In 2018 Malaysia saw considerable developments in case law on statutory adjudication. Stakeholders' use of this form of dispute resolution mechanism continues to grow exponentially with no sign of abating. This article examines some of the significant decisions that the Malaysian courts handed down in 2018 and their impact on statutory adjudication under the Construction Industry Payment and Adjudication Act.
Every construction project, from contract negotiation through to the payment of the final pay application, involves the issue of the exchange of lien waivers for payment. In particular, the issue is that parties lower in the construction chain must provide unconditional lien waivers as part of their request to be paid. There are a number of imperfect solutions to this problem, including a conditional release. However, blockchain and smart contracts could be the perfect solution.
The Technology and Construction Solicitors' Association recently launched a low-value disputes (LVDs) adjudication service, which is being run on a pilot basis until November 2019. The LVDs service aims to give parties that wish to refer disputes for fixed amounts of up to £100,000 (excluding value added tax and interest) to adjudication greater certainty as to the costs involved.
The 2019 Conditions of Contract for Underground Works (Emerald Book) is a new standard form specifically for underground works that is the result of a lengthy collaboration between the International Federation of Consulting Engineers and the International Tunnelling and Underground Space Association. The Emerald Book contains several features aimed at addressing geotechnical uncertainty, including geotechnical baseline reports and mechanisms to adjust the time for completion and contract price.
Resolving construction disputes often involves unravelling complex issues and requires the analyses and opinions of expert witnesses in various industries relating to the project. Therefore, retaining an expert consultant as soon as litigation is imminent can be the difference between a party's pursuit or defence of construction litigation claims. To best utilise the leverage and advantages that non-testifying consultants offer, parties should retain legal counsel who are aware of the role that timing plays in expert retention.
The continuing development of robotics and AI is a potential game changer for the construction industry and may help to resolve (or at least improve) skills shortages and poor productivity rates. However, this technological future will also bring new risk profiles to construction contracts and additional contractual provisions to deal with matters such as IP rights, data protection, confidentiality, health and safety and cyber risk. Perhaps the real question is how this technology will develop and what its impact will be onsite.
New Swiss arbitration rules that are intended specifically for construction disputes contain several notable changes that may foreshadow the evolution of international construction arbitration procedures. Some or all of these innovations, which are aimed at improving efficiency and facilitating settlements, may prove to find widespread adoption among parties negotiating international construction contracts and arbitral institutions revising their rules.
In light of the discussion and hype surrounding artificial intelligence (AI), this article considers AI and construction law in the context of risk and contract management, as well as a number of existing technologies which could assist in this respect. With greater collaboration between lawyers and clients, AI can bring greater efficiencies and efficacies to contract generation, review, analysis and management processes.
Construction project schedules often generate disputes between project owners and contractors. These disputes commonly become the subject of claims that assign fault for delayed project completion to one party or another. When delays occur and float is available, each party may assume entitlement to the float on the project schedule and subsequent exemption from liability for damages relating to its delay; however, merely assuming float ownership can lead to unfavourable outcomes.
Terminating a construction contract is the last resort for employers frustrated by delays, defects or other problems. Three recent Supreme Court cases illustrate some of the pitfalls of termination for employers. In all three cases, the employers' attempt to terminate for cause was construed as termination for convenience, exposing the employers to significant liability towards the contractors, including for lost profits.
In 2017 the International Federation of Consulting Engineers (FIDIC) finally unveiled the Second Edition of the 1999 Rainbow Suite, Red, Yellow and Silver Books. This article examines how the FIDIC form deals with time and includes an appendix detailing the changes made to Clause 8, the primary clause which deals with time or 'Commencement, Delays and Suspension' from the original 1999 contract.
Clauses that require a contractor to obtain the employer's pre-approval of the cost of any additional works are increasingly common in lump-sum construction contracts. According to a recent Federal Supreme Court decision, these pre-approval clauses will be applied strictly, subject to certain exceptions. In its decision, the court enforced such a clause to deny a contractor's claim to recover the cost of additional works performed by a subcontractor.
Certifiers hold a key role in construction contracts. Certificates, statements and decisions issued by certifiers can have a huge impact on cash flow. Their actions can also provide a recipe for disputes where the certifier is viewed as, or is, one-sided or biased. So, what are the basic laws governing certification and what can be done when something goes wrong in the process?
If a trade contractor submits a bid that a general contractor relies on to win a contract, questions may arise as to whether that bid is a contract and whether it is binding. Even if the bid does not meet the elements of a contract, it can still be binding. The courts apply the doctrine of promissory estoppel to hold parties to their bids in the absence of a contract. Differences in jurisdiction and in the facts of each case may affect the outcome, but when a bid is submitted it should be assumed to be binding.
Underground utilities and pipelines pose potential problems for excavators and other contractors performing work below ground. Whether a business involves the construction of buildings primarily above ground or running pipes or cables below, there are issues to consider where a construction involves excavations. Ultimately, excavators must use care to avoid damaging marked lines and take all reasonable steps to protect underground facilities, pipelines and on-site people from harm.
A recent decision by the Swiss Federal Supreme Court ruled that a contractor's duty of loyalty continues even after termination by the employer. When the contractor stops its works for any reason, it has the duty to take all necessary measures to prevent any harm to the employer and must provide to the employer all relevant information about the works.
The 13th Court of Appeals in Edinburg, Texas recently issued an opinion that could eliminate the statutory employer protection for general contractors in certain circumstances if allowed to stand. The court held that in order to avail itself of the statutory employer defence, a general contractor must do something more than pass the onus of obtaining workers compensation coverage to its subcontractor. General contractors may need to rethink how they provide for workers' compensation coverage in future.
Pennsylvania's intermediate appellate court has affirmed a defence verdict for the design and construction manager of a major league baseball stadium. The court issued its ruling following extensive discovery and motions practice, a six-week bench trial in 2010 and two defence verdicts. The case has a number of key takeaways for complex, multi-party cases.
An application was recently made to restrain notice being given of a winding-up petition which sought payment of some £820,000 following an adjudicator's decision in respect of goods supplied and services rendered for the development and conversion of Victory House. The adjudicator had rejected Victory House's argument that it was not liable to pay the sum identified in the interim application because the parties had entered into a memorandum of understanding which provided for other payments to be made.
Proving waiver of a party's contractual right to arbitrate has often been a laborious obligation of the party bearing such burden. In the case between Legoland and Superior Builders, the court of appeals concluded that Legoland's actions in Superior's suit did not substantially invoke the judicial process; therefore, Superior failed to carry its heavy burden to show that Legoland had waived its contractual right to arbitrate. Accordingly, the court compelled the parties' dispute to arbitration pursuant to their arbitration agreement.