The Royal Institution of Chartered Surveyors (RICS), the Building Societies Association (BSA), and UK Finance have agreed a new process for the valuation of high-rise buildings, called the External Wall Fire Review process (EWFR). The new industry-wide valuation process which will help people buy and sell homes and re-mortgage in buildings above 18 metres (six storeys). The industry is also encouraging the owners […]
We would like to reassure you that it is business as usual for MPG. However we have received a number of concerned calls from clients and in response have drawn up the help list of bullet points below:
Look at the operational provisions of your contract:
- Are you obliged to submit a revised programmed due to disruption or notify your client;
- Does your contract obligate you to give early warnings of delays, if so you must do so promptly;
- Does your contract require regular progress reports, if so clearly set out impacts the disease has on the project.
Can you make a claim?
The starting point for your rights and obligations, should you find yourself affected by Coronavirus, will be your contract. None of the standard form contracts (e.g. JCT and NEC3/4) refer expressly to epidemics or spread of diseases.
Outbreak of illness does not fall within the meaning of “excepted risks” used in most of the standard forms so, contractors may have to rely on other clauses in the contract such as suspension, force majeure and prevention, or change in law. Contractors may not be able to point to one clause for a full remedy, and may have to rely on multiple provisions – used in conjunction with the common law – in order to be granted both time and money.
What about common law remedies?
Contractors may also consider common law remedies but the primary basis of entitlement should be the relevant and applicable terms of the contract.
Is it Force Majeure?
Does your contract contain force majeure clauses, unexpected circumstances outside a contracting party’s reasonable control. Check what events this covers and you may be able to claim costs arising from the impact. Check also with regards to any subcontractors you may have.
What if the contract doesn’t contain a force majeure provision or what about claiming Impossibility/ Frustration/Prevention?
Can you argue the effects of Coronavirus itself or of government action aimed at combating it (such as mandatory quarantines) have prevented or frustrated the parties’ performance of your contract, or made performance impossible? If you can’t make a claim or classify Coronavirus as an event of force majeure, you might be released from further performance. Prior to asserting either the occurrence of a force majeure event, or that a contract has been frustrated, it is very important to take legal advice.
What is the position under an un-amended NEC3 Contract
If you have entered into an un-amended NEC 3 contract Coronavirus may be a Compensation Event under 60.1 (19). This covers an event which stops the contractor completing the work at all or by an agreed date, an event that couldn’t be prevented, would have been judged as an event with such a small chance of occurring it would be unreasonable for the contractor to consider it when entering into the contract.
What about an unamended JCT contract?
Clause 2.26.14 of the JCT Design and Build Contract identifies “force majeure” as a Relevant Event which entitles the contractor to an extension of time and entitles either party to terminate the construction contract under clause 8.11.1, it is not a Relevant Matter and gives no entitlement to losses and expenses.
What about insurances?
If your operations are impacted by Coronavirus, you may have in place insurance that responds to at least some of your losses. Business interruption insurance policies in particular may cover disruption caused both by the disease itself and by public policy responses to it, such as enforced quarantines. However, there are often exclusions in such policies. it is important that you notify your insurers promptly.
There may be a number of remedies under your contract that can be used to grant relief from performance if the coronavirus has an adverse impact on any of your construction projects. These may be e.g. force majeure or claims for extensions of time and relief from liquidated damages. However, it will very much depend upon the exact wording of the contract itself and the impact of the virus on the project and any other surrounding circumstances.
For further more detailed information please contact us directly and we will be able to provide advice specific to your circumstances and contract.
As the impending date of Brexit approaches, Britain’s construction sector continues to whither in anticipation of uncertainties tied to this unprecedented historical event. Below are a few things in particular firms should be worried about, but as in all volatile markets, we should be patient for this cautionary period to end, especially as plans for an exit strategy become more clear.
Earlier this year, our manufacturing sector saw a major surge in output as companies began to prepare for tighter restrictions on cross-border movement of workers and goods. It is safe to say that the surge is, for the most part, over and we are now all eagerly anticipating the next phase of the exit strategy. Prices for imported goods, including a massive amount of building materials, are likely to increase with new tariffs and taxes and will likely take longer to arrive as movement becomes more tightly controlled.
Additionally, it can be assumed that after the withdrawal from the EU, we can expect a major labor shortage. More than a quarter of all construction workers in London are EU migrants and if it’s harder for them to reach job sites, it’s very possible they won’t attempt to gain work here. The available labor that is left will consequently become more expensive, with projects facing extended timelines to completion.
