The Week That Was - 16 August 2024

Published on 16 August 2024

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

Damage caused in riots may not be covered by contractors' insurance

Damage caused to construction sites during the UK's recent outbreak of riots may not be covered by contractors all risk (CAR) insurance. These policies often do not cover intentional damage, damage caused by "malicious persons", or terrorism. As a result, contractors may not be able to claim compensation for damage arising from the recent civil unrest.

With riots continuing to take place over the UK, contractors who think their sites might be at risk of damage are urged to check the terms of their cover. Contractors who are unable to claim under their insurance policy may be able to make a claim for damage to property under the 2016 Riot Compensation Act instead.

You can read more here.

Construction growth rate at its highest in two years

Construction activity has grown at its fastest rate since May 2022. The industry has recorded its fifth consecutive month of growth.

The election in June resulted in a slowdown in growth in the industry, but it appears this was only temporary. The S&P Global UK construction Purchasing Managers’ Index rose to 55.3 in July from 52.2 in June. A score above 50.0 indicates that activity is increasing and anything below indicates that it is shrinking.

All 3 categories of construction saw activity increase in July. The fastest growth has been seen in civil engineering activity, where growth is at its highest in almost two and a half years. Housebuilders have also seen improvements, with new housing projects returning to growth after a recent drop caused by high interest rates.

You can read more here and here.

Supreme Court's decision in Abbey Healthcare v Simply Construct

In Abbey Healthcare (Mill Hill) Ltd v Augusta 2008 LLP (formerly Simply Construct (UK) LLP) [2024] UKSC 23, the Supreme Court decided that a typically worded collateral warranty is not a construction contract for the purposes of the Construction Act 1996.

The Supreme's Court decision has overturned the authority provided in Parkwood which suggested that collateral warranties could be construction contracts for the purposes of section 104 of the Housing Grants, Construction and Regeneration Act 1996. In both cases, the absence of a construction contract mattered in determining the statutory right to refer disputes to adjudication.

It is not yet known how the market might adapt following this decision.

You can read more here.

China reapplies to build 'super embassy' on Royal Mint site

The Chinese Government has resubmitted plans to construct a super-sized embassy on the site of the Royal Mint in London. The proposed project was designed by David Chipperfield Architects which includes 225 residences amongst a cultural exchange centre and ambassadorial functions spread across seven storeys. There will be substantial renovation to the existing buildings in addition to large scale demolition on two of the complex's existing buildings to make way for the proposed residences.

As the UK moved towards decimalisation in the 1960s, the Royal Mint relocated from London to a new plant near Llantrisant in South Wales.

If Tower Hamlets refuse the application and China appeals the decision, the application will be referred to decision makers at national government level.

Read more about the plans here.

Five-year campaign concludes with union access to HS2 tunnel sites

After a hard-fought campaign over five years, an agreement has finally been reached between Unite, GMB and a consortium of contractors, Skanska, Costain, Strabag (SCS), carrying out work on the HS2 Euston tunnels that will carry the high-speed trains in and out of central London. Under the agreement, union representatives will have access to the site to speak with workers about pay and conditions on the site and provide employment advice accordingly. The union's officers will be able to meet with workers in the site's rest areas during breaks and the union will also be able to attend induction meetings to be able to talk to new recruits.

Unite's general secretary Sharon Graham said: “The persistence and dedication of Unite construction members should be congratulated; it is their hard work which has ensured this access agreement has been signed. Construction workers based on the SCS project will now be able to freely consult a Unite official about all their employment and safety concerns".

The agreements signing means that now all major parts of the HS2 construction sites are covered by union access agreements.