GLOSSARY
Contractor definition
What does Contractor mean?
The contractor is the party selected by the employer to carry out and complete the building works. May also be referred to as the 'Main Contractor'.
Construction
The company or individual carrying out the construction or engineering works
The contractor is employed to carry out the works in relation to a development. Depending on complexity or size of a project he in turn may "sub contract" some of the works to specialists in, for example, electrical engineering or plumbing
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CDM Regulations 2007—the role of contractors [Archived]
ARCHIVED: This Practice Note has been archived and is not maintained. Note: The Construction (Design and Management) Regulations 2015, SI 2015/51 came into force on 6 April 2015, replacing the Construction (Design and Management) Regulations 2007, SI 2007/320. See Practice Notes: Construction (Design and Management) Regulations 2015 and CDM Regulations 2015—what's changed? [Archived].IntroductionContractors are those companies and individuals who actually carry out construction work. This hands-on’ role means that contractors are often those most at risk of suffering injury or otherwise damaging their health. The Construction (Design and Management) Regulations 2007, SI 2007/320 (the Regulations) allow contractors to have a role in planning and managing the construction work. The Regulations apply alongside the general duty which is placed on employees to take reasonable care of their own health and safety and that of others which is set out at section 7 of the Health and Safety at Work etc. Act 1974 (HSWA 1974).Please note that any reference to the term ‘client’ in this note is synonymous with ‘employer’ as used in other practice notes in this context. ‘Client’ is used here to facilitate reference to the Regulations.Who is a contractor?The Regulations provide a wide definition of ‘contractor’ and it includes any person who manages
Construction insolvency—how to spot problems and how to protect yourself—contractors
Spotting the early symptoms of employer insolvency•most importantly, a contractor needs to keep alert to the employer's financial status•the contractor should take heed of ongoing rumours about the employer's financial position (either in the press or by word of mouth)•look out for official announcements to shareholders/the stock market (for example, profit warnings)•note any surprising or uncommercial omissions from the project made by the employer•keep aware of the employer's non-payment or late payment of other parties on this project, or on other projects being carried out by the employer•clearly, if the employer suspends work on the scheme without any adequate explanation or without commercial rationale, this may be a sign that the employer is unwilling to finance further work •confirm suspicions by carrying out a Dun & Bradstreet search/report, which should disclose, for example, any unsatisfied court judgments against the employerIf the employer is insolvent, see Checklist: Contractor steps to take if employer becomes insolvent—checklist.Contractor methods of protecting itself in advanceThere are various ways in which a contractor can protect itself in advance against the risk of an employer becoming insolvent during the course of a project. Other than the specific items going towards the security package which a contractor might wish to see put in place
Construction industry scheme—contractors' obligations
This Practice Note details the obligations imposed by the construction industry scheme (CIS) rules on contractors, covering the requirement to:•register as a contractor•verify the employment status and CIS payment status of its sub-contractors•where relevant, deduct tax from payments made to sub-contractors•pay the withheld tax and submit CIS returns to HMRC on a monthly basis, and•preserve tax recordsThe CIS was devised to limit the amount of tax lost as a result of sub-contractors in the construction industry under-declaring or failing to notify their chargeability to UK tax.For an overview of how the CIS works, see Practice Note: Construction industry scheme—overview.The scheme operates to withhold tax at source at the point of making a 'contract payment', thereby reducing the risk of a subsequent default by the sub-contractor. However, if the sub-contractor can prove it has complied with its tax obligations, and applies for gross payment status, it is able to receive payments gross.The obligation to deduct tax imposed by the CIS rules applies only to a contract payment made by a contractor. Furthermore, the tax deduction is not applied to the gross amount of the contract payment, but to a smaller sum, net of the direct cost of materials and certain other costs. For more information on what payments constitute contract payments and what
The construction industry scheme—when does it apply?
