by Hardwick Legal | May 19, 2020 | Purpose Built (LexisNexis)
<p>The slowdown of the UK’s construction activity in March 2020 was the fastest decline seen since the 2008 financial crisis.</p><p>With the UK government having already announced that it will be introducing changes to the insolvency regime in England & Wales, as part of its response to COVID-19, there is a clear indication of what is expected to come. Our general guidance on
managing the increased insolvency risk arising from this period of disruption can be found <a data-sf-ec-immutable="" href="https://www.simmons-simmons.com/en/publications/ck7fx9c860qxc0921fc1arkmq/covid-19-impact-managing-insolvency-risk-and-financial-reporting">here.</a></p><p>In the construction industry, as cash flow issues bite, the downturn is likely to result in the insolvency of many sub-contractors which, in turn, will see the risk carried by the contractor. Last month a survey from the Federation of Master Builders
found that two-thirds of SMEs in the UK construction industry will not last more than two months, unless the government gives them cash grants.</p><h3 id="what-contractual-protection-might-exist-under-the-construction-contact">What contractual protection might exist under the construction contact?</h3><p>Where there has been a sub-contractor insolvency, and the works are ongoing, contractors may have a contractual right to terminate as a result of the sub-contractor’s insolvency. Other options include making calls on any bonds available, or contacting
any guarantor to complete the outstanding works.</p><p>It is also commonplace for sub-contractors to provide collateral warranties in favour of employers, or other third parties such as a funder (albeit, a collateral warranty is only as robust as the contract to which it relates).</p><p>Concern over the potential for costly and long-running disputes involving construction industry participants has prompted</p>
Source: LexisNexis Purpose Built
Trouble in the supply chain? Sub-contractor insolvency and insurance
by Hardwick Legal | May 19, 2020 | Purpose Built (LexisNexis)
<p>Welcome to a very special edition of our environmental law news podcast. This month we’ve partnered up with the UK Environmental Law Association (UKELA), along with 6 Pump Court, to bring you a COVID-19 special where we hear from environmental regulators on how the pandemic is affecting operations. </p><p><span style="background-color:transparent;color:inherit;font-family:inherit;font-size:inherit;text-align:inherit;text-transform:inherit;white-space:inherit;word-spacing:normal;caret-color:auto;">Simone Davidson, Head of Lexis PSL Environment, Trustee and a Vice Chair for UKELA and Mark Davies, Barrister at 6 Pump Court talk to Peter Kellett, Director for Legal Services for the Environment Agency, Richard Broadbent, Principal Solicitor for Natural England and Terry A’Hearn, CEO of the Scottish Environmental Protection Agency. </span></p><p><span style="background-color:transparent;color:inherit;font-family:inherit;font-size:inherit;text-align:inherit;text-transform:inherit;white-space:inherit;word-spacing:normal;caret-color:auto;">In these three conversations, the speakers take us through:</span><span style="background-color:transparent;color:inherit;font-family:inherit;font-size:inherit;text-align:inherit;text-transform:inherit;white-space:inherit;word-spacing:normal;caret-color:auto style=""></span style="background-color:transparent;color:inherit;font-family:inherit;font-size:inherit;text-align:inherit;text-transform:inherit;white-space:inherit;word-spacing:normal;caret-color:auto></p>
Source: LexisNexis Purpose Built
Environmental law news podcast — environmental regulators' response to coronavirus (COVID-19)
by Hardwick Legal | May 1, 2020 | Purpose Built (LexisNexis)
<article><section><p>In proceedings to enforce an adjudicator’s decision for the amount stated in a contractor’s interim payment application, the Technology and Construction Court declined to grant a stay of execution to allow a
‘true value’ adjudication to take place in respect of the final account. In the view of the court, permitting the employer to commence such an adjudication, in circumstances where it had not paid the amount awarded by the adjudicator,
would run contrary to <em>S&T v Grove</em>.</p></section></article><section><p><em>Broseley London Ltd v Prime Asset Management Ltd (Trustee of the Mashel Family Trust)</em> <a href="https://www.lexisnexis.com/uk/lexispsl/construction/docfromresult/D-WA-A-WUD-WUD-MsSWYWZ-UUW-UZEYAAUUW-U-U-AUUU-U-U-U-ACEUEAYVAW-ACYYVEEWAW-YVAUVEBBD-AUUU-U/7/linkHandler.faces?psldocinfo=Employer_not_permitted_to_commence__true_value__final_account_adjudication__Broseley_London_v_Prime_Asset_Management_&linkInfo=F%23GB%23EWHCTCC%23sel1%252020%25year%252020%25page%25944%25&A=0.801356101523099&bct=A&risb=&service=citation&langcountry=GB" target="_parent">[2020] EWHC 944 (TCC)</a></p><section><h3>What are the practical implications of this case?</h3><p>The Court of Appeal’s ruling in <em>S&T v Grove</em> <a data-sf-ec-immutable="" href="https://www.lexisnexis.com/uk/lexispsl/construction/docfromresult/D-WA-A-WUD-WUD-MsSAYWD-UUW-UZEYAAUUW-U-U-AUUU-U-U-U-ACEUEAYDUV-ACYYVEECUV-YBEBYYUDV-AUUU-U/7/linkHandler.faces?psldocinfo=Employer_not_permitted_to_commence__true_value__final_account_adjudication__Broseley_London_v_Prime_Asset_Management_&linkInfo=F%23GB%23EWCACIV%23sel1%252018%25year%252018%25page%252448%25&A=0.23244344983498422&bct=A&risb=&service=citation&langcountry=GB" target="_parent">[2018] EWCA Civ 2448</a>, <a data-sf-ec-immutable="" href="https://www.lexisnexis.com/uk/lexispsl/construction/docfromresult/D-WA-A-WUD-WUD-MsSAYWD-UUW-UZEYAAUUW-U-U-AUUU-U-U-U-ACEUEAYDUV-ACYYVEECUV-YBEBYYUDV-AUUU-U/7/linkHandler.faces?psldocinfo=Employer_not_permitted_to_commence__true_value__final_account_adjudication__Broseley_London_v_Prime_Asset_Management_&linkInfo=F%23GB%23CONLR%23vol%25181%25page%2566%25sel2%25181%25&A=0.9900632526373528&bct=A&risb=&service=citation&langcountry=GB" target="_parent">181 ConLR 66</a> confirmed that an employer who has failed to give a valid payment or pay less notice is nonetheless entitled to bring an adjudication to determine the ‘true value’ of the interim payment application
in question. However, it can only do so once it has paid the amount stated in the contractor’s interim payment application (the ‘notified sum’). See News Analysis: <a data-sf-ec-immutable="" href="https://www.lexisnexis.com/uk/lexispsl/construction/docfromresult/D-WA-A-WUD-WUD-MsSWYWZ-UUW-UZEYAAUUW-U-U-AUUU-U-U-U-ACEUEAYVAW-ACYYVEEWAW-YVAUVEBBD-AUUU-U/7/linkHandler.faces?psldocinfo=Employer_not_permitted_to_commence__true_value__final_account_adjudication__Broseley_London_v_Prime_Asset_Management_&ps=null&bct=A&homeCsi=412012&A=0.8692258461239392&urlEnc=ISO-8859-1&&dpsi=0S4D&remotekey1=DOC-ID&remotekey2=0S4D_3154562&service=DOC-ID&origdpsi=0S4D">Court of Appeal confirms right to adjudicate true va</a></p></section></section>
Source: LexisNexis Purpose Built
Employer not permitted to commence ‘true value’ final account adjudication (Broseley London v Prime Asset Management)
