The Week That Was - 13 September 2024

Welcome to the week that was, a round-up of key events in the construction sector over the last seven days.

Groundbreaking decision on business interruption in COVID-19 coverage case

In London International Exhibition Centre Plc -v- Allianz Insurance Plc [2024] EWCA CIV 1026, London International Exhibition Centre was successful in recovering losses which were incurred during the COVID-19 pandemic under its Business Interruption policies.  

The case expanded the approach to causation that had been adopted in the landmark FCA Test Case [2021] UKSC 1.  That case had been limited to situations where the business interruption had arisen because of disease occurring within a radius of the Insured's premises.  In the current case, the same approach was adopted where the business interruption had arisen because of disease occurring at the premises. The decision of Jacobs J was upheld by Males, Popplewell and Andrews LJJ in their joint judgment handed down on 6 September 2024.

The trial last year was one of The Lawyer's Top 20 Cases of 2023 and this year's appeal was one of The Lawyer's Top 10 Appeals of 2024.

The Judgment can be found here.

Government's flood plan shortcomings risk coverage, Flood Re warns

The Government's flood reinsurance scheme, Flood Re, has warned that due to a lack of transparency and consistency around flood mitigation in the planning system, the insurance sector's ability to cover new build properties for flood risks is under threat.  Flood Re had previously launched its plan in 2022 to implement additional defences to help prevent damage to those most at risk of flooding.

Celia Davis, Senior Projects and Policy Manager at the Town and Country Planning Association (TCPA) has said that "the planning system should play a vital role in delivering flood resilient new developments". However, the TCPA's research has revealed that the planning system is failing to deliver safe developments.  The Land Planning Authority has also called for improvements in the regulatory system.

You can read more here.

Private residential drives market recovery as inflation starts to ease

Private residential developments are boosting the construction sector as inflation and interest rates begin to ease.  The latest report from industry tracker Glenigan found that the value of private residential developments increased by 30% in the three months to the end of August 2024.  This figure remained 4% lower than in the same period last year.  However, the Glenigan Report suggests that recent trends show that conditions are improving and Glenigan Economist, Drilon Baca, has said that "as market inflation and persistently high interest rates start to ease, we're noticing an increasing confidence among developers, which is starting to buoy the residential market."

Social housing performed poorly, however, with project start-ups decreasing by 4% against the preceding quarter and 21% against the previous year. The most recent RIBA Future Trends Survey also shows a varied picture, with approximately 23% of construction companies expecting workloads to increase over the next quarter, 22% expecting workloads to decrease and 54% expecting them to stay the same.

You can read more here.

Homes England launches MADE Partnership

Barratt Developments PLC has entered into a joint venture with Homes England and Lloyds Banking Group to create MADE Partnership.  The long-term partnership will initially be backed by combined equity funding of up to £150 million, which will be provided equally by the three partners.

MADE Partnership will act as a master developer and will locate land for multiple large-scale, residential led developments ranging from 1,000 to 10,000 homes.  The projects will also include community facilities and employment uses, and consider development opportunities such as large brownfield developments and new garden village style communities.

You can read more here.

John Lewis Partnership submits plans for Reading rental flats scheme

The John Lewis Partnership (JLP) has submitted plans for the transformation of a former delivery depot in Central Reading into 215 rental flats.  The Partnership plans to invest more than £80 million into the scheme, which will be designed by Carey Jones Chapman Tolcher, and the homes will be built using sustainable and high performance materials.

The proposals reinforce JLP's ambition to create a rental housing brand that will manage properties specifically designed for rent, and follows a recent resolution to grant JLP planning consent to transform a Waitrose site in South London.

If approved, construction is expected to commence in early 2026, allowing the first residents to take occupancy in 2028.

You can read more here.

Green light to expand Oxfordshire Science Park

Architectural firm, Hawkins Brown, has been given the green light for a mixed-use scheme near Oxford, expanding Begbroke Science Park across 170 acres of land.  Planning approval was granted by Cherwell District Council on 5 September 2024.

Oxford University Development, the project client, has said that the scheme will "redefine the model for a 21st century community" as 1800 new homes will be built around four parkland areas, which will cover 50% of the site.  The new homes will accompany more than 50 pre-existing engineering and life sciences firms and there are also plans to build three new schools and a range of community facilities, including shops and restaurants.

Oxford University Development's Chief Executive, Anna Strongman, believes that the planning approval is "a major step forward in our ambition to deliver sustainable communities in Oxfordshire that will enable world-leading research and innovation to continue alongside much needed homes."

You can read more here.

Authors: Catherine Stead, Sky Arklay & Emily Twomey

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.