The construction industry scheme (CIS) was devised to limit the amount of tax lost as a result of sub-contractors in the construction industry under-declaring or failing to notify their chargeability to UK tax.Unless the sub-contractor to whom a payment is made is registered for gross payment, the scheme requires a contractor who makes a payment under a construction contract to withhold tax at source at a rate of:•30%, or•if the recipient sub-contractor is registered with HMRC, 20%from so much of the payment as does not represent the cost of materials used in carrying out the construction operations.Imposing the tax at the point of payment reduces the risk of a subsequent default by the sub-contractor. If the sub-contractor can prove he, or if a company, it, has complied with his/its tax obligations he/it can apply to receive payments gross.For more detail on the obligations imposed by the CIS rules, the conditions that must be satisfied for a sub-contractor to be registered for gross payment and what types of payment are exempt from withholding tax imposed by the CIS rules, see Practice Notes:•Construction industry scheme—contractors' obligations•Construction industry scheme—sub-contractors' obligations, and•Construction industry scheme—contract paymentsFor an overview of how the CIS works, see: Construction industry scheme—overview.This Practice Note covers:•the meaning of construction operations, and•to whom
Parties in a construction project
This Practice Note identifies the key parties involved in most construction projects (including the employer, the contractor, the professional team of consultants (designers and non-designers), sub-contractors and funders) and provides an introduction to their roles and their relationships with one another, including the contracts that are entered into between them.For an illustration of the way a development project may be structured and the contractual nexus between the parties involved, see: Structure of a development project—diagram.EmployerThe employer (who may be referred to alternatively as the client or the developer) is the party for whom the construction works are to be carried out. The employer is often, but not always, the party who owns the site upon which the works are to be constructed.The employer will typically appoint a professional team, comprising various consultants, to help it to develop a project brief and produce designs etc in preparation for inviting contractors to tender for the job. The first to be appointed will typically be the architect. The employer will enter into an appointment with each of the consultants that it engages—see: Consultants on construction projects—overview.Following a tender process, the employer will select a contractor who will carry out the building works—the professional team will typically assist the employer with the process of selecting a contractor and give advice
Third party interests in construction projects
In a construction project, the contractor’s contractual relationship under the building contract is only with the employer. However, in most construction projects, there will be other third parties who will have an interest in the terms of the building contract, the way that the works are carried out and/or in the end-product. They do not ordinarily have any contractual nexus with the contractor under the building contract and therefore, if they suffer losses due to an act or omission of the contractor, cannot seek redress by claiming damages for breach of contract. Therefore, both the third parties and the employer will want to ensure that their interests in the works are protected so that, in the event that they suffer losses, they have a route of redress. This Practice Note looks at third parties who are typically interested in construction projects and how their interests are commonly protected. It looks at how an employer can seek to pass down obligations under the agreements that it has entered into with third parties (eg funding agreements, agreements for lease and planning-related agreements) under the building contract. It also looks at how third parties’ interests can be protected by way of collateral warranties, third party rights and by giving them other rights under the building contract.This Practice Note talks primarily about the
The contractor's programme
This Practice Note considers the status of the programme in a construction contract, what difference it makes if the programme is a contract document and the approach of standard form contracts to the programme.The programme is an important document in any construction project. It assists the contractor to organise the project and plan the execution of the works. It also helps the employer and contract administrator to monitor progress, measure the contractor’s performance and assess delay.What are the parties’ obligations in relation to the programme?In general, unless the construction contract states otherwise, the contractor can programme the works and carry them out in such order as it sees fit and the employer has little influence over the sequencing and activities. In GLC v Cleveland Bridge and Engineering (1984) 34 BLR 50 (not available in LexisNexis®) the court stated that the contractor is usually entitled to 'plan and perform the work as he pleases, provided always that he finishes it by the time fixed in the contract'.Without specific provision in the contract, an employer will have no means of redress if the contractor does not progress the works at a reasonable rate. In Leander Construction v Mulalley, the court refused to imply a term into a sub-contract that the sub-contractor was to proceed regularly and diligently with its works. To counter this, some
Duty to warn
This Practice Note examines the extent to which contractors, sub-contractors and consultants have a duty to warn their employer of inadequacies that they discover in designs that have been produced, or works that have been carried out, by others.If a contractor or a sub-contractor identifies an error in designs that are provided to it, for it to build, by their employer or a consultant, does the contractor/sub-contractor have a duty to draw such flaws to the attention of its employer? If a consultant thinks that a contractor is carrying out (or may carry out) works negligently, should it warn its client? What is its potential liability if it does not?When does a duty to warn arise?There is no general ‘duty to warn’ in English law but, in certain circumstances, such a duty can be imposed.Implied dutyUnder some building contracts, the contractor has express design responsibility and therefore is clearly responsible for any flaws or inadequacies in it (see Practice Note: Design liability in construction contracts). In others, where the contractor/sub-contractor does not have liability for the design, there may still be some contractual requirement for it to bring inadequacies, inconsistencies etc in the design to its employer’s attention so that they can be resolved (see, for example, clause 2.15 of the JCT Standard Building Contract With Quantities 2011/2016). The contract will then
