Construction—Lexis®PSL comments on key developments in 2018 and 2019

Construction—Lexis®PSL comments on key developments in 2018 and 2019

 

In this year’s end of year comment, our Lexis®PSL Construction team consider what their standout legal developmentwas in construction in 2018 and preview the anticipated talking points for 2019. 

First published on Lexis®PSL on 12 December 2018.

What was the standout legal developmentin your area this year?

For us, the standout developmentwas the Grove v S&T litigation, specifically as it concerned interim payments under the Housing Grants, Construction and Regeneration Act 1996 (HGCRA 1996). In February, the Technology and Construction Court (TCC) held that an employer was able to challenge, by way of further adjudication, the amount due to a contractor in respect of an interim application, by reference to the true value of the works—even if the employer had not given a valid payment notice or pay less notice ([2018] EWHC 123 (TCC)177 ConLR 30). This was then upheld by the Court of Appeal in November ([2018] EWCA Civ 2448).

How has this impacted on practice in your area?

The HGCRA 1996 sets out a regime for payments in construction contracts, largely in order to ensure the cash flow of contractors. The regime operates on a system of notices—often the contractor makes an application for payment to the employer, and the employer then gives a payment notice followed by a pay less notice. However, as shown by the amount of case-law on this issue, it is not unheard of for an employer to fail to give either a valid payment notice or pay less notice.

Prior to Grove v S&T, if the employer failed to give either notice, it would be deemed to have agreed to the amount claimed in the contractor’s application (ISG v Seevic  [2014] EWHC 4007 (TCC)157 ConLR 107 and Galliford Try v Estura  

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About the author:

Jon is a Professional Support Lawyer at LexisNexis, specialising in construction law.

Jon trained at Hogan Lovells and qualified into the construction disputes team there in 2011. He joined LexisNexis in February 2016. Jon has experience of acting for various parties (including employers, main contractors, subcontractors and project managers) in relation to disputes arising out of construction and engineering projects in various jurisdictions. Jon has acted for clients in TCC litigation, arbitration, adjudication and mediation as well as providing advice on various aspects of construction and engineering projects.