect of construction law questions old and new.

FK Construction Ltd v ISG Retail Ltd [2023]

In FK Construction Ltd v ISG Retail Ltd [2023], the Court declined to exercise its discretion to permit set-offs arising from other adjudication decisions between the same parties.

Kajima Construction Europe (UK) Ltd v Children’s Ark Partnership Ltd [2023]

In Kajima Construction Europe (UK) Ltd v Children’s Ark Partnership Ltd [2023], the Court of Appeal found the first instance Judge had been correct to conclude that a dispute resolution procedure (DRP) in a construction contract had been unenforceable by reason of uncertainty.

Elements (Europe) Ltd v FK Building Ltd [2023]

In Elements (Europe) Ltd -v- FK Building Ltd [2023] EWHC 726 (TCC), the TCC has provided helpful guidance concerning the proper construction of an important element of a JCT standard form.

In Batish and others v Inspired Sutton Ltd [2023], the First Tier Tribunal (“FTT”) granted the applicant leaseholders what is believed to be the first Remediation Contribution Order made under the Building Safety Act 2022.

In Batish and others v Inspired Sutton Ltd [2023], the First Tier Tribunal (“FTT”) granted the applicant leaseholders what is believed to be the first Remediation Contribution Order made under the Building Safety Act 2022.

In URS Corporation Ltd v BDW Trading Ltd [2023] EWCA Civ 189 the Court of Appeal decided that two appeals concerning issues arising under the Building Safety Act 2022 (“BSA”) should be heard together.

In WRB (NI) Ltd v Henry Construction Projects Ltd [2023] EWHC 278, the TCC refused to grant a main contractor a stay of execution to establish its alleged cross-claims against a dormant company.

In LJR Interiors Ltd v Cooper Construction Ltd the TCC held that the Adjudicator was wrong to reject the responding party’s limitation defence such that his decision was void and unenforceable.

In LDC (Portfolio One) Ltd v (1) George Downing Construction Ltd and (2) European Sheeting Limited (in Liquidation) the TCC was required to consider a contractual obligation to exercise reasonable skill and care alongside the requirement for compliance with the applicable Building Regulations. The outcome was that the Court held the defendant external wall sub-contractor liable for fire safety defects.

In an unusual turn of events, the TCC in Sudlows Ltd v Global Switch Estates 1 Limited [2022] found that an adjudicator’s alternative decision was enforceable despite his primary decision being unenforceable because of a breach of natural justice.