Projects And Construction Law Update - April 9, 2015

Please see below Clyde & Co's latest projects and construction law update - a regular review aimed at providing up-to-date information for those in the construction and infrastructure industry.

We look at industry news as well as recent court decisions concerning:

partial stay of an adjudication enforcement public and product liability cover under an 'all risks' policy enforcement of an adjudicator's decision is stayed due to a real possibility of bias an ad hoc agreement to adjudicate leads to a finally binding decision liability of engineer when builder was negligent Industry news

New CDM Regulations are now in force

New health and safety legislation in the form of the CDM Regulations 2015 came into force on Monday 6 April 2015. To read more on these regulations, please click here.

Reforms introduce unlimited fines in Magistrates' courts

There have been revisions to the fines which may be imposed in the magistrate's court which will affect health and safety prosecutions. The Legal Aid, Sentencing and Punishment of Offenders Act 2012 (Commencement No.11) Order 2015 (SI 2015/504) brought section 85(1), (2) and (4) of the Legal Aid, Sentencing and Punishment of Offenders Act 2012 (LASPO) into force on 12 March 2015. Section 85 provides for fines in magistrates' courts currently capped at £5,000 or more (where legislation permits) to become unlimited, meaning that magistrates will be able to impose higher fines than previously. This could affect:

Health and safety prosecutions brought under the Health and Safety at Work Act 1974, which were capped at £20,000 Environmental offences that, depending on the type and nature of the offence, were capped between £5,000 and £50,000 The new sentencing power does not apply to fines for offences committed before 12 March 2015.

Government publishes final health and safety progress report

The government has announced that it has completed its review and reform of health and safety legislation in the UK. The review began with Lord Young of Graffham's report, "Common Sense, Common Safety", which was published in October 2010, and was followed by Professor Löfstedt's review of health and safety regulation, "Reclaiming health and safety for all: An independent review of health and safety legislation", which was published in November 2011, and included the "Red Tape Challenge".

The foreword to the final report, written by Lord Freud, Minister for Welfare Reform, states that the government has reinstated "common sense and trust in the health and safety system in Britain".

NAO briefing confirms PPP 'has a role'

In a paper issued in March entitled "The choice of finance for capital investment" the NAO looked at public and private finance in capital investment. It noted that the current value of PFI contracts stands at £58 billion.

It reports that:

Private finance can represent value for money if the additional cost of finance is offset by benefits of risk transfer to the private sector For most departments, servicing private finance deals is not a major budgetary commitment, but for a small number of organisations it is significant e.g. the Highways Agency - 50% Private finance provides budgetary and cash flow flexibility, but the short-term cash flow benefit has to be assessed against the long term commitment to repay capital and interest Acknowledging that the government has introduced measures to support the private funding of public assets it advises that the implications for national accounts and departmental financial statements merit detailed review.

Government's Operational PPP Efficiency Programme

The government has announced that its programme focused on re-assessing the contracts for operational Public Private Partnership (PPPs) projects has surpassed its target, having secured £2.1 billion in savings - and is now seeking £2 billion extra in savings. The programme was established in early 2012 with the aim...