Applying for a Workers and Temporary Workers sponsor licence: key personnel and representatives
Applying for a Workers and Temporary Workers sponsor licence: key personnel and representatives When applying for a sponsor licence, an organisation must decide who will act as its 'Key Personnel' for the purposes of the licence and its relationship with the Home Office. These are: • Authorising officer (AO) • Key contact (KC) • Level 1 user • Level 2 user Roles, responsibilities and requirements The table below summarises the key duties and responsibilities of each role and the key requirements for the holder of each. The same person can fill all the roles or different people can fill different roles. All must be a paid member of staff of the applicant organisation and/or an ‘office holder’, unless one of the other possibilities shown in the table applies. An office holder is usually a person who has been appointed to a role of responsibility at the organisation but who is not employed by them, eg as a registered company director. The Sponsor Guidance gives more details of this. 'Paid members of staff' will not include temporary staff supplied by an agency. Only Level 2 users can be agency staff. None of the roles can be undertaken by contractors or consultants who are contracted to perform a specific function, although Level 1 and 2 users can be employees of a third party to whom a sponsor has contracted out its HR function, and legal representatives can act as
Right to work checks and illegal working: problem areas and practical tips
Right to work checks and illegal working: problem areas and practical tips This Practice Note looks at how advisers can balance the competing risks that arise in practice where an employer fails to conduct a compliant right to work check or comes to suspect that an employee does not have the right to work. For aspects relating to right to work checks on EEA and Swiss citizens, and their family members, before 1 July 2021, see Practice Note: Brexit materials—right to work checks. Suspected illegal working situations involve consideration of a number of intertwined issues including: • employment—employment law considerations are key as they regulate the employer’s decision whether or not to dismiss. Potential risks include unfair dismissal and discrimination claims. For further information, see Practice Note: Illegal working: dealing with employees • regulatory—an employer may become liable to pay a civil penalty (leading in some cases to a revocation of any sponsorship licence) for employing a person who does not have the right to work. See Practice Notes: Illegal workers—civil and criminal sanctions and Illegal working: dealing with a civil penalty • criminal—it is a criminal offence to employ a person who does not have the right to work while either knowing, or else having reasonable cause to believe, that the person is not entitled to undertake such work in the UK. See Practice Notes: Illegal workers—civil and criminal
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Consequences of termination clauses (construction contract)
Termination (consequences) Consequences of termination of a consultant’s appointment 1 Subject to the other provisions of this Agreement and without prejudice to any right of action then accrued to either party on termination the Consultant will be entitled to fees for all Services properly performed and completed at the date of termination of this Agreement. 2 [Upon termination the Employer
Net contribution clauses (collateral warranty)
Net contribution 1
Re-measurement clause
Remeasurement 1 [Gross Internal Area means the gross internal area of the Premises expressed in square [feet OR metres] and measured in accordance with the Royal Institution of Chartered Surveyors’ Property Measurement (2nd Edition). OR Net Internal Area means the net internal area of the Premises expressed in square [feet OR metres] and measured in accordance with the Royal Institution of Chartered Surveyors’ Property Measurement (2nd Edition).] 2 When the [frame OR shell OR [other relevant point of construction]] of each of the relevant parts of the Works i
Concurrent delay clause
Concurrent delay
Systems integration agreement—pro-supplier
Systems integration agreement—pro-supplier This AgrEement is made on [date] Parties 1 [insert name of supplier], a company incorporated in [England and Wales] under number [insert registered number] whose registered office is at [insert address] (Supplier); and 2 [insert name of customer], a company incorporated in [England and Wales] under number [insert registered number] whose registered office is at [insert address] (Customer) (each of the Supplier and the Customer being a party and together the Supplier and the Customer are the parties). Background (A) The Customer wishes to procure software, [hardware], software configuration and development services, installation services and other related services. (B) The Customer has agreed to procure the Services from the Supplier and the Supplier has agreed to provide the Services to the Customer on the terms and conditions of this Agreement. The parties agree as follows: 1 Definitions and Interpretation 1.1 In this Agreement the following terms have the following meanings: Acceptance • means that: (a) the Customer confirms in writing that the Software has passed or is deemed to have passed the relevant Software Acceptance Tests; and/or (b) the Supplier confirms in writing that the Supplied Hardware has passed or is deemed to have passed the relevant Hardware Acceptance Tests, as the context so requires, and Accept shall be construed accordingly; Acceptance Criteria • means the criteria to be satisfied to demonstrate that: (a) the Software Acceptance Tests have been successfully completed as determined pursuant to
Legal due diligence questionnaire—private M&A—share purchase
