Clifford Chance
Insights and opinions from our International Construction Group on issues and developments affecting the construction industry.
We cover the trends impacting on individual and all industry sectors here, including infrastructure (transport, water and utility networks, pipelines, interconnectors and social) industrial (power generation, refineries, process and manufacturing) and development (commercial and residential).
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Why your construction contract default termination remedies are (often) wrong
We have been thinking this for a while - too many construction contracts contain an inherently perverse position in relation to Contractor-default terminations.
David Metzger Special counsel (Consultant to Clifford Chance) 21 March 2024
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JCT D&B 2024 – a brave new world? The new JCT D&B 2024 has been published. The first JCT I ever had to advise on was the JCT 1998 “With Contractor’s Design“ (a pre-cursor to the design and build contract for the benefit of youngers readers) so I have seen a few iterations… This is always an exciting moment for a construction lawyer as we race to work out what has changed and update our templates. For the industry, the layout and terminology used in the JCT is so familiar, rather like a comfortable pair of shoes or a trusted friend, that any changes tend to be treated with an element of trepidation and uptake of the new forms can be slow. 23 April 2024 Read more
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Renewable energy projects and construction disputes: how to prevent and mitigate the new risks?
Construction disputes involving offshore renewable energy projects share some features of conventional construction disputes. Yet these projects entail a new and/or distinctive set of risks that require tailored approaches to dispute resolution.
Alexis Foucard Counsel 27 August 2024
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Without haste – the decade-long attempt to claw back bond monies for creditors: Hastie Group Limited (in liq) v Multiplex Constructions Pty Ltd (Formerly Brookfield Multiplex Constructions Pty Ltd) (No 3) [2022] FCA 1280
The construction industry in Australia is in a state of extreme turbulence. Supply chain disruption and spiralling costs on lump sum contracts are destroying contractors' bottom lines, increasingly making it impossible for contractors to break even, let alone achieve their planned profit margins, meaning the risk of insolvency is no longer an outlying risk, but is now an increasing reality. From an owner's perspective, tendering a project on a lump-sum basis is not risk-free. If the contractor is liquidated, this will significantly increase the costs of completing the project if another contractor is required to complete the works. Calling the original contractor's performance bonds simply might not be enough to recover the owner's losses.
That said, the judgment in Hastie confirms that performance bonds are not property of the procuring contractor, or their administrators pursuant to Chapter 5 of the Corporations Act 2001 (Cth). Further, the advent of the contractor's insolvency does not affect the status quo of on-demand performance bonds – namely that they are enforceable by the beneficiary against the issuing bank, meaning funds cannot simply be clawed back by the administrators to pay creditors.
Jamie Calvy Senior Associate 17 January 2023
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Challenges of advancing COVID-19 supply chain delay and disruption claims under contractual force majeure provisions
Many construction projects operating under lump-sum contracts are experiencing severe cost escalations due to COVID-19 delays. With limited alternatives, contractors may seek to recover those costs under force majeure provisions.
Jamie Calvy Senior Associate 3 March 2023
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Offshore Decommissioning - Australian Government publishes issues paper
The Australian Government is developing a roadmap to establish an Australian offshore decommissioning industry. It has recently released an issues paper and is seeking submissions on development of that industry.
Hague Skinner Senior Associate 21 September 2023
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Decommissioning disputes: how to mitigate risks as we transition to renewable energy
Decommissioning of ageing fossil fuel assets is on the rise globally. It is an important part of energy transition, but is often a complex, costly, and risky business, especially in the offshore sector, with a high potential for disputes. This blog examines some of the risks associated with decommissioning and provides guidance on mitigating those risks.
Pat Saraceni Director, Litigation and Dispute Resolution 24 November 2023
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2022 FAQs – (Good) Faith No More?
The most common enquiry I have received from owner/developer clients in the last six months has been along the lines of ''Our Contractor is insisting on additional payments to reflect increased prices in its supply chain. We are clear that there is no contractual entitlement for those payments, but if we don’t pay, it is threatening to stop work or walk away from our project. Even though we could then terminate, we would rather avoid that scenario - is there any way to make the additional payments under protest but reserve our rights to claim them back later?".
David Metzger Special counsel (Consultant to Clifford Chance) 2 February 2022
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It's a knock-for-knock out
A very quick review of so-called knock-for-knock indemnities and why and where they are applied.
David Metzger Special counsel (Consultant to Clifford Chance) 8 February 2022
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Float, Float On
The recent Scotwind auction can be seen as a huge vote of confidence in floating offshore wind, awarding projects at 100x the current installed floating capacity, to say nothing of upcoming projects and licensing rounds elsewhere.
David Metzger Special counsel (Consultant to Clifford Chance) 16 February 2022
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Changes to the security of payment and adjudication law in Western Australia
In the first of our Construction law conversation series, Sean Marriott (Counsel in the Clifford Chance Perth office) talks to Spencer Flay (Partner in the Clifford Chance Perth office) about the impending changes to the security of payment and adjudication law in Western Australia.
