O’Brien Contractors awarded prize at International Green Apple Environment Awards

Civil engineering and groundworks specialist, O’Brien Contractors have been awarded the silver prize at the International Green Apple Environments Awards.

O’Brien received the award after providing their earthworks remediation solution for Nestle’s £200M coffee manufacturing facility, as part of the £11M groundworks and civil engineering package.

The judges were looking for projects that considered the impact on the environment, with sustainability in mind.

O’Brien found a strategy to rescue a site containing 40,000cu m of spoil not suitable for re-use after 2012 being the wettest year on record, causing the Nestle site to become saturated.

They developed and implemented a remediation strategy that cut costs by £800,000, reduced lorry movements by huge amounts, saving 15 tonnes of CO2, retained all spoil on-site and reduced imported stone by 70%.

Peter O’Brien, Managing Director, said: “Across all the projects we operate on, we pride ourselves on delivering a solution that considers the environment. To further endorse this commitment, we will continue to significantly invest in our earthworks service to ensure we provide clients with the most efficient earthworks solutions and also help them reduce waste and costs. Any recognition in the form of an award is very much well received.”

The project team worked 90,000 man hours, with no accidents, creating a safer stable site for ongoing construction work.

The judges praised O’Brien Contractors for their involvement in getting the Nestle Project back on track with a unique plan that utilised remediation instead of excavation, also offering a large reduction in vehicle movements, saving CO2 emissions.

 

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International arbitration in the construction industry: why is it important now?

 

Michael Turrini, Partner (Construction) at White & Case

Legal issues are commonplace in this industry: construction does not always go to plan and costs can quickly escalate. Reflecting this, the global consulting engineer Arcadis recently published research to show that the value of the average construction dispute rose by almost 60% last year, with failure to properly administer the contract and misunderstandings over contractual obligations amongst the top five causes cited.

When it becomes apparent that such issues cannot be resolved between the parties involved, formal dispute resolution proceedings often beckon. Recent years have seen a huge increase in the use of international arbitration instead. Why is this the case?

Construction disputes sit at the apex of complex, highly technical and constantly evolving disciplines; construction and engineering and the law. Only a few jurisdictions have specialised construction courts (the Technology and Construction Court in England is a notable exception). Consequently, parties that choose to resolve their disputes through the courts risk having their case being heard by a judge who may have limited experience in dealing with construction contracts, construction industry terms and the technical aspects of a construction project. In international arbitration, where parties have the option of selecting arbitrators with specialist technical knowledge and industry expertise, selecting an arbitrator that has significant experience with construction disputes gives rise to a greater likelihood of achieving a decision that takes account of all relevant issues.

A sea change is evident from primarily court-based litigation to utilising arbitration as the preferred method of dispute resolution. The 2015 International Arbitration Survey, conducted by Queen Mary University of London (QMUL) in partnership with White & Case, illustrates that international arbitration is, conclusively, the preferred form of dispute resolution for cross-border disputes. In particular, the research found that 90% of the respondents favoured international arbitration over other forms of dispute resolution, a 17% increase from QMUL’s first international arbitration survey in 2006.

Factors behind this shift include the greater enforceability of arbitral awards, the flexibility of the arbitral process and the ability to avoid specific legal systems. As the research shows, however, the most attractive feature for parties in the construction industry is the ability to have disputes resolved by individuals with construction industry expertise.

International arbitration also provides parties with the option of choosing the jurisdiction in which disputes will be resolved. The location of an arbitration can be anywhere in the world, irrespective of whether it has any connection to the parties or the project. A neutral venue can be chosen, thereby avoiding any perceived ‘home advantage’.

London and Paris have long been the most traditionally preferred venues. However, the study showed that Hong Kong and Singapore have gained significant momentum, arguably reflecting the growing importance of Asia for inbound and outbound investment in large infrastructure and construction projects. Such projects, being sizeable, expensive and complicated, invariably result in disputes. As such, more Asian parties are becoming involved in large construction disputes and arbitral forums in the region have invested considerable effort to attract these sorts of disputes.

The 2015 International Arbitration Survey demonstrates that although London and Paris continue to be the two most used locations and preferred seats, Singapore is now considered the most improved seat over the past five years followed closely by Hong Kong.

The cost of large scale construction projects is now rising into the billions and at the same time so does the value of the disputes that arise out of them. The decision as to how to resolve them is therefore of critical importance. The latest International Arbitration Survey shows that international arbitration has now become the norm.