Legal diligence'>due diligence questionnaire—private M&A—share purchase Dated [insert date] Introduction This legal due diligence questionnaire relates to the proposed purchase by [insert buyer name] (the Buyer) of the entire issued share capital of [insert name of target company] Limited incorporated in England and Wales under number [insert company number] (the Company) from [insert seller name] (the Seller) (the Proposed Acquisition). This questionnaire is designed to enable the Buyer, the Buyer's solicitors and other professional advisers involved in the Proposed Acquisition to obtain the information which the Buyer requires to assist in its valuation of the Company. Please answer every question fully. Please provide your answers in italics underneath each question and provide copies of all relevant documentation, ensuring that all answers and documents are clearly marked by reference to the appropriate paragraph of this questionnaire. We reserve the right to raise further enquiries in respect of both your responses to this questionnaire and generally. Definitions Business • means the business of [insert description of the business] and all other activities including those ancillary or incidental to or in connection with such business as carried on by the [Company OR Group] CA 2006 • means the Companies Act 2006; Contractor • means any individual working in a Group Company’s business who is not an Employee or Worker; Data Protection Laws • means as applicable and binding on the Company: (a) Directive 95/46/EC; (b) the Data Protection Act 1998; (c) Directive
Knowledge manager role profile
Knowledge manager role profile 1 Knowledge manager details Name of firm [Insert name] Name of role holder [Insert name] Reports to [Insert name] Role type ☐ Full-time☐ Part-time☐ Contractor If a contractor role, length of contract [Insert details] Primary location [Insert location] Date role commenced [Insert date] Length of probation period [Insert details] End of probation review date [Insert date] 2 Role purpose The main function of the Knowledge manager position is to help champion organisation-wide knowledge sharing so that the organisation’s know-how, information and experience is shared inside and (as appropriate) outside the organisation with clients, partners, and stakeholders. The Knowledge manager will establish the framework and develop the tools required to manage the organisation’s knowledge assets. This includes developing and managing standard operating procedures to ensure consistent knowledge management across the service delivery teams. They are responsible for ensuring knowledge is developed and managed in a standard way. In support of this, the Knowledge manager will provide direction to the Strategy and Operations teams, which are responsible for developing knowledge assets for the service delivery teams to use. 3 Key responsibilities The Knowledge manager’s key responsibilities include: —taking the lead in developing and implementing the organisation’s knowledge management strategy; —in partnership with the leadership team, defining knowledge management requirements, goals, and strategies; —promoting knowledge sharing
New to role—in-house lawyers—meeting agenda—HR Director
New to role—in-house lawyers—meeting agenda—HR Director General Purpose of meeting Introductory meeting between [Insert your name], [insert your job title] and [insert name of HR Director], HR Director of [Insert name of organisation] Date and time of meeting [Insert date] at [insert time of meeting] [am OR pm] Attendees [Insert name of HR Director][Insert your name][[Insert names of any other invited attendees, eg your line manager]] Agenda Item Supporting documentation Person
Share purchase agreement—pro-buyer—corporate seller—conditional—long form
Share purchase agreement—pro-buyer—corporate seller—conditional—long form This Agreement is made on [insert day and month] 20[insert year] Parties 1 [Insert name of selling corporate entity] incorporated in [England and Wales OR [insert country of incorporation] OR with registered number [insert company number] whose registered office is at [insert address] (the Seller); 2 [Insert name of purchasing corporate entity] incorporated in England and Wales OR [insert country of incorporation] OR with registered number [insert company number] whose registered office is at [insert address] (the Buyer), and 3 [Insert name of guarantor entity] incorporated in England and Wales OR [insert country of incorporation]] with registered number [insert company number] whose registered office is at [insert address] (the Guarantor) [(each of the Seller, the Buyer and the Guarantor being a Party and together the Seller, the Buyer and the Guarantor are the Parties).] Background (A) The Company (as defined below) is a private company limited by shares and is incorporated in [England and Wales OR [insert country of incorporation]]. Details of the Company are set out in Schedule 1. (B) The Seller is the legal and beneficial owner of the Sale Shares (as defined below), being in aggregate the entire allotted and issued share capital of the Company. (C) The Seller has agreed to sell and the Buyer has agreed to purchase the Sale Shares on the terms of this Agreement. (D) The Guarantor
Personal data sharing agreement—independent controllers—one-way
Personal data sharing agreement—independent controllers—one-way This Agreement is made on [date] Parties 1 [insert name of disclosing party] [of OR a company incorporated in [England and Wales] under number [insert registered number] whose registered office is at] [insert address] (Disclosing Party), and 2 [insert name of receiving party] [of OR a company incorporated in [England and Wales] under number [insert registered number] whose registered office is at] [insert address] (Receiving Party), (each of the Disclosing Party and the Receiving Party being a party and together the Disclosing Party and the Receiving Party are the parties). Background (A) The parties have identified a requirement to share the Shared Data for the Permitted Purpose. (B) The parties have decided to create a framework for the [systematic OR ad-hoc OR one-off] sharing of the Shared Data, which is likely to require sharing of the Shared Personal Data. (C) The Disclosing Party considers that it may share the Shared Personal Data with the Receiving Party on the legal basis of the Permitted Lawful Basis. (D) [The parties have completed a data protection impact assessment in respect of the planned sharing of the Shared Personal Data under this Agreement, and have agreed that this Agreement will assist with mitigating certain risks that have been identified.] (E) The parties’ objectives in sharing the Shared Personal Data, and the reasons why that is necessary, are set out at paragraphs
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Where an outsourcing agreement provides that the transferor is responsible for employment-related liabilities arising ‘on or before the transfer date’, does this mean that, if the transferee terminates the employment of a relevant employee on the transfer date itself the transferor might be liable for the termination costs?
