Defects

Defects

Defects can be a major source of disputes on construction projects, including arguments about whether something is in fact a defect, the requirement (or right) for a contractor to rectify defects, latent (hidden) defects, the duty to warn about defects in other parties’ work and the appropriate remedy for defective work.

There is no common or universal definition of ‘defect’ but, in broad terms, it is work that does not meet a specification or standard required by a contract due to fault(s) in the work, materials or design, or because of deficiencies in the quality of the work. For more detail on what a defect is, how defects can arise, rights and remedies in relation to defects and relevant case law, see Practice Note: Defects claims in construction—What is a defect?

There is a distinction in construction law between patent and latent defects—the former is a defect that is detectable during the works or during a defined period following practical completion known, usually, as the defects liability period. Note that a defect does not have to have been observed/detected in order to be patent; it is sufficient

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Latest Construction News

Procedural and security for costs considerations when staying enforcement of an adjudicator’s decision where there is insolvency and a cross-claim (Midas Construction v Harmsworth)

Construction analysis: In Part 7 proceedings to enforce an adjudicator’s decision, the Technology and Construction Court (TCC), invited the parties to agree an appropriate order to stay the enforcement of that decision but held that it would be unfair and unsafe for the court to stage the related court proceedings in such a way as to defer the other party’s cross-claims, where this would put the other party in a worse position than if the insolvent party was solvent. The TCC also provided a summary of the principles to be taken into account in assessing the level of security for costs.

Paris Court of Appeal refuses to annul ICC Award, clarifying the limits of international public policy and due process challenges (Central Bank of Iraq v Cardno Middle East Ltd)

Arbitration analysis: In this decision, the Paris Court of Appeal (the Court) dismissed the Central Bank of Iraq (CBI)’s request to annul the arbitral award on multiple grounds. First, the court found that CBI’s claim that the recognition and enforcement of the award in France would violate French international public policy was inadmissible. It held that the allegations (such as fraud and misappropriation of public funds) pertained solely to private contractual disputes rather than actual matters of international public policy. Consequently, CBI was deemed to have waived its right to raise these irregularities by failing to do so in a timely manner during the arbitral proceedings. Second, the court dismissed CBI’s claim that the sole arbitrator would have violated due process and the principle of equality of arms. The court found that CBI had been given ample opportunity to participate in the proceedings but chose not to do so. It also found that the sole arbitrator had reasonably addressed CBI’s late request to reopen the proceedings, ensuring CBI had a fair chance to present its case. Third, the court dismissed CBI’s claim that the sole arbitrator would have failed to respect his remit. It concluded that the arbitrator was not required to address every argument raised by CBI, particularly since CBI did not submit a formal claim during the arbitration process. The sole arbitrator’s conduct was consistent with the agreed scope of the arbitration. Finally, the court rejected CBI’s ground for annulment based on the alleged lack of impartiality of the sole arbitrator. The court found that the arbitrator’s actions were neutral and objective throughout the proceedings, and that CBI’s claims of bias were unfounded. Therefore, the court dismissed all of CBI’s grounds for annulment. Written by Julie Spinelli, partner at Le 16 Law (with the assistance of Emma Ruby, associate at Le 16 Law).

Cabinet Office seeks feedback on Procurement Act 2023

The Cabinet Office has issued a fresh stakeholder survey as part of its Transforming Public Procurement programme, to test awareness and understanding of the Procurement Act 2023 (PA 2023) regime. The survey aims to gather insights and information to inform development of the programme. It includes a range of questions to gauge stakeholder understanding, confidence and information sources. It also seeks to assess how likely the additional flexibilities of the Competitive Flexible Procedure are to be used at this stage. The survey is anonymous and stakeholders are encouraged to give candid feedback. The survey closes on 27 May 2025.

Construction weekly highlights—8 May 2025

This week's edition of Construction weekly highlights includes a case where the Court of Appeal upheld a Technology and Construction Court (TCC) decision affirming that the appellant’s entitlement to levy delay damages was subject to a condition precedent (DBS v Tata), a case where the TCC considered inadvertent disclosure and the applicable principles to decide whether or not permission could be given to use those documents in the proceedings (The New Lottery Company v The Gambling Commission), CIOB’s response to the Government’s reaction to the Grenfell Tower Inquiry Phase 2 Report, publication of the Ministry of Housing, Communities and Local Government (MHCLG)’s impact assessment on the Planning and Infrastructure Bill (Bill) as well as the Royal Institute of British Architects (RIBA)’s recommendations for the Bill, and publication of the Royal Institution of Chartered Surveyors (RICS)’s UK Construction Monitor for Q1 2025.