Construction

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. 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.
  • The construction world is often perceived as a male-dominated environment, but while some clients might see a visit to a lap-dancing club as par for the business entertainment course, there are many successful construction lawyers, architects and engineers – male and female – who avoid such activities.
  • 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

  • Construction is the second most domestically focused major sector in the UK and therefore one of the industries least likely to be directly affected by Brexit. There will likely be uncertainty surrounding the relevance of EU regulations in the transitional period until the UK's eventual exit, but a number of EU regulations in this area are already incorporated into UK law or reflect other global obligations which the UK has embraced. After the UK's actual divorce from the EU these regulations are likely to continue to be enforced.
  • This is not to say that Brexit will not have implications for the sector. Construction activity is heavily dependent on continuing economic growth – during the 2008/09 recession there was a dramatic drop in construction output. So if Brexit causes a recession or a dip in growth the consequences for the sector could be significant. Not least because...
  • The UK construction industry’s performance is still falling short of its pre-recession peak, though growth has been positive over the past couple of years. It was one of the first sectors to start performing well after the recession, and has maintained output growth since 2013. Figures suggest that growth has slowed recently: in the run-up to the EU referendum Britain's builders had their worst few months in seven years due to cautious investors and a collapse of new orders.
  • Nevertheless, construction lawyers appear to be sustaining high levels of activity in both the transactional and contentious arenas. In the years ahead, the industry is expected to continue to grow as the need for new housing shows little sign of slowing. If the UK’s economy continues to grow (as is likely), there’s a good chance that non-residential building sectors will also experience a significant uptick in activity. New office, leisure, retail, transport, distribution and logistics facilities are all expected to be in demand, and London-based commercial developments continue to be a plentiful source of work for lawyers.
  • Government schemes like Help to Buy and Funding for Lending have ushered in greater demand for new houses. Though the number of new homes under construction has grown in recent years, there is still a massive demand for housing in the UK, particularly in London. Mortgage lenders have responded by clamping down on large mortgages for fears of a bubble growing in the London property market.
  • In an attempt to re-jig residential new-build productivity, the government announced a series of proposals in July 2015 sanctioning automatic planning permission to build on disused industrial sites and giving ministers greater powers to seize disused land in order to fast-track major housing projects.
  • The average value of a construction dispute in the UK fell to $25 million in 2015 down from $27 million the year before, though the average duration of a dispute rose to 10.7 months from ten months
  • Construction disputes in the UK most commonly arise from poorly drafted or unsubstantiated clauses, and failures to either properly administer or comply with contractual obligations.