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.

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

  • Heavy snow early in 2018 posed all sorts of problems for the construction industry, but by June business had picked back up. A survey by the IHS Markit and Chartered Institute of Procurement and Supply noted an upturn in sector service output in that month, but suggested that construction job creation remained slow.
  • Construction work in the UK is highly dependent on EU migrant workers, and it's concerning to note in the lead up to Brexit that around two-thirds of UK construction materials are imported from the EU. Terms must be drawn up as part of the withdrawal process either maintaining the status quo or putting an equivalent in place - otherwise, construction output could be seriously diminished.
  • Facilities management and construction giant Carillion went into liquidation in January 2018 with liabilities of almost £7 billion, making it the the 'largest ever trading liquidation in the UK'. The collapse was blamed on directors covering up dire company finances, and the government came under fire for allowing companies such as Carillion to put profit before public service.
  • Bad news to some, obviously, but financial instability feeds disputes. Many parties have been forced into litigation or alternative dispute resolution (ADR) after projects have either fallen through, been suspended or downsized. This has seen a particular hike in the use of arbitration, as parties are more in need of quick settlements rather than waiting out a lengthy court process, though party-to-party negotiation remained the most common form of alternative resolution method in 2017 according to consultancy company Arcadis.
  • Arcadis research suggests that UK construction disputes are costlier on average than in the US and Europe, with a total £26 million value in 2016/17 compared to £22 million for the whole rest of Europe.
  • The UK construction industry as a whole enjoyed five years of consecutive growth from 2013. In spite of Brexit uncertainty, a forecast by the CPA (Construction Products Association) predicted a small dip in the growth rate in 2018 but another increase thereafter, driven in part by large infrastructure projects including HS2 and nuclear power station Hinkley Point C.
  • Newly-appointed home secretary Sajid Javid launched a new national housing agency, Homes England, at the start of 2018. The new body aims to deliver an average of 300,000 homes per annum by the mid 2020s, primarily on brownfield sites.
  • ADR and arbitration will likely be a vital growth area for the UK after Brexit. London remains one of the world’s leading arbitral centers, as English law still governs many cross-jurisdictional contracts – agreements that span the Middle East, Africa and the rest of Europe.
  • 'Smart buildings' are a hot new trend: 'smart' in that they come complete with various nifty features including automated heating, remote monitoring and wireless internet. This could create security issues, as data collected by the building could be stolen or the connected appliances hacked. If smart building technology proves popular, construction lawyers may find themselves having to take such issues into account when they advise clients or even handle disputes originating from them.