Projects And Construction Law Update - September 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:

a valid termination of the contractor's engagement under the FIDIC Yellow Book a judge's refusal to enforce an adjudicator's decision where the employer had failed to serve the requisite payment notices but where the contractor's application for payment was found to be invalid the concept of good faith when awarding service points under a PFI contract the relationship between CAR insurance and contractual liability a successful challenge to a local authority procurement termination under the FIDIC Red Book consideration of employer's entitlement to deduct LDs under JCT SB/XQ Industry news

CDM 2015: ACE Agreements 2009 amendments published

The Association for Consultancy and Engineering (ACE) has published an amendment sheet for its suite of professional appointments for engineers, the ACE Agreements, 2009 edition (ACE Agreements 2009) to incorporate CDM 2015. The amendment sheet is freely available to download as a PDF here.

SCL Delay and Disruption Protocol amendments published

The Society of Construction Law (SCL) has published amendments to its Delay and Disruption Protocol, following a consultation that concluded in April 2015. The amendments are contained in Rider 1. The preamble to Rider 1 explains that:

Changes to the Protocol were necessary because of developments in technology, construction law and industry practice since the Protocol was first published in 2002. Also, the Protocol is increasingly used overseas Eight issues were considered as part of the consultation, including record keeping, global claims and concurrent delay A second edition of the Protocol will be published in due course. In the meantime, Rider 1 provides guidance on "common issues that arise out of construction contracts" and provides a means by which parties can resolve those issues and avoid unnecessary disputes. If they cannot, the Protocol's "practical and principled guidance" can be used to help limit the costs of those disputes Government withdraws Green Deal funding

On 23 July 2015, the Department of Energy and Climate Change (DECC) announced that it would no longer be providing finance to the Green Deal Finance Company (GDFC). The government is stopping the funding because:

There has been a low take up of Green Deal loans. Figures published on 23 July 2015 indicate only 10,000 properties with completed loans DECC has concerns about the industry standards applied in the Green Deal field DECC no longer believes that investment in the scheme offers good value for taxpayers' money Government is considering application of reduced VAT rate for energy-saving materials

HMRC has published Revenue & Customs Brief 13/2015 on the reduced rate of VAT for supplies concerning energy-saving materials. It follows the ECJ's decision on 4 June 2015 that the UK's application of the reduced rate breaches EU law.

The Brief states that the government is currently considering the implications of the ECJ's decision and that no legislative changes will be made before the Finance Act 2016. It confirms that suppliers should continue to apply the reduced rate and that any changes will not have retrospective effect.

Case law update

Obrascon Huarte Lain SA v HM Attorney General for Gibraltar [2015] EWCA Civ 712

In this case, the Court of Appeal unanimously dismissed an appeal against Akenhead J's decision that the employer (AGG) was entitled to terminate the contractor's (OHL) engagement under a contract based on the FIDIC yellow book. The appeal was based on three grounds:

that the court had wrongly rejected OHL's claim for relief arising from unforeseeable physical conditions under clause 4.12 the...

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