Construction Law

Legal issues, news, and regulations concerning the construction industry

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Take Care When Drafting Definitions of “Practical Completion”
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FPSO Europe Congress 2019
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“If it isn’t broken…”: A practical guide to the effective use of standard forms of contract
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Pay First, Ask Questions Later: Court of Appeal Ruling on “Smash and Grab” Adjudications in S&T (UK) Limited vs. Grove Developments Limited
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Don’t Dump Stuff in the River
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Congratulations to our Doha Construction Team – “Property & Construction Team of the Year”
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Collateral Warranties: A Reminder of Their Importance
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Presentation Available: Mega Project Management
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New Planning Framework for the Western Sydney Aerotropolis
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Court Places Assets in the Freezer

Take Care When Drafting Definitions of “Practical Completion”

By Kevin Greene and Daniel R. Cartmell, K&L Gates, London

The December 2018 decision in University of Warwick v Balfour Beatty Group Ltd [2018] EWHC 3230 (TCC) provides valuable insight into how courts could interpret “Practical Completion” – a central concept in most construction contracts, but one that often lacks clarity and/or definitional precision.

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FPSO Europe Congress 2019

K&L Gates was delighted to participate in the FPSO Europe Congress 2019 in London 19-20 February, 2019.  K&L Gates partner Jeremy Farr chaired roundtable discussions on developing strategies for successful construction or conversion projects and spoke in plenary on the lessons the industry can learn to protect budgets based on his many years’ of experience of FPSO construction/conversion disputes.

Click here to access Jeremy’s presentation, “Experiences of FPSO/Construction Disputes: Learning the Lessons to Protect Budgets”

Click here to see a sneak peek into into Day 1 of the conference!

“If it isn’t broken…”: A practical guide to the effective use of standard forms of contract

By Kiran Giblin and Inga Hall

Standard form building contracts play an important role in many construction and engineering projects. There are various advantages to using standard form contracts (as further detailed below), with a wide array of standard forms available to suit the particular types of parties, works and procurement routes involved in virtually all construction and engineering projects.

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Pay First, Ask Questions Later: Court of Appeal Ruling on “Smash and Grab” Adjudications in S&T (UK) Limited vs. Grove Developments Limited

By Kevin Greene and Saya Lee

In an eagerly awaited judgment, the Court of Appeal upheld the TCC’s judgment in Grove Developments Limited v S&T (UK) Limited, confirming that the employer may adjudicate to establish the “true value of the sum due” in a second adjudication.

Background

In March 2015, Grove Developments Limited (“Grove”) engaged S&T (UK) Limited (“S&T”) to design and build a new hotel at Heathrow Airport under the JCT Design and Build Contract 2011 with amendments, for a contract value of £26.4m. Following a delay of over 5 months, practical completion was achieved in March 2017. The parties subsequently conducted an adjudication to decide if Grove’s pay less notice dated 18 April 2017 was invalid on the basis that it was served late.The adjudicator decided, in S&T’s favour, that the pay less notice was invalid. 

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Don’t Dump Stuff in the River

By David L. Rieser

So, you are managing a major construction site in downtown Chicago. It’s been raining and you have thousands of gallons of silty water which you need to get off site. You can: (a) store it in tanks and then truck it to a waste water treatment facility; (b) discharge it to the local sewer under proper sewer authority; or (c) pump it into the river in full view of thousands of commuters walking over the bridges from the local train stations.

Most of us would agree that (c) would be the least optimal choice, but an editor for the Chicago Tribune took a very graphic picture of a construction worker doing exactly that, holding a pipe spewing thousands of gallons of grey silty water into the river and creating an extremely obvious and damning plume. He posted it to Twitter where it was seen by employees of the Illinois EPA and the Illinois Attorney General’s Office, who promptly sued the construction companies and the site owner for violation of federal and state clean water laws.

While this will no doubt create headaches for the defendants, this is, as they say, a teachable moment. First, construction companies must have a plan for managing stormwater. There is a General Permit issued by EPA under the Clean Water Act for construction activity, which lays out a number of requirements and best practices. There have been a number of cases brought against companies for violating this permit, generally for obvious issues, which could have been avoided with better management and focus. The conditions of these permits are available, and there are any number of environmental professionals who would be glad to work with construction companies to make sure these issues are addressed.

