The Risk of Volatile Prices on a Building Project

/ Contractual Issues, Fluctuations, JCT Network

Blog author: Peter Hibberd In September 2021, the Bank of England stated that inflation may reach 4% by the end of that year. The talk, by some, that this was alarmist and that we should not overreact to rising prices is now seen to be way off beam. General inflation has increased significantly since then and in September 2022 it had risen to circa 10% according to ONS. How wrong can one be! The construction materials indices are even more variable and reflect price increases…

Managing Construction Price Inflation

/ Contractual Issues, Fluctuations

Blog Authors: Sarah Elliott and Suzanne Reeves  – Wedlake Bell The construction industry has had to mitigate the effects of Brexit and COVID-19 and is now beset with additional inflationary pressures in the wake of the war in Ukraine. Unfortunately, inflation is unlikely to be brought under control in the short term and will be with the industry for some time to come. This means that businesses across the supply chain need to find ways to manage the risks of cost escalation over the life…

UK Construction & Engineering Projects – What Can I Do To Avoid Disputes?

/ Contractual Issues, JCT Young Professionals Group

Blog Author: Tom Hawkins – Director, FTI Consulting   Tom Hawkins is a Chartered Construction Manager and Quantity Surveyor who has over 14 years’ experience in the construction and engineering industry. He initially obtained his experience working for a national UK main contractor prior to moving into consultancy roles where he currently provides Quantum Expert Witness & Dispute Resolution services worldwide for FTI Consulting. He has experience regularly providing commercial management strategies & advice which includes services as part of dispute avoidance and resolution proceedings….

Three Options for Managing Inflation Risk Using JCT Construction Contracts

/ Contractual Issues, JCT 2016 Edition

Blog Author: Nigel Blundell and Hamza Sekkar –  Pinsent Masons The current volatile and unpredictable market conditions pose a risk to the success of major projects. However, there are ways that contractors and clients can manage risks associated with inflation in their contracts. We look at three options available under the JCT suite of standard form contracts that contractors and clients alike should consider at a project’s outset. Current practices Deleting the fluctuation provisions in standard form contracts had been an accepted practice for many years….

Rolling Out PBAs in JCT Contracts

/ Contractual Issues, JCT Product Updates

Blog Author: John Riches – Vice-Chair, JCT Drafting Sub-Committee   Project bank account provisions are now available for all JCT contract suites – improving cash flow through the industry… Lord Denning said in Modern Engineering (Bristol) Ltd vs Gilbert Ash (Northern) Ltd 1973 that “cash flow is the lifeblood” of the construction industry – a sentiment that is particularly apposite where parties feel they are not being paid enough or on time. There have been a plethora of reports on the ills of the industry featuring…

Smart Contracts – What Are They and How Do They Fit in With Traditional Contracts?

/ Contractual Issues, Digital

Blog Authors: Charles Maurice, Partner and Daniel Fournier, Paralegal – Stevens & Bolton LLP   Smart contracts – fruit of the nascent distributed ledger technology – are an emergent disruptor to the legal landscape, but what are they and how do they fit in with traditional contracts? You might be forgiven for thinking that contract law in the UK is neither modern nor smart: after all at times we still rely on legal principles handed down in judgments from the Victorian era and earlier. However,…

Accelerating Modern Methods of Construction

/ Contractual Issues, General

Graham Robinson and Nigel Blundell explore the challenges and opportunities around the procurement, contracting and on-site delivery of infrastructure projects using Modern Methods of Construction. The UK government is committed to using its position as the single largest construction client to support adoption of a more productive, efficient and sustainable business model within the UK construction sector which is a key aim in reaching the government’s goal of Net Zero by 2050. The government announced its commitment to Modern Methods of Construction (MMC) in the…

Increasing Costs and Fluctuations Provisions

/ Contractual Issues, JCT 2016 Edition

Blog Author: Peter Hibberd Recently, the Bank of England governor claimed that his ex-chief economist’s view that inflation may reach 4% was alarmist and that we should not overreact to rising prices. Overreacting is one thing but making sensible provision is another. Fluctuations in labour and material prices in relation to construction projects can, and do, quickly erode a contractor’s margin. Over recent years, price inflation has been benign, which has led to those entering building contracts giving less consideration to its impact and to…

Debating Digital

/ Contractual Issues, Digital, JCT Povey Lecture

Blog Author: Richard Saxon CBE – Past Chair, JCT Debates are as much a form of entertainment as a way of reaching decisions. But they can still reveal true opinion usefully if the protagonists are so minded. At my school, we were allocated the ‘for’ and ‘against’ roles randomly, to sharpen our wits. As debates progress, positions can become more nuanced. An example of this was the online debate held by Infrastructure Intelligence magazine on the proposition: “That digital transformation is dependent on new forms…

Preparing for public procurement post-Brexit

/ Contractual Issues, Latest News, Public Sector

Blog Authors: Graeme Young, Partner and Shona Murphy, Associate – CMS UK The UK left the European Union on 31 January 2020. Under the terms of the EU-UK Withdrawal Agreement, the current EU public procurement rules have continued in force in the UK during an 11 month transition period. That transition period expires on 31 December 2020. While the UK may still be able to agree a limited form of Free Trade Agreement (FTA) with the EU by the end of this year, it seems…