Wary investors are pulling back as well, removing revenue streams from the industry that help feed the delivery of larger projects such as the HS2 (which our firm is assisting on). On the other side of this coin however, the government may be able to assist with more funding that would otherwise be spent on EU membership.
Whatever the future holds, we are confident the innovation and resiliency of the firms we serve will continue to help build a better future for all Britains, and we are very excited to walk alongside them through these uncertain times.
Michael Gallucci serves as the managing director and owner of MPGQS, a leading property and construction consultancy headquartered in London. Since 1996, Michael has built a reputation as a trusted partner for firms in need of his extensive expertise, great energy, and an unparalleled eye for detail. These strengths, in conjunction with his ability to build a team from the greatest talent in the industry, have paved the way for MPGQS to become a leader for handling large scale international projects.
MPGQS operates from offices around the UK, Europe, and the Middle East, and serves clients in areas relating to financial, commercial, contractual, and engineering aspects for large construction projects. From quantity surveying, project management, and dispute resolution, MPGQS works with clients on all levels of a project from inception to completion.
Learn more about our company by visiting our company website or visit us on social media.
Congratulations to Michael Gallucci who recently competed as part of Team GB at the 2019 Transylvania Multisport European Championship. All the hard work and training paid off and he finished in the top 20 in his age group in the Aquabike event.
2019 continues to be a busy and successful year for MPG and in particular our Dispute Resolution team whose most recent success won a settlement of over half a million pounds for our client. Recent commissions include The Science Museum, West Ham Station Ticket Hall, UCLH, Grants Whiskey and GOSH and in June we received our Certificate of Registration as a firm regulated by RICS for the coming year.
In addition MPG will shortly be launching a series of Webinars around NEC4 and dispute resolution, more information to be published here shortly.
Since moving to our new offices at the start of the year MPG have expanded their team and are pleased to welcome Peter Toseland (Project Director) and Martin Cripps (Bid Manager), and Graham Vinters (Planner & Project Controls), who are now part of our Pre-Construction Team assisting our clients with their bid and tender requirements.
The first quarter of 2019 has brought over 20 new projects to the practice so far from both new and existing clients. New commissions include Expert Witness, Dispute Resolution and Commercial services on Fulham Gas Works, 15 Kean Street, IKEA Greenwich, Hanover Square, Hobhouse Court, O2 Cineworld, South Bank Apartments, Lewisham Ambulatory and Park Crescent in Regents Park. Demand for the expertise and experience of our dispute resolution team continues to grow.
We’re delighted to announce that due to expansion, our Watford office has moved to a new location. We’re also proud to have achieved RICS regulated status, and we have updated our company name to reflect this.
Our new address in Watford is 42-44 Clarendon Road, Watford WD17 1JJ. Please note we also have a new Watford telephone number. Telephone: 01923 312306. We’ve moved to make room for our growing dispute resolution team.
Please update your records with our new Watford details. You can find all our contact details across the UK and worldwide here: Contact
Having achieved RICS regulated status, we’ve changed our company name to more accurately reflect the business in 2019. We’re now MPG Chartered Surveyors Ltd.
Regulated by RICS designation shows that MPG:
- practises to globally recognised standards
- behaves ethically, and acts with integrity and honesty
- has the required skills and competencies to do the job
- manages conflicts of interests transparently
- safeguards the security of client money
- manages its finances appropriately
- provides adequate and appropriate indemnity for your work
- handles complaints and disputes fairly.
International construction consultancy MPG has appointed Ryan Dando as Commercial Manager.
Ryan has more than 17 years’ experience in the construction industry, including over a decade working on various forms of the NEC contract.
He has worked across sectors including retail, social housing, stadia and residential as well as commercial offices, aviation, rail and design. His experience includes work on landmark projects, such as Westfield at White City, the London Olympic Games and the redevelopment of Heathrow Terminal 2.
Prior to joining MPG, Ryan was a commercial manager with Atkins, and previously worked as a senior cost engineer and contract administrator with Crossrail on the Bond Street station project and with Morgan Sindall as commercial manager for MEP and fit out of Crossrail stations.
His core skills include cost engineering, project controls and contract administration under the NEC form of contract. Other skills include anticipated final account management, procurement of works packages, tender analysis and contract negotiation as well as early warning and compensation event management.
As construction contracts get more complex, our new report shows you how to protect your interests
With construction disputes on the rise, it is vital that contractors understand how to protect their interests. Our study explains how to get to grips with sweeping changes to standard contracts commonly used in the UK and the Gulf region.