Where an outsourcing agreement provides that the transferor is responsible for employment-related liabilities arising ‘on or before the transfer date’, does this mean that, if the transferee terminates the employment of a relevant employee on the transfer date itself the transferor might be liable for the termination costs? Position under TUPE 2006 Under regulation 3(1)(a) of the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE 2006), SI 2006/246, a business transfer occurs where there is: • a transfer of an undertaking or business (or part of an undertaking or business) • situated immediately before the transfer in the UK • to another person • where there is a transfer • of an economic entity • and the economic entity retains its identity after the transfer For further information, see Practice Note: TUPE—business transfers. Under TUPE 2006, SI 2006/246, reg 3(1)(b), a service provision change takes place where: • activities cease to be carried out by a person ('a client') on his own behalf and are carried out instead by another person on the client's behalf ('a contractor') • activities cease to be carried out by a contractor on a client's behalf (whether or not those activities had previously been carried out by the client on his own behalf) and are carried out instead by another person ('a subsequent contractor') on the client's behalf, or • activities cease to be carried out by a contractor or a
Which employees will transfer on a service provision change where the number of employees working on the relevant contract varies, due to the work being seasonal in nature?
Which employees will transfer on a service provision change where the number of employees working on the relevant contract varies, due to the work being seasonal in nature? In order for an insourcing to amount to a service provision change within the Transfer of Undertakings (Protection of Employment) Regulations 2006 (TUPE 2006), SI 2006/246, reg 3(1)(b), the following conditions must be satisfied: • (immediately before transfer) there must be an organised grouping of employees (which may be a single employee) situated in Great Britain • (immediately before transfer) the principal purpose of the organised grouping must be the carrying out of the activities on behalf of the client • (immediately before transfer) the client must intend the activities to be carried out by the transferee • the client must intend the activities not to relate to a single specific event or short-term task • the activities must not consist wholly or mainly of the supply of goods for the client's use For further information on service provision changes generally, see Practice Note: Service provision changes. Where there is a relevant transfer, subject to an employee's right to object to the transfer, the contracts of employment of those employees employed by the transferor and 'assigned to the organised grouping of resources or employees that is subject to the relevant transfer', and which would otherwise be terminated by the transfer, automatically transfer to the
A local authority employs 20 people with disabilities through a scheme to help them work in various 'host' organisations, paying a salary to the employees and receiving a small contribution from the host organisations. The substantial cost to the local authority is no longer affordable. What is the best way to resolve this situation?
A local authority employs 20 people with disabilities through a scheme to help them work in various 'host' organisations, paying a salary to the employees and receiving a small contribution from the host organisations. The substantial cost to the local authority is no longer affordable. What is the best way to resolve this situation? This enquiry comprises two questions: • whether, if the host organisations were to decide to employee the employees directly, this would be a relevant transfer under the Transfer of Undertakings (Protection of Employment) Regulations 2006 (SI 2006/246) (TUPE 2006) • whether, if the local authority were to decide to terminate the employment of the employees, the dismissals would be for redundancy or 'some other substantial reason' (SOSR) justifying the decision to dismiss These issues are considered below. TUPE transfer TUPE 2006 applies when there is a 'relevant transfer'. This covers: • a business transfer: a transfer of an undertaking, business or part of an undertaking or business, situated immediately before the transfer in the UK to another person where there is a transfer of an economic entity which retains its identity • a service provision change: involving a change in the provider of a service, ie a client 'outsourcing' work to a contractor (first generation outsourcing), bringing that work back in-house ('insourcing') or re-assigning that work to another contractor (second generation outsourcing), where certain conditions are satisfied For further
An individual is employed by one group company (A) and works for another group company (B) and possibly other group companies, with Company B cross-charged for salary and other costs relating to the individual. If Company A is ‘demerged’ from the group, can the individual assert that their employment has transferred under TUPE 2006 to Company B?
