What to look out for in construction in 2024

Building Safety Reform

Building Safety Act 2022 (BSA)

Following the introduction of the BSA we have yet to see a court judgment that deals with a Building Liability Order or Information Order, which were introduced under sections 130 and 132 of the Act. The orders enable the courts to extend a relevant liability of a body corporate to any of its associates and make them jointly or severally liable. The BSA also introduced a retrospective 30 year limitation period for claims under the Defective Premises Act 1972, which will give parties who were previously prevented the right to bring a claim.

We can expect the courts to start to consider these new issues in 2024. We are also likely to see more cases being brought forward by parties who were previously barred due to the expiration of the limitation period.

Grenfell Tower Public Inquiry

The Grenfell Tower Public Inquiry, which closed in November 2022, is in the process of preparing its final report. The final report will contain the Inquiry’s recommendations based on the evidence provided in Phase Two. Although the report will not be published before April 2024 the Inquiry is hoping to send the report to the Prime Minister before the next anniversary of the fire, which will be 14 June 2024.

Climate change

Whilst there remains no universally accepted industry standard for construction contract drafting, the Chancery Lane Project has updated and published several new construction clauses throughout 2023 and there is the promise of new FIDIC net zero clauses in early 2024.

The JCT announced that a new suite of standard form contacts will be published in 2024. The JCT has indicated that the contracts will incorporate previously optional provisions relating to sustainable development and environmental considerations into the main document which will make them mandatory.

The COP28 climate summit, which was held in Dubai on 30 November 2023, suggested a shift towards renewable energy and away from fossil fuels. A central focus for the construction industry was a shift towards energy efficiency, regenerative practices and sustainable technologies. The agreements and discussions that took place at COP28 provide the construction industry with a useful roadmap for the future.  However the effectiveness of these resolutions remains uncertain and their ability tackle climate change is yet to be seen.

Collateral warranties

Historically, there has been some uncertainty as to the extent to which a collateral warranty can be construed as a construction contract.  In early 2024 the Supreme Court is due to hear the appeal from the judgement in Abbey Healthcare (Mill Hill) Ltd v Simply Construct (UK) LLP [2022], which is expect to give clarity on this issue.

Dispute resolution

Remote hearings

Since the Covid 19 pandemic and the shift to working from home we have seen the majority of the litigation process conducted remotely and this is likely to continue throughout 2024. The Ministry of Justice launched a new Online Procedure Rule Committee in June 2023, which is chaired by the Master of the Rolls, Sir Geoffrey Vos. The Committee is responsible for developing new rules for online proceedings and aims to ensure that the digital court is governed by rules that are suited to evolving technologies. The shift towards a more digitised justice system will continue to develop throughout 2024 and has the ability to make justice more accessible and user friendly, however the need for some in person hearings will always remain.

If you have any questions in relation to challenges you are facing in the construction industry please contact our  construction team for advice.

Alternative Dispute Resolution (ADR)

In November 2023 the Court of Appeal held in Churchill v Merthyr Tydfil CBC [2023] that a court can stay proceedings for, or order parties to engage in, a ADR process, provided that the order does not impair the essence of the claimant’s right to a judicial hearing and is proportionate to the legitimate aim of settling the dispute fairly, quickly and at reasonable cost.

The Court of Appeal’s judgment will inevitably lead to further orders from the courts for parties to engage in ADR to try to resolve the dispute and is a step towards mandatory ADR. Arguments, however, over the appropriateness of ADR and sanctions for failure to engage are likely to arise as there are currently no fixed principles for courts to consider before making such an order.

Arbitration

The Law Commission published its final report on proposed amendments to the Arbitration Act 1996, which was accompanied by draft legislation, in September 2023 (see Proposed Reforms to the Arbitration Act 1996). The Arbitration Bill 2023-24 was later introduced into Parliament and had its first reading on 21 November 2023. The Bill accepted the Law Commission’s recommendations in full and it is anticipated that the Bill will continue its passage through Parliament in 2024.

Modern methods of construction (MMC)

MMC, which focuses on modular and off-site construction techniques, are likely to become more commonplace within the UK in 2024. The Government is actively encouraging the use of MMC through policy such as the Construction Playbook. The Playbook sets out key policies and guidance for how public works projects and programmes are assessed, procured and delivered and expressly aims to facilitate the adoption of MMC. The widespread adoption of digital technologies, such as Building Information Modelling, and the potential environmental benefits of MMC will also encourage its use throughout 2024.