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Reducing risk by securing vacant property

As the construction industry continues to flourish post-recession, demand for construction site security looks set to rise. Matthew Grimley of the British Security Industry Association – the trade body representing the UK’s private security industry – discusses the importance of securing buildings throughout the first and second fix stages.

Construction sites by their very nature are vulnerable to security breaches which can lead to the loss of valuable equipment and materials, damage to existing work and costly delays. Furthermore, security breaches can also expose personnel working on-site to increased safety risks which could lead to injury.

The rising value of metals such as copper has led to an epidemic of thefts in recent years as thieves seize the opportunity to steal copper fittings, fixtures and wiring to turn a quick profit. Therefore, construction sites become particularly vulnerable between the first and second fixes if they are left unsecured. In addition, there is an increased risk to safety if electrical wiring is tampered with for their copper content.

Another increasing risk – especially in the capital where housing stock remains low – is that of squatters moving in. Squatters, who can cause lengthy delays to the building process also often cause large amounts of damage and vandalism to the building. In addition, owners and managers of vacant property have a ‘duty of care’ to anyone entering the building, whether authorised to do so or not. The law remains fairly open to interpretation when it comes to squatting, in that squatting in a residential building is illegal, but isn’t in itself a crime to squat in non-residential buildings or land. It’s usually a crime not to leave property when instructed to do so by the owner, the police, the council or by a repossession order, however the process of removing squatters can become time consuming and a legal nightmare.

This is where the services of a vacant property protection company should be considered to ensure that projects are completed on time and within budget.

Traditionally, as the name suggests, vacant property protection companies protect buildings which are at a heightened risk of criminal attack due to a change in its occupancy. The security solutions that vacant property protection companies can provide lend themselves perfectly to the protection of construction sites that are nearing completion.

There are a number of solutions available to protect vacant property including physical security measures such as steel security screens, doors and fencing; employing security guards to patrol the property whilst it is vacant; and electronic security measures such as intruder alarm systems and CCTV. Taking a holistic approach to security by utilising a combination of security measures will provide the most effective protection for vacant property.

Indeed, thanks to technological advancement, the use of technology in the vacant property protection market has developed significantly. The advances in wireless communications and alternative sources of power have allowed the implementation of monitored intruder alarms, video verification and CCTV in most environments. Many security companies operating in the vacant property protection sector now offer rapidly-deployable visually verified alarm systems. As soon as movement is detected, the alarm is triggered and the system automatically records footage which can be immediately monitored by trained operators in an Alarm Receiving Centre. Usually, operators will have agreed protocols with the site manager as to how alarm activations are dealt with such as alerting the police or contacting a designated key holder. The reliability of these systems is now better than ever thanks to the development of new technology, methodology and standards within the private security industry. The introduction of Unique Reference Numbers (URNs) has also revolutionised the way that police respond to alarm activations. In the past two decades, the number of false alarm activations generated by security alarm systems has reduced dramatically, from an average of 1.36 per system per year in 1995 to 0.10 per system per year in 2013. Police are now more likely than ever to respond to a genuine alarm, and more likely to catch criminals in the act when they do. As well as helping the police to catch criminals, a well-positioned alarm will also act as an effective deterrent to would-be criminals.

Another security solution that is becoming increasingly common in the protection of vacant property is CCTV surveillance cameras which can be rapidly deployed in most environments on a permanent or temporary basis. CCTV cameras are well renowned for their effectiveness in helping the police to catch criminals; evidence gathered using CCTV cameras is one of the most successful ways of securing convictions in court. Criminals are much more likely to plead guilty when faced with the undeniable evidence of being caught on camera. CCTV cameras also have the added benefit of being a proven deterrent to criminals, the placement of cameras alongside visible signage can prevent criminal activity for fear of evidence being recorded on camera.

Protecting vacant property, or property that is in the process of being constructed, can help to reduce the risk of vandalism, theft and squatting and should be taken into consideration to ensure that projects are completed on time and within budget.

As with all security products and services, quality should be the most important factor when it comes to procurement. The BSIA’s Vacant Property Protection Section comprises of a number of industry leading companies who can advise on the best methods of securing vacant property and can provide a wide range of solutions that fit the needs of each individual site.

The section has also published a number of guides for property owners and managers to help them understand the key considerations which should be accounted for when property is left vacant for any period of time.

For more information about protecting vacant property, or to find a reliable security company near you, please visit: www.bsia.co.uk

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Fitness for Purpose and Contractual Interpretation

By Peter Sheridan, Partner, Sheridan Gold LLP

 

Frequently contract documents have both provisions requiring reasonable skill and care (a lesser obligation than a warranty of a result and often set out in the contract conditions) and other more detailed performance requirements, often set out in more technical specification documents. There can be a tension between these different contract documents; the recent Court of Appeal decision MT Højgaard A/S v E.On (2015) is an illustration. The issue was whether the contractor had warranted that foundation structures for an offshore wind farm would have a service life of 20 years, or whether the contractor was subject to a somewhat less stringent obligation.

