Great to team up with Dentons yesterday on a roundtable discussion with a mutual client on contractor insolvency. Some key takeaways below 👇
Counsel, Dentons – Construction Specialist (non-contentious) within the Projects Group
Yesterday, we joined forces with Belshaw Building Consultancy to host a roundtable discussion with our mutual client, focusing on contractor insolvency. We delved into its impact on the funding of a development, as well as its progress and completion. I particularly enjoyed this session because of the diverse expertise brought to the table. It's the wider conversations like this that yield the best advice for our clients. There is never just one view on these deals, and that is the beauty of working in commercial law. For some very high-level key thoughts for developers and funders: 🛠 Relationships on-site are crucial. 💷 It is critical to comply with the payment mechanism in the building contract and to sensibly value the works as the project progresses. ✒ Getting the legal documents in place at the outset (contracts, collateral warranties, bonds, insurance) is very important and saves headaches later (yes, the collateral warranties are important 😉 !). 🖍 Copyright clauses ensure that you still have access to design documents. Key is for these licences to be irrevocable, royalty free and non-exclusive Dentons: Simon Tweedle, Charlotte Miles, Ian Fox Belshaw Building Consultancy: Richard Trubshaw, Tom Simmons, Daniel Baluk
Rupert Shaw
4mo
Now we are not often known to agree SJ, but you are bang on with this issue. The principle of the JCT D&B is so raped and pillaged by legal eagles I don’t think it even serves purpose for clients in terms of security or quality. Clients should expect more from consultants in terms of “owner and responsibility for their design” rather than just passing the buck 💯% to the contractor during a 4/6weeks tender period.
Director at Collins Construction Ltd
5moAll the above is of course relevant, and good to hear it was a positive debate. Ultimately it all comes down to amended contracts, especially D&B. The JCT is supposed to ensure fairness to both parties. Once it’s amended, that principal is a distant memory. I was asked today by a senior player in the PM market why 3 respected contractors have ceased to exist in the last 2 weeks. Amended D&B contracts was my response. The contracting side of the industry desperately needs to engage with the legal side. Or there will only be 1 side of that party left, and I’m not sure they can actually get the jobs built.