Legal Developments In Construction Law: February 2024

• Published date: 06 March 2024
• Law Firm: Mayer Brown
• Author: Mr Richard Craven

In this issue

1. "Smash & grab" claim + true value claim = one adjudication dispute, or two?
2. Fraud: can an exclusion clause exclude or limit liability?
3. Duty of good faith: when might one be implied?What might such a duty mean? Could other cases provide the answer?
4. 2025 start for new retention reporting requirements?
5. 'Golden thread' (in occupation), and safety risks management, regulations now in force
6. More Building Safety Act provisions brought into force
7. Government guidance on HRB non-determination applications
8. Building Safety Levy: response to last consultation and launch of technical consultation
9. MF/1 2024 (Revision 7)
10. More HSE mandatory occurrence reporting guidance

1. "Smash & grab" claim + true value claim = one adjudication dispute, or two?

A subcontractor resisting enforcement of an adjudication award claimed that the adjudicator had exceeded their jurisdiction. The adjudicator had decided a technical "smash & grab" claim for payment, ruling that it was invalid, and had then gone on to determine a true value payment. The subcontractor claimed, however, that there were two disputes and that the adjudicator had exceeded their jurisdiction in dealing with the true value claim. But was that correct?

In ruling that there was just one dispute, the court applied a broad interpretation to the concept of a "dispute", set alongside the robust common-sense approach in the textbook Coulson on Construction Adjudication, which framed this question:

"Taking into account the nature of the dispute and the manner in which it was presented to the Adjudicator, can it fairly be described as a single, disputed claim for a sum due or a referral of a number of disputes which, on analysis, are independent of one another?"

The court said the answer was clearly the former, for a number of reasons. The notice of adjudication clearly characterised the dispute as a failure to pay any sum due to the claimant by the final date for payment, whether as a notified sum or a substantive amount. To characterise these as separate disputes would be too legalistic an approach to the exclusion of a task readily performed by the adjudicator on the facts and in time. Two routes were advanced to the same goal of determining a sum owed.

In the court's experience, it was not unique for disputes on such issues to be combined within one adjudication referral, as alternative outcomes. Overall, the dispute could fairly be described as a single, disputed claim for a sum due.

Bellway Homes Ltd v Surgo Construction Ltd [2024] EWHC 10

2. Fraud: can an exclusion clause exclude or limit liability?

There is an old legal rule that "fraud unravels all". Once fraud is proved, "it vitiates judgments, contracts and all transactions whatsoever". But what about an exclusion clause? Could that exclude, or limit, liability for fraud? In Innovate Pharmaceuticals Ltd v University of Portsmouth Higher Education Corporation the court had to consider this question.

In doing so, the court set out these 'well established' principles:

• Exclusion clauses mean what they say;
• it is a matter of construction rather than law as to whether liability for deliberate acts will be excluded;
• limitation clauses are not regarded by the courts with the same hostility as exclusion and indemnity clauses;
• a contracting party cannot exclude liability for its own fraud in inducing a contract;
• as to whether a clause excludes liability for fraud in performance of a valid contract is a matter of construction of the commercial provisions and risk allocation;
• an exclusion or limitation clause is more...