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 (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.

Construction

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 2021

  • Since the 1990s, most construction contracts have had clauses containing mandatory dispute procedures. Standardised 28-day adjudications have become the industry norm for small tiffs. Only the largest and most complex cases usually reach the courts.
  • PFIs have made major construction projects more complicated in contractual terms, with many more parties involved.
  • Several major infrastructure projects are due to be started or completed in the next few years including Crossrail, High Speed 2, the Mersey Gateway, Hinkley Point C nuclear power station, and the Hornsea One and Two offshore wind farms.
  • ADR and arbitration will probably be a vital growth area for the UK after Brexit. London remains one of the world’s leading arbitral centres, as English law still governs many cross-jurisdictional contracts – agreements that span the Middle East, Africa and the rest of Europe.
  • In Spring 2021, the High Court rejected a claim by environmentalists to prevent tree-felling as part of the HS2 project. The campaigners cited the possible presence of rare bats as enough reason the preserve the trees. The HS2 developer claimed the project would face delays amounting to £90 million if they could not proceed.
  • According to an Arcadis report, the time taken to resolve construction disputes has decreased from a year to just under 10 months, meaning the UK still holds the record for the fastest dispute-resolving process.
  • Arcadis has also revealed that the value of construction disputes more than doubled between 2019 and 2020, as well as the value of these claims more than doubling in the same period. The building sector is the most contentious, with breach of contract by owners, contractors and subcontractors being the number one cause of disputes in 2020.
  • The Grenfell Tower disaster has led to a public inquiry into construction and reviews of buildings using similar materials. The Royal Borough of Kensington and Chelsea and its tenant management group are facing more than 1,000 multi-million-pound compensation claims by survivors and those left bereaved by the fire.  More than 100 firefighters and police officers are also suing the borough, citing emotional trauma and long-lasting physical injury.
  • A US judge ruled that American shareholders in the US-based Grenfell cladding company, Arconic, are permitted to continue with their case against the firm. Witnesses alleged that employees knew about the cladding’s flammability but continued to use it, with US investors suffering financial loss after the company’s cladding was blamed for exacerbating the fire.
  • The Government signed a £6 million deal in summer 2021 to securely store documents used in the inquiry.
  • 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.