An individual is employed by one group company (A) and works for another group company (B) and possibly other group companies, with Company B cross-charged for salary and other costs relating to the individual. If Company A is ‘demerged’ from the group, can the individual assert that their employment has transferred under TUPE 2006 to Company B? For information on demergers generally, see: Demergers—overview. You may wish to consider: • whether the proposed demerger amounts to a (a) business transfer or (b) service provision change (SPC) under the Transfer of Undertakings (Protection of Employment Regulations) 2006 (TUPE 2006), SI 2006/246 • if so, the effect of a relevant transfer under TUPE 2006, SI 2006/246 on employees of Company A (ie would the transfer have the effect of transferring those employees to Company B, which would depend on the nature of the transfer) • if the employee is unable to establish the desired right under TUPE 2006, SI 2006/246, whether it is possible for them to assert that they are in fact (and were pre-transfer) employed by Company B, despite, for example, having a contract of employment with Company A Is there a business transfer under TUPE 2006? A relevant transfer under TUPE 2006, SI 2006/246 may take the form of: • a business transfer • a service provision change A business transfer under TUPE 2006, SI 2006/246 occurs where there is: • a transfer of
Does a construction company that provides subcontractors with a van (including all fuel and running costs) for use on their construction projects have any CIS obligations in relation to the provision of the van?
Does a construction company that provides subcontractors with a van (including all fuel and running costs) for use on their construction projects have any CIS obligations in relation to the provision of the van? The construction industry scheme (CIS) was devised to limit the amount of tax lost as a result of subcontractors in the construction industry under-declaring or failing to notify their chargeability to UK tax. For further information, see Practice Note: The construction industry scheme—when does it apply? Scope of CIS The obligation to deduct tax imposed by the CIS rules applies only to a contract payment. A ‘contract payment' is defined as: ‘… any payment which is made under a construction contract and is so made by the contractor (see section 57(3)) to— (a) the sub-contractor, (b) a person nominated by the sub-contractor or the contractor, or (c) a person nominated by a person who is a sub-contractor under another such contract relating to all or any of the construction operations.’ Even if a payment falls
What is the business rates liability where various contractors’ companies are using the same building on a building site for offices where the contractors of each company are using the same areas of the building with no designated areas set aside for use by each company?
What is the business rates liability where various contractors’ companies are using the same building on a building site for offices where the contractors of each company are using the same areas of the building with no designated areas set aside for use by each company? Liability for business rates The Local Government Finance Act 1988 identifies three categories of ratepayer: • occupiers • owners, and • persons named in central rating lists An occupier is a person who on any day in a chargeable financial year (ie a period of 12 months beginning 1 April) is in occupation of all or part of a hereditament that is shown for the day in a current local non-domestic rating list. An owner is the person entitled to possession of the hereditament. He is rateable if the hereditament is unoccupied, he owns the whole hereditament that is shown for the day in a current local non-domestic rating list and the hereditament falls within a class prescribed by the Secretary of State by regulations. Building sites To confirm, buildings in the course of construction or alteration are not in the beneficial occupation of the building owner, although it may be otherwise while repairs or adaptations of a building already in use are in progress. However, parts of a building site may be in the rateable occupation of the building contractor. For example, a show house was
Is a contractor entitled to an extension of time if construction works are delayed due to the impact of coronavirus (COVID-19)?
Is a contractor entitled to an extension of time if construction works are delayed due to the impact of coronavirus (COVID-19)? The answer depends entirely on the contract between the parties. Standard form contracts provide for the granting of extensions of time and these usually include a provision for force majeure which would include the effects of coronavirus (COVID-19). The JCT standard forms of building contract contain an extension of time provision which defines the contractor’s entitlement to an extension of time by reference to ‘relevant events’. The definition of relevant events includes ‘force majeure’. The JCT standard forms do not contain a definition of force majeure, therefore, it is necessary to consider the common law position as it pertains to frustration. In Davis Contractors v Fareham UDC, the House of Lords gave what is now regarded as the classic definition of the doctrine when it said that frustration: ‘…occurs wherever the law recognises that without default of either party a contractual obligation has become incapable of being performed because the circumstances in which performance is called for would render it a thing radically different from that which was undertaken by the contract. Non haec in foedera veni. It was not this that I promised to do.’ A force majeure clause will be construed in each case with a close attention to the words which precede or follow it,
How could the funder of a ‘first purchaser’ of a construction development obtain rights against the construction/design team?
