If there’s one thing you can confidently predict about 2006 it’s that the rows that raged in 2005 will rage on. In case you needed reminding, here they are …
After the Christmas break has wiped day-to-day issues from the memory, which events of 2005 linger in the mind of the average construction lawyer?
For my part, I recall seemingly endless consultations on the minutiae of possible changes to Construction Act and the Scheme for Construction Contracts.
Do we want section 110(2) notices or not? Do we want to write the universal payment clause? What about reasons for adjudicators’ decisions and interest on their awards? In the overall scheme of things, will any of it make much difference? Sadly the one thing that might have simplified life was missed, as it was decided that it was not appropriate to adopt a single set of rules for adjudications.
At the same time, the run of seminal cases on adjudication, which started with the new millennium, seems to have come to an end. Perhaps this suggests that the procedure is operating in a satisfactory way and lawyers have pretty well tested its boundaries. Can they now leave it alone? Probably not …
Then there were all the consultations on proposed changes to the CDM regulations, intended to address the industry’s lamentable site safety record. Change is undoubtedly necessary but will the correct changes be made? Is it true that clients are the biggest hindrance to the improvement of health and safety standards? If the answer is “no”, and the law moves in this direction, will improvement result? The previous regulations generated words but not much real improvement. Does the answer lie in more effective enforcement and increasing the resources available to the Health and Safety Executive rather than altering the regulations? Meanwhile the shortcomings in the law relating to corporate manslaughter have been exposed.
All those big consultancies that remained partnerships seem to have converted to limited liability partnerships. Will this change the culture of the professions? Will it lead to a more corporatist approach? It seems that it must.
The British Property Federation’s consultancy agreement was hijacked by the consultants’ lobby
And 2005 was the year of the big argument over whether it is fair for consultants to cap their liability for negligence, so that the client bears the costs of their negligence in excess of the cap. How can this issue be resolved? Is the only way forward to use design-and-build contracts on big projects? The launch of the British Property Federation’s standard form of consultancy agreement was a sensible attempt to introduce some order into the chaos. Unfortunately it was hijacked by the consultants’ lobby, at least in part because it did not contain caps. Will there ever be a sensible middle ground, or are the parties too polarised?
The launch of JCT 2005 contracts was a welcome improvement and rationalisation of the 1998 suite of documents. It removed many of the anomalies of the past; for example, nominations are gone and the contractor’s role in the design of the project is acknowledged. Thankfully the main forms now embrace the use of third-party rights, which have begun to replace collateral warranties over the past 12 months . Could this perhaps lead to a sensible “solution” to the perennial problem of the net contribution clause?
The industry heralded the death of construction management (again) after Laing’s problems on the Great Eastern Hotel refurbishment. But the effective use of construction management by big clients on big projects continues as successfully as it always has.
There seems to be less talk about partnering agreements but more collaborative working. Is the industry learning that good practice lies in good management, not well-worded charters?
And what do we foresee for 2006? For starters, there’s the work flow generated by the Olympics and the acceleration of expenditure on infrastructure and regeneration in the Thames Gateway. We also have the first of the megatower projects starting to emerge on the London’s City skyline. And, of course, there’s the increased focus on affordable, sustainable housebuilding by dynamic new entities. So here’s hoping for a prosperous new year …
Ann Minogue is a partner in solicitor Linklaters