In a nutshell
Construction law can broadly be divided into non-contentious and contentious practice. The first involves lawyers helping clients at the procurement stage, pulling together all the contractual relationships prior to building work; the second sees them resolving disputes when things go wrong. In the past the relatively high monetary stakes involved and the industry trend for recovering building costs through the courts made construction a litigation-happy practice. However, since the 1990s most new contracts have contained mandatory procedures to be adopted in case of dispute. Adjudication of disputes has become the industry norm and these tend to follow a swift 28-day timetable (although parties can agree to extend this period.) Others are resolved through mediation or arbitration; however, some disputes are so complex that the parties do still choose to slug it out in court.
What lawyers do
Procurement
- Negotiate and draft contracts for programmes of building works. Any such programme involves a multitude of parties including landowners, main contractors, subcontractors, engineers and architects.
- Work in conjunction with property lawyers if the client has invested in land as well as undertaking a building project. Together, the lawyers seek and obtain all the necessary planning consents as well as local authority certifications.
- Where the developer does not own the land, liaise with the landowner’s solicitors over matters such as stage payments, architects’ certificates and other measures of performance.
- Make site visits during development.
Construction disputes
- Assess the client’s position and gather all related paperwork and evidence.
- Extract the important detail from huge volumes of technical documentation.
- Follow the resolution methods set out in the contracts between the parties.
- Where a settlement is impossible, issue, prepare for and attend proceedings with the client, usually instructing a barrister to do the advocacy.
Realities of the job
- Drafting requires attention to detail and careful thought.
- It’s essential to keep up to date with industry standards and know contract law and tort inside out.
- People skills are fundamental. Contractors and subcontractors are generally earthy and direct; structural engineers live in a world of complicated technical reports; corporate types and in-house lawyers require smoother handling. You’ll deal with them all.
- Most lawyers prefer either contentious or non-contentious work, and some firms like their construction lawyers to handle both, so pick your firm carefully.
- A background in construction or engineering is a major bonus because you’ll already have industry contacts and will be able to combine legal know-how with practical advice.
Current issues
October 2023
- The financial markets experienced some uncertainty due to the Russian invasion of Ukraine and the governmental shifts in the UK. Although these events had broader impacts on society, they have intensified the economic challenges that the construction sector is expected to confront throughout 2023.
- In construction projects, there will be a heightened emphasis on incorporating climate change resilience into designs, selecting materials that are environmentally sustainable and utilizing modern construction methods that minimize carbon emissions. Several standard form contracts, including NEC4, have already begun incorporating clauses to encourage carbon reduction initiatives in upcoming construction projects
- Infrastructure Intelligence has issued a warning that the conclusion of several Private Finance Initiatives (PFIs) and Public Private Partnerships (PPPs) could potentially have the most significant impact on health and education services. Concerns arise from the possibility that the public sector might not be adequately prepared to take ownership of the buildings involved.
- Currently, the built environment is responsible for 30% of total greenhouse gas emissions and 40% of energy consumption, with construction utilizing 32% of the world's natural resources. The Environment Act, which received royal assent in November 2021, has prompted the sector to take concrete actions to enhance air quality, decrease pollution and waste, promote biodiversity, and improve resource efficiency. Additionally, the implementation of the Future Homes Standard will necessitate new homes to produce carbon emissions that are 75%-80% lower than those constructed according to current standards.
- The construction sector remains at the cutting edge of innovation, thanks to the growing adoption of technology and modern construction methods. Notable examples of this progress are the successful completion of Battersea Power Station in 2022 and the tunnelling efforts for London's Thames Tideway Tunnel.
- The Nationally Significant Infrastructure Project (NSIP) action plan includes a series of measures aimed at simplifying the planning process for large-scale infrastructure projects. These measures are designed to accelerate construction, support economic growth and enhance connectivity throughout the country. In addition, it should strengthen future energy security, and facilitating the achievement of Net Zero targets.
- The UK government has granted approval for the construction of one of the country's largest offshore windfarm projects, located off the coast of Yorkshire. This significant project, known as the fourth phase of the Hornsea windfarm development, was subjected to a five-month delay but has now received the green light. Once completed, the windfarm will comprise 180 enormous turbines, with the capacity to generate a substantial amount of renewable energy. It is estimated that the electricity generated from this project will be equivalent to powering approximately 1 million homes with green electricity.
- According to Arcadis, 2023 has seen a decrease in inflationary pressures impacting the construction industry. Material price inflation, which had previously peaked at 30% in June 2022, is now declining, suggesting a return to more typical trading conditions. However, external factors such as the reopening of the Chinese real estate market could introduce additional complexities.
- The Grenfell Tower inquiry is drawing to a close, with the report set to be released in 2023. Given the sheer volume of pages in the report, any criminal prosecutions are unlikely to occur until 2024.The inquiry involved 300,000 documents, 1,500 witness statements and 308 days of evidence.
- Besides the Building Safety Fund, the government has recently revealed its plan to allocate £8 million to local authorities for the establishment of dedicated enforcement teams. These teams will ensure that building owners carry out essential safety works, with the authority to take legal action if required. Although this is a positive step, it raises questions about the government's delay in providing this funding and whether the initial amount is sufficient. Furthermore, there is a concern about why the government is relying on third parties to conduct the checks.
- More than 100 firefighters and police officers are also suing Kensington and Chelsea borough for at least £1 million, citing emotional trauma and long-lasting physical injury. As things currently stand, more than 1,100 people have launched damages claims following the tragedy, represented by 22 different firms. An additional 16 firms are representing the defendants.
- The government has pledged £12 billion as part of its ‘ten point plan for a green industrial revolution,’ which includes greener buildings and transport and advanced nuclear power.
Some tips
- Prior knowledge or experience of the construction industry is relatively rare for those entering the profession. Commercial experience and interests are more common. A passion for contracts and torts is a must.
- It's easy to tell which are the leading construction sets. The London market is dominated by a duumvirate of specialist sets: Atkin and Keating.