Hitting the high spots: 2023 in construction law

The year began with the Supreme Court’s majority decision that the Tate Modern’s 10th-floor viewing gallery was an actionable nuisance (Fearn vs Tate). Visitors to the Tate could see into neighbouring flats whose walls are mainly made of glass. Barriers now block access to the platform’s south side..

Another Supreme Court judgment in 2023 addressed the situation where a defendant deliberately conceals a fact relevant to a claim (Canada Square vs Potter). In such cases, the limitation period for suing is deferred until the claimant discovers, or could with reasonable diligence have discovered, the concealed fact. Many of the authorities in this area are latent defects cases. The court cast aside subtleties added by previous judgments, reverting to the plain words of the Limitation Act 1980.

The Technology and Construction Court celebrated its 150th birthday with a former TCC judge, Dame Sue Carr, appointed as the first ever woman to head our judiciary

That legislation was also considered in LJR vs Cooper, where the Technology and Construction Court (which celebrated its 150th birthday with a former TCC judge, Dame Sue Carr, appointed as the first ever woman to head our judiciary) confirmed that the act applies to adjudication proceedings. As the adjudicator’s decision contradicted the act, the court declined to enforce it.

The TCC also declined to enforce an adjudicator’s decision in AZ vs BY. The reason was that the successful party had sent the adjudicator material which was covered by without-prejudice privilege. A fair-minded and informed observer would have concluded there was a real possibility that, as a result, the adjudicator was biased.

Serial adjudications were given helpful guidance in Sudlows vs Global Switch. The Court of Appeal highlighted the need to analyse what was decided in an earlier adjudication to determine if the same or substantially the same dispute had been referred in the later adjudication. It stated: “The court should only intervene when something has gone clearly wrong in a later adjudicator’s decision.”

Repeat referrals of the same dispute were also an issue in Kajima vs Children’s Ark, but in the context of an agreed dispute escalation procedure. The Court of Appeal held that the procedure, which simply copied the procedure in a higher-up contract, was unenforceable due to a lack of clarity. It added that if the procedure had in fact been enforceable then it would only have stayed the action rather than striking it out, but that a stay was not the default option.

Dispute escalation procedures often require parties to try processes like mediation before suing. However, as the Court of Appeal held in November, even without having agreed such a procedure the courts may order parties to engage in non-court-based processes if it does not impair the claimant’s right to proceed to a trial and is proportionate (Churchill vs Merthyr Tydfil). This is a substantial modification to the previous position, whereby the courts feared such an order might breach the right to a fair trial.

The substantial modification of public contracts was addressed in James Waste Management vs Essex. The TCC gave highbrow guidance to contracting authorities on when such a modification arises such that a new procurement process may be required. 

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This guidance will be superseded next year by the Procurement Act 2023. The government’s high-sounding claim was that the new act ushers in “one of the largest shake-ups to procurement rules in this country’s history”. The changes are not quite as transformative as billed, but they are important. There will be a hiatus until the new regime comes into force in October 2024.

Delay of the concurrent type was considered again by the TCC within the last 12 months. In Energy vs MW, the court made the familiar point that a contractor “would be entitled to a full extension of time without apportionment in the event that there were two concurrent causes of delay only one of which gave rise to a claim for an extension”.

Concurrency of another type was the subject of Sheffield vs Hadfield. The TCC held that a contractor may, concurrently with its contractual duties, owe its employer a duty of care in tort not to cause economic loss by defects. This often matters when the limitation period for suing for claims in tort is longer than that for claims for breach of contract.

A duty of care in tort was what the engineer was found to owe its client over its allegedly defective design of two tower blocks in URS vs BDW. The Court of Appeal held that the claim was not precluded, because the client sold the buildings before the defects were discovered and it incurred remedial costs. The court also made decisions which are important to claims against contractors, designers and others that worked on dwellings found unfit for habitation.

While the retrospective 30-year limitation period introduced last year is not limited to defective cladding claims, there is a surge in such claims. This and the regime brought in this year for developers for the remediation of high-rise residences are just two recent changes that will merit further study in the future. With the Grenfell Tower Inquiry final report expected next year, high-rises are set to remain under the spotlight for the foreseeable future.

Rupert Choat is a barrister, arbitrator and mediator at Atkin Chambers