The 20-page report titled ‘Construction Claims and Defence’ also looks at global claims, a means of getting compensation in a dispute even when the circumstances aren’t crystal clear.
Our managing director, Michael Gallucci, says: “The construction sector in the UK is awash with disputes and legal claims. A healthy reaction to that is that organisations are increasingly using standard contracts that are better suited to higher value, collaborative projects. Figures suggest an increase in the use of NEC and FIDIC contracts with use of JCT contracts declining. Having said that, these are complex instruments made even more complex in the way they can be interpreted and implemented by different jurisdictions and in different contract agreements. The comprehensive update to the FIDIC Yellow greatly extends its coverage and makes it even more important that contractors and engineers have comprehensive and well-managed programmes in place.”
The report outlines the changes to FIDIC. It includes sections on concurrent delay principles and implied terms regarding prevention. The report explains when and how to make a claim under the contract and when to claim for breach of contract. It also looks at extension of time assessments, claims for additional payment for prolongation and claims for disruption and acceleration costs.
Download it at mpgqs.com/construction-claims-download/,
A new legal ruling is a stark warning to contractors about beginning work on a project without finalising the contract first, says a leading construction consultancy.
MPG, which advises contractors, employers and project managers worldwide, says the industry should take note of the Court of Appeal decision. It reversed a previous decision on the dispute between AMEC and Arcadis, ruling that even though a contract hadn’t been completed, terms in a letter of instruction still applied.
MPG’s managing director, Michael Gallucci, says: “In this particular case, it meant there was a legally-binding cap on the contractor’s liability, but the ruling means that any terms in a letter of instruction are binding until there is a finalised contract that specifies a different agreement.”
Problems began when Arcadis was employed to design a car park and began work with only a letter of instruction from the employer, AMEC. It was planned that both would sign up to a detailed contract but it was not finalised.
When it was discovered that the car park had to be rebuilt because of faults, Arcadis rejected claims that it was liable because of design error. It also said a cap on liability had been agreed at £610,000, compared with the £40 million cost of rebuilding the structure.
When the case first came to the Technology and Construction Court, those claims were rejected, meaning Arcadis would be fully liable, but the Court of Appeal ruled otherwise. That was because even though the letter of instruction didn’t mention a liability cap, it alluded to pre-existing terms and conditions agreed between the two companies on another project, which did specify a cap.
Michael sums up: “It’s often tempting to forge onwards with a project but contractors do so at their peril without a finalised contract in place. We would advise all parties to ensure that an adequate contract is concluded before work starts, and that the contractor has effective programmes in place to ensure that any claim that does arise can be resolved without the need to go to court. That might seem obvious but it is surprising how many projects go ahead without these fundamentals in place. It is one reason that the construction sector is beset by legal disputes, so contractors, employers and PMs involved with new projects all have a responsibility to ensure best practice is observed before work begins and throughout the lifetime of the project.”
For more information, or advice on construction contracts, contact Michael Gallucci LLM MRICS MCIArb MAE, Managing Director, MPG, Email: email@example.com
Preparation is crucial when taking a construction dispute to court, a new legal ruling has underlined.
Construction consultancy MPG says the High Court decision should also serve as a reminder to contractors that they need effective programmes in place before commencing a contract in case there is a dispute in future.
The claimants in Clutterbuck and another v Cleghan lost because they failed to call an important witness, and the court refused to allow them to plug gaps in expert evidence at the last minute.
Michael Gallucci, managing director of MPG, said: “This is a wake-up call for anyone contemplating legal action, and their litigation team, that you must be fully prepared before you walk up the steps of the court building.”
Mr Gallucci, who advises leading construction companies and speaks internationally on contract law, said contractors must also prepare to protect themselves in the event of a dispute before even beginning work on a project. “Programmes are absolutely vital when claiming for delays or combating counter-claims,” he said. “They become yardsticks against which to measure the effects of delays, which are a frequent cause of disputes.”
An RICS accredited mediator, Mr Gallucci said too many property and construction disputes end up in court. “Instead of rushing headlong into what should be the last resort, the parties in a dispute should seek to resolve their problems through mediation, which is quicker and less expensive,” he said. “The Clutterbuck trial lasted 11 days in the High Court, no doubt racking up a big legal bill for the claimants who in the end walked away empty-handed. There is no way of knowing if they would have had a better outcome if they had settled by mediation, but in most cases, it is a better and less painful way to reach a conclusion.”
He added: “Settling out of court with the help of a qualified mediator can even mean that the parties don’t fall out irrevocably and can work together again. That’s rarely the case after an acrimonious court battle.”