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Ground Information… A Game Changer?

Van Oord UK Ltd & Anr v Allseas UK Ltd

[2015] EWHC 3074 (TCC)

In the case of Van Oord and Allseas the Claimants (OSR) made a number of disruption and prolongation claims against the defendant (AS UK) which arose on a project which included the laying of a gas export pipeline in the Shetland Islands.

The Contract provided that should OSR encounter ground conditions which differ from those described and which ‘an experienced Contractor could not reasonably have been expected to foresee following an examination of those documents and data which substantially modified the scope of work, contract price or completion date then notice should be given’.

Mr Justice Coulson referred to a judgement by Mr Justice Akenhead in which he stated:

“I am wholly satisfied that an experienced contractor at tender stage would not simply limit itself to an analysis of the geotechnical information contained in the pre-contract site investigation report and sampling exercise. In so doing not only do I accept the approach adumbrated by Mr Hall [the defendant’s geotechnical expert] in evidence but also I adopt what seems to me to be simple common sense by any contractor in this field.”

Mr Justice Akenhead therefore refused the approach that stated:

‘if the ground conditions were not expressly identified in the geotechnical information provided pre-contract, then they had a claim for unforeseen ground conditions’.

In the case of Van Oord and Allseas, the claimant presented their case based on the results of a probe survey; specifically, that the ground encountered differed from those presented in the survey.

On review, it was found that the subsurface conditions were, in the most part the same as those described in the Contract documents. The Judge stated:

“Every experienced contractor knows that ground investigations can only be 100% accurate in the precise locations in which they are carried out. It is for an experienced contractor to fill in the gaps and take an informed decision as to what the likely conditions would be overall.”

In addition to the above, the claim had already failed at the first hurdle on the basis they had failed to give proper notice under article 22.

Legislation Update…

2016 Legislation Updates Reviewed

There were several UK legislation updates impacting construction in 2016 and we wanted to recap on the key issues:

CIS Compliance – The Test

The compliance test for subcontractors to receive payments gross under the construction industry scheme (CIS) has changed in a bid to improve the operation and reduce the compliance burden of the CIS.

Modern Slavery Act 2015

Commercial organisations with turnover of over £36m are required to issue a formal statement each year to comply with the requirements of the Modern Slavery Act 2015.

The Act requires a record to be kept of action taken to ensure their business and supply chains are free from slavery and human trafficking.

National Living Wage

The 1st April 2016 saw the introduction of the National Living Wage which was set at £7.20 per hour for workers aged over 25.

Insurance Act 2015

On the 12th August 2016, the ‘Insurance Act 2015’ came into force. It saw the introduction of a duty of “fair presentation” of risk.

European Single Procurement Document (ESPD)

The intention of the ESPD is to reduce the administrative burden for tenderers.

It allows all businesses to self-declare electronically that they meet the required regulatory criteria or commercial capability requirements.

Only the successful tender will be required to demonstrate compliance.

Health and safety offences

New sentencing guidelines for health and safety offences came into force on 1 February 2016.

 Gender Pay Gap

February 2016 saw the publication of draft regulations which intend to address the gender pay gap.

The regulations propose imposing mandatory reporting for employers with a headcount in excess of 250.

Corporate Criminal Liability

The courts approved the first deferred prosecution agreement in relation to the corporate offence of failing to prevent bribery under the Bribery Act 2010 and the Serious Fraud Office brought the first charges against a corporate for the same offence.

In February 2016 Sweett Group was ordered to pay around £2.35m for a breach of the Bribery Act 2010.

 

Training… NEC, Commercial?

 

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The eternal student… That’s us…

Yes, it’s true, we’re always learning.  New contracts, case law, legislation updates; we just can’t get enough (yes really) and it really has been the key to our team’s professional success.  But what about you and your company?

Do you put (hide!) contracts in a deep dark draw; hoping they will never need to see the light of day (because they’re quite intimidating, right?).  Well the truth is, with a little bit of knowledge and support, they don’t need to be.

In this ever-changing commercial construction industry (which can be a contractual minefield) it is critical to ensure your team know where they’re at in terms of knowledge and commercial understanding.

‘The amount of money that is inadvertently given away within the construction industry (often by the smaller companies) simply because they don’t understand; is unbelievable’ K Taylor

Here at KJ Taylor Consulting, we try and make contractual and commercial awareness as painless (and on occasions interesting!) as possible.

We deliver bespoke, time conscious bursts of information and training all of which are relevant to your company’s projects and contracts.

We have been where you are, we know you can’t pull your contracts team offsite for a week to ‘learn’.  We take the necessary knowledge to your team and deliver in a cost and time efficient manner.  Coupled with ongoing support from our commercial experts, it is the absolute recipe for success.

