It’s been quite a year for construction. This month we’re taking a brief look at some of the momentous events that have arisen in the past 12 months and their impact on the industry. We also take a guess at what we might expect to see in 2019.
Carillion & Retentions
The year got off to a bumpy start with the collapse of the government contractor, Carillion. The former Tarmac business had morphed into a creature many said was out of control. It became the biggest ever trading liquidation in the country. The collapse threw the spotlight onto many issues, not least that of retentions.
Which brings us to prediction number one:
It seems very likely that the government will do something about retention payments in construction. There’s now a substantial number of MPs who back the private members’ bill supported by BESA to put an end to retentions. You can find out more about the bill in our video from the seminar we held in Manchester.
Smash and Grab
As the year progressed, we came to the first major bit of case law in the courts. It seemed that at last, the days of the ‘smash and grab’ adjudication were over. If you missed it, check Bill Bordill’s article which explains what this is all about. The courts have now confirmed that the rules have changed. Take care if you’re used to working with adjudication as a method of dispute resolution.
This brings us to our second prediction:
On the back of the decision around adjudications, it seems likely there may be a legislative change. We’d anticipate clarification on what is acceptable, and what isn’t, in this complex area.
In October we came to another significant change. Tom Francis wrote about the alteration of the rules relating to ‘concurrent delay’. It has been confirmed that you can write into your contract how to manage concurrent delay. To an extent, it appears this contradicts the ‘prevention principle’. That’s the rule in common law preventing someone from profiting from their own malfeasance. We warned clients to take care to check your contracts don’t contain anything which might put you at risk.
So what does 2019 hold for construction beyond the points already discussed?
We probably ought to mention the elephant in the room: Brexit continues to rumble on. At the time of writing, Mrs May has held on to her job for the foreseeable (although the foreseeable doesn’t seem to be very long!). Who knows where it will all end, but we expect the world will continue to turn after March 2019! One of the biggest concerns for construction must surely be skills and labour. It seems unlikely that the taps of immigration will be turned off so firmly that we’ll stop building.
In the wake of last year’s Grenfell disaster, we also note that a new regulation regarding flammable products on buildings is due to come into force on 21 December. Thanks to ClarksLegal for highlighting this. Any building over 18 metres high after that date cannot have combustible materials fitted. The new rules won’t apply to existing structures.
Other than that, we’re sure to see a number of interesting rulings in the courts as the year progresses. Be sure to follow us on LinkedIn and Twitter, and subscribe to our mailing list for regular updates.
Thanks for reading, and Merry Christmas and best wishes for a prosperous and happy new year.