How could the funder of a ‘first purchaser’ of a construction development obtain rights against the construction/design team? It is standard market practice for warranties to be provided by the construction/design team to the following beneficiaries: • funder of the development • any first purchaser of the whole or a substantial part • any first tenant of the whole or a substantial part • employer (if the warrantor is a consultant or sub-contractor) • freeholder Where a purchaser is the 'first' purchaser from the employer/developer, a typical construction contract will provide, therefore, that the first purchaser will be entitled to receive a collateral warranty equivalent (ie on the same terms) to that given to the employer/developer, from the same contractor/consultant/sub-contractor. Any other beneficiaries not listed above, ie the funder of a first purchaser, would be considered unusual and the warrantor would be likely to resist providing any such additional warranty (although the funder could always request one, the warrantor may agree). See: Collateral warranties—checklist. This
Can a lay personal representative charge for their time spent in dealing with the administration of an estate?
Can a lay personal representative charge for their time spent in dealing with the administration of an estate? A personal representative is a fiduciary. The general rule is that a fiduciary cannot benefit from their position and therefore cannot be paid for carrying out their duties (Robinson v Pett). Professional executors would, of course, not take on the role if they did not receive payment for their time. Therefore, most Wills include a charging clause which authorises a professional executor to charge for their services (see section 28 of the Trustee Act 2000 (TrA 2000)). In addition, TrA 2000, s 29 authorises a trust corporation to charge reasonable remuneration if there is not a charging clause. TrA 2000, s 29 also authorises a professional personal representative to receive reasonable remuneration provided the other trustees agree to this in
Where a sub-contractor has a number of unpaid invoices, can it commence a single adjudication in respect of all of them or would this constitute multiple disputes?
Where a sub-contractor has a number of unpaid invoices, can it commence a single adjudication in respect of all of them or would this constitute multiple disputes? This Q&A assumes that there is a dispute as to valuation of works carried out under a single unified construction contract between a contractor (C) and its sub-contractor (S) which is subject to the Housing Grants, Construction and Regeneration Act 1996 (HGCRA 1996) but does not include bespoke provisions as to referral to adjudication, and thus, Part 1 of the Scheme for Construction Contracts (the Scheme), SI 1998/649 applies. A party to a construction contract has a right to refer ‘a dispute arising under the contract’ to adjudication at any time under HGCRA 1996, s 108(1). It is very important for a party considering referring a matter to adjudication to consider closely whether an adjudicator will have jurisdiction to resolve the relevant factual dispute (or disputes) within a single adjudication, or whether several adjudications are necessary. See Practice Note: The adjudicator's jurisdiction for a summary of the applicable principles. Where consideration is not given to this issue, it may be that the referring party obtains an award from an appointed adjudicator but soon realises that the responding party will refuse to pay on the grounds of a lack of jurisdiction. The referring party will therefore have spent significant sums in legal
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Settlement agreement between employer and surety did not bind contractor (ML Hart Builders v Swiss Cottage)
Construction analysis: The Technology and Construction Court (TCC) found that a settlement agreement made between the employer under a construction contract and the surety under a bond provided by the contractor was not binding on the contractor, in relation to the value of the final account under the construction contract. Further, the contractor was entitled to refer the value of the final account to a second adjudicator, where a previous adjudicator had declined to carry out the valuation.
Corporate Crime weekly highlights—30 June 2022
This week's edition of Corporate Crime weekly highlights includes analysis of the Law Commission's recent recommendation of changes to corporate criminal law, the implications of the high profile ENRC v Serious Fraud Office (SFO) judgment and changes to the UK Russian sanctions regime as at 23 June 2022. Also included is news of a financial penalty of £3m imposed on Carlsberg following a brewery ammonia leak, environmental permit compliance failures by Dairy Crest Ltd resulting in a £1.52m fine, the latest monthly round up of prosecution news from the SFO, and details of provisions of the Police, Crime, Sentencing and Courts Act 2022 (PCSCA 2022) which came into force on 28 June. All this, and more, in this week’s Corporate Crime highlights.