 

 

 

 

Delivering Commercial Excellence

Kelly Taylor is an experienced Managing Director, Financial Director and Commercial Manager who qualified as a Quantity Surveyor (BSc Hons.) and carries exceptional credentials.

Having spent 17 years working within the construction industry; 2013 saw her invited to join the board of directors at SSI Services (Part of South Staffordshire PLC.).

In recent years Kelly, has taken efficient construction dispute resolution to another level.

These disputes need an efficient and firm lead to ensure the most cost effective solution is delivered for all parties.’  Kelly Taylor – Director

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“I have successfully worked with Kelly on several technically & contractually complex high value construction contract issues with large national Contractors & Employers. Kelly’s commercial management & forensic analysis skills coupled with her ability to quickly identify & get to the nub of complex matters shone through. I found Kelly to be an effective & efficient negotiator, at both pre-& post contract stages, who is able to competently argue a case & defend a position based on the relevant facts & the applicable law which she always ensures have been properly & thoroughly investigated beforehand.

Dennis Baldwin – Arbitrator Adjudicator Mediator

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‘Kelly really has been there, seen it and earned the T-Shirt.  Having started out working for a small Sub-Contractor she has scaled the ladder of what is a predominantly male dominated industry to work through some of the hardest, most contentious contracting disputes and yet seems to deliver a successful result every time (with a tenacity I have yet to experience anywhere else). 

She has experienced all levels of contracting; including multimillion pound projects/disputes. 

She is definitely one to watch (in the best possible way!).’

D. Olding – Director

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Kelly Taylor was a Managing Director of 2 businesses within the prestigious SSI Services division of South Staffordshire Plc for nearly 2 years.

The businesses that she managed had a combined turnover of more than £10m with over 100 employees.

Kelly demonstrated a broad and astute business sense, with negotiating skills a real asset and an eye for detail creating an extremely strong but fair director. Kelly is an exemplary leader.

Gaynor Baldwin – Director

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Taylor Consulting – Who are they?

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KJ Taylor Consulting is led by Kelly Taylor, a qualified Quantity Surveyor, Commercial Consultant and training Adjudicator.

Having held appointments within the construction industry as Managing Director, Financial Director and Commercial Manager for the last 17 years, Kelly carries a vast experience with projects of varying sizes in most sectors including Petrol Chemical, Nuclear, Rail, Airports and Utilities.

Having worked for a large scale Plc. and utilities company between 2011 and 2015 and having held the responsibility of resolving their largest construction disputes, Kelly held an employed 100% track record or resolving disputes (many of which were six figure accounts) amicably whilst maintaining the client contractor relationship.

KJ Taylor Consulting Ltd. was incorporated in 2016 with a key focus of providing commercial support to construction companies across the UK, specifically specialist contractors.

I recently worked with KJ Taylor Consulting Ltd to review and negotiate a problematic Framework contract and provide representation at Client meetings
Kelly has a detailed and thorough understanding of NEC frameworks and is an outstanding communicator who remains impartial, focused and objective, particularly under pressure and in stressful situations. Her Contract expertise, knowledge and professionalism delivered outstanding results.

Quite simply Kelly is the difference between success and failure. I have no hesitation in recommending Kelly who goes that extra mile to get results
Kelly is an accomplished lecturer and provided ‘in house’ training on the NEC contract. I was impressed with the level of enthusiasm, knowledge and useful techniques provided during the day

From her extensive commercial experience and P&L responsibility, Kelly is not only able to make the NEC 3 Engineering and construction contract relevant and pragmatic; she makes it fun, interesting and memorable.
Sean Kelly
Director Of Customer Service

Kelly is an exceptionally astute, passionate and commercially adept individual who has a phenomenal knowledge about the construction sector. Her understanding of NEC frameworks coupled with her commercial and financial skills serves to benefit those who have the sincere pleasure to work with, opposite and alongside her. She has a clear, methodical and inclusive approach to working which makes working with Kelly fun, educational and successful.

Gareth Brewerton
Group General Counsel, South Staffordshire Plc.

NEC3 – ECC – To be kept out of the dark

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What is it about contracts that make people want to hide them in the draw (without having actually read the document) in the hope that they will never have to read or refer to them again?

Why does the phrase ‘Refer to contract…’ strike fear into the heart of most construction individuals?

Is it the presumed legal ‘lingo’ which quite frankly has even the most intelligent individual reading a sentence three times in a bid to understand the basics of what is being said?

Cue…  The NEC3 Engineering and Construction Contract (June 2005)…

The NEC3 ECC (June 2005 Edition) (previously the New Engineering Contract) is not to be feared. It is to be become the process partner for contractors executing contracts.

The NEC3 ECC has been developed to be used in engineering, building and construction environments and has been written to meet the needs of contracting parties.