Second, even if there is a plan, it is management’s responsibility to train and work with the employees to make sure it’s implemented. It’s easy to look at this picture and blame the guy with the hose, but he had supervisors who either directed him or didn’t give him enough direction, other supervisors on site who weren’t paying attention to what he was doing, and still other supervisors who didn’t sufficiently stress that not dumping stuff in the river was as important as any other job on site.

Third, whatever the above steps might cost, it will be cheaper than dealing with this lawsuit. Fines under the Illinois Environmental Protection Act can run up to $10,000 per day, per violation. The actual amount of Illinois fines can fluctuate greatly, but they have generally been going up, and I doubt that Illinois will be talked into giving a slap on the wrist for this one. Had the federal government brought this action, the defendants would be looking at a minimum of $37,500 per day, per violation. In some particularly ugly circumstances, intentionally dumping stuff in the river can lead to criminal penalties, including jail.

So the bottom line is: Don’t do this. Plan for managing stormwater, train your employees and subs to implement the requirements, and supervise the site to make sure it is being done right.

Congratulations to our Doha Construction Team – “Property & Construction Team of the Year”

K&L Gates is proud to annouce that our Doha-based Construction & Infrastructure team was recently named the “Property & Construction Team of the Year” by the Qatar Business Law Forum. Members of our Doha office are pictured below accepting the award, which was presented on 13 November 2018.

 

 

 

 

 

 

Collateral Warranties: A Reminder of Their Importance

By Kevin Greene and Daniel Cartmell, K&L Gates, London

The judgment of O’Farrell J in Swansea Stadium Management Co. Ltd v Swansea City and County Council ([2018] EWHC 2192 (TCC)) provides guidance on collateral warranties and acts as a warning for any potential claimants to be mindful of any limitations of time in which to commence proceedings under them.

The facts of the case are fairly straightforward. The City & County of Swansea (the “Council”) is the freehold owner of the Liberty Stadium, home to Swansea City Football Club and the Ospreys.  The Council leased the Stadium to Swansea Stadium Management Company (the “Claimant”), which is the management company for the Stadium.  Interserve Construction was employed by the Council to design and construct the Stadium under a JCT Standard of Form of Building Contract with Contractor’s Design 1998 Edition (subject to certain bespoke amendments) (the “Building Contract”). Read More

New Planning Framework for the Western Sydney Aerotropolis

Clive Cachia, Kirstie Richards

What has happened?

The NSW Government has played its hand in setting out the priorities for the proposed development of the Western Sydney Aerotropolis by releasing the draft Stage 1 Land Use and Infrastructure Implementation Plan (Draft Stage 1 Plan).

Further to our earlier updates on the development of the Western Sydney Airport (see here and here), the Aerotropolis will serve as Western Sydney’s new economic hub to support the massive public and private investment needed to construct and operate this once in a lifetime infrastructure development.

The Draft Stage 1 Plan provides clarity on the proposed re-zonings and sequencing of development for the Aerotropolis. The NSW Department of Planning and Environment (DP&E) is seeking feedback on the Draft Stage 1 Plan until 2 November 2018. See link for details on how to make a submission on the Draft Stage 1 Plan.

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Court Places Assets in the Freezer

By Sandra Steele and Michael O’Callaghan, K&L Gates, Sydney

The Supreme Court of Western Australia has recently made a freezing order in the matter of Trans Global Projects Pty Ltd (In Liquidation) (TGP) v Duro Felguera Australia Pty Ltd (Duro) [2018] WASC 136.

This decision sheds light on:

  • the factors that the Court will consider in granting a freezing order (i.e. an order whereby the assets of a company are “frozen” so that the company cannot dispose of or deal with those assets)
  • the circumstances in which a Court will issue a freezing order to enforce an arbitral award.

In short, the Court ordered that AUD20 million of Duro’s assets be frozen as Justice Tottle was persuaded that there was a danger that a prospective judgment based on an arbitral award against Duro would be wholly or partly unsatisfied because there was danger that the assets of Duro would be removed from Australia (or disposed of, dealt with or diminished in value). The Court made this determination notwithstanding Duro’s cross claims against TGP.

Read the full alert on K&L Gates HUB.

 

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