The design was done with reasonable skill and care but the service life of 20 years was not achieved.  The contractor had complied with specifications and standards, but one of these (J101, an international standard for the design of offshore wind turbines) contained a significant error. The foundation structures (monopoles driven into the sea bed) which the contractor designed and installed failed shortly after completion.

The Court of Appeal accepted that there are contracts that require a contractor (a) to comply with particular specifications and standards and (b) to achieve a particular result.  The design and build agreement in IBA v EMI (1980) was a contract of that character. There a contractor undertaking design and build was found to be subject to a fitness for purpose obligation. What the Court of Appeal had to address in MT Højgaard was whether the contract there was one of that character. That involved applying the rules of construction to the “diffuse contract documents” in the case (which included conflicting provisions). The case is therefore a recent illustration of the courts’ approach to the interpretation of contracts. The context was a dispute as to whether the contractor was subject to a strict obligation to achieve a result (a fitness for purpose obligation) or a less onerous obligation to design with reasonable skill and care. The contract documents were “of multiple authorship” and contained “much loose wording”. There was accordingly scope for the court to apply the rules of contractual interpretation (considered in the writer’s previous article) to arrive at the correct meaning. Interpretation in this context is an iterative process, which involves checking each of the rival meanings against the other contractual provisions and investigating its commercial consequences.

There undoubtedly was a term of the contract, in the Technical Requirements (TR) which, taken alone, was a warranty of a service life of 20 years, i.e. a strict obligation. All the other terms of the TR, however, suggested that what was required was a design life of 20 years. A design life is not absolute: the structure will not inevitably function for 20 years (although it probably will).

The contract conditions took precedence over other documents and the requirement there was reasonable skill and care. The TR were a detailed were a detailed document which came fourth in the order of precedence. If there were an absolute warranty of quality, one would expect to see it in the contract conditions and not tucked away in the TR.

The factual background was relevant in the following way. A reasonable person in the position of the parties in this case would know that the normal standard required in the construction of offshore wind farms was compliance with J101 and that such compliance was expected, but not absolutely guaranteed, to produce a life of 20 years.

Adopting an iterative approach to the construction of the strict obligation provisions found in the TR, it did not make sense to regard them as overriding all other provisions of the contract and converting it to one with a guarantee of 20 years life. Put another way, there was inconsistency between those TR provisions on the one hand and all the other contractual provisions on the other hand. Jackson LJ stated that the court must not be led astray by that inconsistency.

The conclusion of the Court of Appeal in this case was that the sub-paragraphs in the TR which indicated the strict obligation were inconsistent with the remainder of the TR and J101 and were too slender a thread on which to hang the warranty of 20 years life for the foundations. The trial judge had reached the opposite conclusion, which illustrates the uncertainties of contractual interpretation of inconsistent documentation.

 

 

For more information, contact Peter Sheridan, Partner at Sheridan Gold LLP

T: 01737 735088

E: psheridan@sheridangold.co.uk

 

 

 

 

 

 

 

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Housing crisis continues to hit Scotland

New figures released today show that the total number of new homes built in Scotland fell for the second consecutive quarter.

According to the latest Scottish government housing statistics, the latest figures are down 22% on the same quarter in 2014, with building levels half of the levels seen in 2007.

The figures reveal a five per cent fall in the number of new homes being built in the year end to June.

Philip Hogg, Chief Executive of trade body Homes for Scotland, described the figures as “truly shocking” and said there were few positives to be taken from the findings.

He said: “Not only do we see a fall in the latest yearly figures, the last two consecutive quarters have also shown a drop.  There has also been a 22 per cent decrease on Q2 levels compared to last year but it is when you look at the position in 2007, prior to the economic downturn, that you see the true magnitude of the problem with completions down more than half.”

Mr Hogg said the Help to Buy funding was causing uncertainty amongst buyers and builders due to its “stop/start” nature. This led to difficulty in forward planning and maintaining growth.

He commented: “The unfortunate truth of the matter is that today’s statistics show that the housing pressures facing Scots show no sign of abating.  If we are really serious about tackling the housing crisis, we must recognise two fundamental things.