Indian Supreme Court to clear arbitrator appointment backlog across the country (M/s Shree Vishnu Constructions v The Engineer in Chief, Military Engineering Service)
Arbitration analysis: The Indian Supreme Court has passed directions to the provincial High Courts to decide all pending arbitrator appointment applications within a period of six months from the date of its directions. It has also directed the High Courts to decide and dispose of fresh applications, preferably within a period of six months from the date of filing. This case highlights the risks in contracting for ad hoc agreement to arbitrate that entails submission to the Indian courts for supervisory support, including to appoint an arbitrator. While this order of the Supreme Court is laudable and important, parties should provide for an arbitral procedure that is governed by the rules of a reputable arbitral institution to avoid having to resort to the Indian courts for appointment of arbitrators. Written by Sheila Ahuja (partner) and Amrutanshu Dash (associate) at Allen & Overy LLP.
The Procurement Bill: contract change—some good stuff but opportunities missed?
Public Law analysis: Changes to contracts during their term is one of the most fundamental issues in procurement law. The Procurement Bill (the Bill) aims to update the rules to align the law more closely to the reality in which these contracts operate. In this analysis, Jonathan Davey and Jack Doukov-Eustice of Addleshaw Goddard LLP look at the rules, which allow a contract to be modified without creating a new contract. As those used to dealing with procurement law will know, if a contract is substantially modified then that is treated as if a new contract had been awarded. What are the changes and what impact is this likely to have on everyday activity?
Banking and Finance weekly highlights—23 June 2022
This week's edition of Banking and Finance weekly highlights includes: (1) the LMA updates its REF Security Agreements and user guides, (2) the publication of the annual report for 2022 on the implementation of the National Security and Investment Act 2021, and (3) the Council of the EU and the European Parliament have reached provisional agreement on the EU’s Corporate Sustainability Reporting Directive (CSRD).
Construction weekly highlights—23 June 2022
This week's edition of Construction weekly highlights includes a case in which the Court of Appeal held that statutory adjudication rights under the Housing Grants, Construction and Regeneration Act 1996 (HGCRA 1996) extended to a collateral warranty (Abbey Healthcare v Simply Construct), a case in which the Technology and Construction Court (TCC) decided that a claim for remedial work costs under a collateral warranty was not too remote (Orchard Plaza Management v Balfour Beatty Regional), a case in which the TCC declined to enforce an adjudicator’s decision in favour of a company subject to a Company Voluntary Arrangement (FTH v Varis Developments), analyses of the impacts of the Building Safety Act 2022 (BSA 2022) from an insurance and Scottish perspective, and the publication of the Government Commercial Function’s guide to the Procurement Bill.
Online Safety Bill—are you caught?
TMT analysis: Louise Popple, Senior Lawyer at Taylor Wessing, discusses what providers of online content and services will need to do to determine whether they are in scope of the Online Safety Bill (the Bill).
Major extension of adjudication rights (Abbey v Simply)
Construction analysis: In an important judgment, the Court of Appeal has confirmed that statutory adjudication rights can extend to contracts other than those through which the construction works and services are paid for and performed. The Court of Appeal’s decision provides rare guidance on how section 104(1) of the Housing Grants, Regeneration and Construction Act 1996 (HGCRA 1996) is to be interpreted and the extent to which statutory adjudication applies. This is the first time the Court of Appeal has considered the issue of what is a ‘construction contract’ for adjudication purposes. Written by Barry Hembling (bhembling@wfw.com) of Watson, Farley & Williams LLP, who acted for the successful appellant in this case.
Limitation and the UK Building Safety Act: new claims and what insurers may have missed
Construction analysis: The Building Safety Act 2022 (BSA 2022) became an Act of Parliament on 28 April 2022. It brings with it the most wide-ranging changes to building safety that the UK has ever seen. Parts of the new Act will come into force as soon as 28 June 2022. Of particular note is section 135, which dramatically increases limitation periods for claims to be brought in connection with unsafe buildings. BSA 2022 does this by amending key parts of Limitation Act 1980, the Defective Premises Act 1972 and the Building Act 1984.
High Court clarifies extent to which interim valuation adjudication is binding on final accounting exercise (Essential Living v Elements)
Construction analysis: This case involves an employer’s Part 8 claim for declarations on the binding effect of a prior adjudication decision for the purposes of the ongoing final accounting exercise and any subsequent adjudication. The contractor argued that the adjudication decision was strictly confined to an interim valuation dispute and was therefore irrelevant to the parties’ final account dispute. The court held that an adjudicator’s determination of discrete issues (eg variations) as part of a decision on an interim valuation can remain binding for the purpose of the subsequent final accounting exercise. The court also held that where a contract expressly permits a post-completion review of a contractor’s entitlements to extensions of time, an adjudicator’s pre-completion assessment of extensions of time can be reopened, thus clarifying the scope of the court’s previous decision in Mailbox (Birmingham) Ltd v Galliford Try Building Ltd. Written by Mathias Cheung, barrister at Atkin Chambers.
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