The Week That Was - 1 November 2024

Welcome to The Week That Was, a round-up of key events in the construction sector over the last seven days.

Of course, this week has seen the Labour Government's first Budget, which made a number of policy statements directly linked to the UK construction sector. We will report on these next week once the implications have become a little clearer.

Court rejects allegations of breach of natural justice and upholds adjudicator's decision

In Essential Living (Greenwich) Ltd v Conneely Facades Ltd [2024] EWHC 2629 (TCC), Essential applied for summary judgment against Conneely to enforce an adjudication decision regarding a mixed-use development at Greenwich Creekside in London.  Conneely resisted the enforcement of the Adjudicator's decision on the basis that the Adjudicator made a determination about the strength of Conneely's case when directing that Essential provides disclosure.  Conneely submitted that this would lead a fair-minded and informed observer to conclude that there was a real possibility that the Adjudicator was biased.

Deputy High Court Judge Adrian Williamson KC allowed Essential's summary judgment application because there had been no breach of the rules of natural justice, let alone a serious breach, as the Adjudicator gave the parties a full opportunity to address him before making directions on disclosure.

You can read the Judgment here.

The Data Use and Access Bill - mapping of underground pipes and cables

 Significant changes to data protection law are on the horizon after The Data Use and Access Bill (the DUA Bill) was put before Parliament last Wednesday.  If enacted, the DUA Bill would have far-reaching consequences across industries, including construction as it would require infrastructure firms to upload details of underground pipes and cables to a "National Underground Asset Register" (NUAR).  Such a register has been on the cards since 2019 and from next year will be run by Ordnance Survey, but the DUA Bill would give the NUAR statutory footing.  Over 600 gas, water, electric and telecommunications companies and local authorities would be required to upload this data.  These changes would encourage data-sharing and thereby improve efficiency – the current wait time after requesting underground information is six days, whereas a NUAR would provide instant access to this information to construction workers who need it.  It is also expected to increase economic growth by at least £400 million per year and reduce accidental strikes on underground pipes and cables.

For more information, click here and here.  Read the bill here.

Construction Leadership Council criticises "onerous" amendments to contract

In a bid to limit exposure to Professional Indemnity Insurance (PII) coverage exemptions, the Construction Leadership Council (CLC) has warned clients against amending standard contractual terms unless necessary.  Common amendments include adding liabilities and obligations which the CLC considers to be "too onerous for the nature of work" and does not fall within the scope of a contractor's PII cover, meaning that contractors cannot claim for loss and damage if something goes wrong.  The CLC commented: “The CLC believes that onerous amendments make contracts unviable, reduce competition, increase risk and lead to unnecessary legal costs required to review legal liabilities created by the amendments.”  The CLC has also called for a simpler approach to contractual liabilities and a clarification of roles and responsibilities, especially in relation to fire safety design.

Read more here.

Green light for Network Rail's Olympics Logistics hub scheme

Maccreanor Lavington has been given the green light for its outline masterplan to transform 30 acres of land at Bow Goods Yard into a rail freight hub and leisure destination.  This development will be the first independent planning submission of Network Rail’s property division and was unanimously approved by the London Legacy Development Corporation.  The site was originally developed as part of the 2012 Olympics legacy.

Network Rail is expecting the site to become a major logistics centre which will serve the district of East London.  Up to three million square feet of industrial floorspace will be built; proposals include constructing areas for food and drink, as well as manufacturing sports pitches which will complement existing facilities on the Queen Elizabeth Olympic Park.  Robin Dobson (Network Rail’s Property Director) has stated that renovating the land will be central to increasing rail freight capacity while supporting London’s logistics market.

For more information, please click here.

Government should create cross-departmental housing delivery unit

 Housing commission Radix Big Tent, which was originally chaired by economist Kate Barker, is calling for "cold cash" to subsidise social rent homes.  They have published a report titled "Beyond the Permacrisis – Delivering 1,000 Homes a Day", urging the Government to create a cross-departmental housing delivery unit in an attempt to reform the present system of developer contributions through Section 106 and the Community Infrastructure Levy.Additionally, the report intends to co-ordinate the agreement of prompt rent settlements for housing associations.

The Chief Executive of the Royal Town Planning Institute stated that the report offered “clear and sensible recommendations for the future of housebuilding”.  The housing delivery unit will engage with the Bank of England, as well as financial and utility regulators, and highlight the need to establish policy consensus.  Homes England will act as a master developer for the members of the built environmental sector, shaping a new approach towards the availability of public land for housing.  The report has been sent to the Minister of State for Housing and Planning for his consideration.

For more information, please click here.  Read the report here.

Construction business confidence hits three-year high

 The Institute of Chartered Accountants in England and Wales (ICAEW) has released the results of its survey of the past quarter, showing that confidence among construction firms has reached the highest point in almost three years. Construction companies reported the highest levels of optimism out of any sector in the past quarter; business confidence currently stands at 25.3 in ICAEW’s index, exceeding the national average of 14.4.  The ICAEW has stated that the rise in confidence was "underpinned by a pick-up in domestic sales and optimism that lower interest rates and government policy will boost demand”.

However, high input costs remain a challenge to construction firms.  Input price inflation has increased for the second quarter in a row, reaching 4.6%, though it's expected that inflation will slow over the next year to 1.8%.  Lack of investment remains another challenge:  in the past quarter, the construction sector reported capital investment growth of 1.1% which is weaker than any other sector during the same period.  However, the companies who were surveyed plan to increase capital investment by around 1.8% next year, which is 0.2% higher than the average. 

For more information, please click here.

Authors:  Zack Gould-Wilson, Sophie Hudson, Sky Arklay

Disclaimer: The information in this publication is for guidance purposes only and does not constitute legal advice.  We attempt to ensure that the content is current as at the date of publication, but we do not guarantee that it remains up to date.  You should seek legal or other professional advice before acting or relying on any of the content.