Spencer Flay Partner 29 July 2022
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The new Security of Payment Act in Western Australia - Impacts for the offshore sector
Director Pat Saraceni along with Counsel Kristian Maley discuss recent legislative changes in Western Australia, and how they impact on construction work in the offshore sector. Pat and Kristian also share some suggestions about what steps the offshore sector can take to be ready for the State's new Security of Payment Act.
Pat Saraceni Director, Litigation and Dispute Resolution 22 November 2022
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Industrialised construction – contracting challenges in this brave new world
As different construction sectors take up industrialised construction processes, new commercial and contractual issues are falling under the spotlight. In this first of a series of blog articles looking at the interests of developers, contractors, lenders and other stakeholders in an industrialised/modular context, we consider the point of payment, transfer of title and security.
Emma Clarke Senior Associate 1 March 2021
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Coronavirus and force majeure - checklist
We have started seeing a steady flow of force majeure claims across our network, following the outbreak of the novel coronavirus first reported in Wuhan, China in December 2019 and the consequential surveillance and controls introduced by the Chinese and other governments.
David Metzger Special counsel (Consultant to Clifford Chance) 23 January 2020
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Do the right thing? construction and moral hazards
In which the Clifford Chance Construction blog ponders why the industry struggles with ethics and trust issues and wonders if 2020 could yet be Construction's summer of love.
David Metzger Special counsel (Consultant to Clifford Chance) 26 May 2020
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Borrower/vendor due diligence – when it is not due (or diligent)
We have set out 5 guidelines for when developers/borrowers/vendors produce due diligence reports on their own project contracts alongside a critical glance at this growing trend.
David Metzger Special counsel (Consultant to Clifford Chance) 11 June 2020
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Close but no Ciga-r?
The recently enacted Corporate Insolvency and Governance Act 2020 ("CIGA") introduces sweeping changes to UK insolvency law. Some of these changes have significant implications for common construction project procedures – in particular around the enforceability of key remedies in multiparty contracts, including step-in rights. In this blog, I look at three of them.
Edward Bretherton Partner 15 July 2020
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Termination - what's the Triple Point of delay liquidated damages?
In this Clifford Chance Construction Group blog, London partner Ed Bretherton assesses the manner in which delay liability might be allocated in a termination scenario.
Edward Bretherton Partner 1 September 2020
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A surety solution for on-demand bond shortages?
The Clifford Chance Construction blog takes a look at potential solutions to the anticipated shortage of bank bonding facilities for construction and infrastructure projects.
David Metzger Special counsel (Consultant to Clifford Chance) 9 September 2020
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Caps and Carve-Outs – you can't have one, you can't have none, you can't have one without the other
The common law is well-known for its difficult relationship with liquidated damages ('LDs'), with its complicated set of rules which may be beloved by construction lawyers, but considered arcane by any other standards. In spite of this, parties to construction contracts have a deep and understandable attachment to LDs.
Edward Bretherton Partner 26 September 2019
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3 recent developments on delay liquidated damages (and one ongoing principle that you ignore at your peril)
The common law is well-known for its difficult relationship with liquidated damages ('LDs'), with its complicated set of rules which may be beloved by construction lawyers, but considered arcane by any other standards. In spite of this, parties to construction contracts have a deep and understandable attachment to LDs.
David Metzger Special counsel (Consultant to Clifford Chance) 30 April 2018
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FIDIC Silver Book 2017 – 5 implications for project finance
At the end of 2017, FIDIC released its long-awaited update to the 1999 first edition of the Silver Book.
Edward Bretherton Partner 7 May 2018
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4 technology 'hotspots' in modern Construction Contracts
Despite a longstanding preference for the 'tried and trusted', increasingly construction projects are featuring deployment of new models of equipment and technological innovation. Here are just four of the ways in which they are impacting on Construction and OM contracts.
David Metzger Special counsel (Consultant to Clifford Chance) 4 June 2018
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Credit crunch - is it time for Payment Charters with teeth?
We have been spending considerable time this year dealing with the fall-out from Carillion's liquidation - as well as meeting with board members of our clients and cross-industry contacts to discuss the issues it has exposed and potential ways forward.
David Metzger Special counsel (Consultant to Clifford Chance) 12 September 2018
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Industrialised construction – setting new standards
Industrialised construction is back in vogue having overcome the design and defect horrors of the pre-fab label and with the concept now covering not only fully modular building components but also offsite manufacture of package component sets which can be relatively quickly assembled or installed on site.
David Metzger Special counsel (Consultant to Clifford Chance) 28 November 2018
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Contractor Consortia - sharing risk the right way
Construction contracts are typically drafted with the assumption that only two parties are involved – the Employer and the Contractor. However, it is not uncommon for the Contractor itself to be made up of a number of separate parties.
Irina Steinberg Senior Associate 19 December 2018
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