Right to claw back for KPIs compromised by settlement (Family Mosaic v Mears)

Right to claw back for KPIs compromised by settlement (Family Mosaic v Mears)

First published on LexisPSL Construction on 10/05/2016

Family Mosaic Housing v Mears Ltd [2016] Lexis Citation 47

Recorder Lofthouse QC in the Technology and Construction Court considered a partnering contract for repair and maintenance works, and held that the employer’s right to claw back payment where the contractor failed to meet specified targets had been compromised in a settlement agreement. In reaching its decision, the court considered the natural and ordinary meaning of the words used in, and the background to, the settlement agreement.

What was this case about?

Family Mosaic entered into a term partnering contract with Mears in July 2010, under which Mears agreed to provide responsive repair and maintenance works to Family Mosaic's properties in and around London. The contract was based on the ACA Standard Form of Contract for Term Partnering TPC2005 (amended in 2006), as part of which Mears was to achieve specified key performance indicators (KPIs).

In September 2013, the contract was amended by a settlement agreement which provided a right for Family Mosaic to claw back sums paid to Mears where it failed to meet KPIs.

In December 2014, the contract was further amended by a second settlement agreement, which set out the terms on which

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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.