“The first is that any ambition to increase levels of ‘affordable’ housing is welcome but is only a minority part of the picture.  Affordable housing delivery is inextricably linked to the building of homes in the private sector, the engine of housing delivery, through the direct contribution the industry makes through planning policy – so if we want to build more affordable housing, we must encourage and facilitate more private sector development.

“The second is that the majority of Scots, as research firmly shows, aspire to own their own home.

“Having an effective and accessible Help to Buy (Scotland) scheme without funding gaps is crucial on both of these counts, as is a balanced housing policy approach which places equal emphasis on having enough homes of all tenures in the right places to meet the diverse housing needs and aspirations of all those living in Scotland.”

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Jaguar Land Rover to receive £16.6M grant

The Chancellor George Osborne has announced that nearly 200 highly skilled engineering and manufacturing jobs could be created in the Midlands due to £16.6M research and development funding.

Whilst visiting Jaguar Land Rover’s engine manufacturing facility in Wolverhampton, Mr Osborne confirmed that a grant of £16.6M would be made available to a research consortium led by Jaguar Land Rover. The funding will go towards the development of a more efficient transmission system that could be used in future models of their vehicles.

An initial 60 jobs will be created in research and development and could potentially lead to a further 130 manufacturing and engineering jobs being created if successful. The funding will also safeguard the positions of a 150 roles.

The Chancellor commented: “I’m determined to build on the success of Britain’s Engine for Growth in the Midlands, and today’s announcement is a crucial step in our plan.

“In the Spending Review I set out how we’re making significant investments in the Midlands, across transport, energy and culture. This grant is a further example of how this Government is backing businesses in the Midlands to grow and create jobs and support working people at every stage of their lives.”

The government grant is being awarded through the Advanced Propulsion Centre and will be matched by funding from the automotive industry, bringing the total project fund to over £33M.

The APC is a 10-year £1 billion partnership between government and the automotive industry to bring together innovators and producers of low carbon propulsion systems with the aim to transform Britain into a world leader for low carbon development and production.

Dr Wolfgang Epple, Director of Research and Technology, Jaguar Land Rover, said: “We are delighted that the Chancellor has announced £16.6M APC funding to support the consortium’s investment in this collaborative research project. This innovative research will investigate the feasibility of potential future transmission technologies. This innovative transmission could offer reduced weight, improved fuel economy and improved driveability on and off-road.

“Collaborative research like this is hugely beneficial for all partners including academia, the supply chain and the automotive industry. The collaborative research programmes we lead bring together some of the best engineering minds in the UK and allow us to multiply the effect of our investment and nurture UK-based technology investment. This approach is helping to develop the skills and technologies that will make the UK even more competitive.”

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New infrastructure survey reveals construction industry confidence

A new survey has revealed that the construction industry is in confident mood as the UK undertakes some of the largest infrastructure projects seen in decades.

The Infrastructure Outlook Report, which was commissioned by Tarmac and conducted by Ipsos Mori polled 300 senior decision makers within the construction industry and revealed that more than two thirds (68%) of respondents were confident about the overall outlook for infrastructure over the next year.

Tarmac Chief Executive Cyrille Ragoucy said: “It’s great to see that the construction industry is in a confident mood, but there is no room for complacency.

“Challenges remain in meeting the UK’s infrastructure requirements and there is concern about the delivery in the years ahead.”

However, there were concerns raised about HS2 and a lack of awareness of the Northern Powerhouse.

In a blow to the Chancellor George Osborne, the survey revealed that 86% of company bosses working in infrastructure knew little or nothing at all about the Northern Powerhouse.

Only 13% said they knew ‘a great deal’ or a ‘fair amount’ about the project.

Yesterday, the Chancellor announced the HS2 link between Birmingham and Crewe will open in 2027, six years ahead of original plans.

The HS2 link from London to Birmingham and the planned HS3 link between Manchester and Leeds received an unenthusiastic response from respondents. The results from the survey suggested that construction companies were far keener to see road networks maintained and upgraded.

Over 50% felt that London would be the biggest beneficiaries of the government’s infrastructure plans, with only 4% feeling the North West would benefit the most.

66% thought the government needed to do more to meet the UK’s long term infrastructure needs, feeling the nation still fell short of what is being delivered by countries internationally.

Andy Rowley, Tarmac Commercial Director, said: “The Northern Powerhouse is a flagship Government initiative to drive the economies of the North. But, while 62 per cent of respondents have heard of its name, most actually know nothing or little about what it actually is, suggesting that the concept needs to be fleshed out with more tangible programmes.

“The North is making steps, including in building infrastructure, to enable northern businesses to win more opportunities and create the wealth and jobs needed.”

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