Top 5 construction legal issues to look out for in 2019
Simon Lewis and Hannah Gardiner take a look forward to five of the major legal issues and developments facing the construction industry in 2019:
1. Disclosure Pilot Scheme
As of 1 January 2019, a new mandatory Disclosure Pilot Scheme (DPS) is in operation, for a period of two years, in the Business and Property Courts, which includes the Technology and Construction Court, subject to limited exceptions. The purpose of the DPS is to bring about wholesale change in the approach to disclosure of documents by parties and courts and the litigation culture generally.
The DPS requires a greater focus on the key 'Issues for Disclosure' rather than every issue pleaded and on the co-operation and engagement of the parties. It is also intended to encourage greater use of technology and greater oversight and case management by the judiciary. The DPS introduces five new 'Disclosure Models' to encourage a move away from standard disclosure as the default, as well as a new concept of 'Initial Disclosure'. For more, see the new Practice Direction to the Civil Procedure Rules, PD51U.
2. Alternative Dispute Resolution (ADR)
In December 2018, a working group of the Civil Justice Council published its ADR and Civil Justice Final Report, which makes recommendations about ADR following the working group's review of the ways in which ADR is currently positioned within the civil justice system in England and Wales. Whilst it will take time for the report to be reviewed, discussed and actioned, the suggested move towards a "presumption" that ADR should be attempted together with the costs consequences for failure to mediate could mean that more claims will be diverted away from judicial determination, and that we shall see more emphasis on other forms of alternative dispute resolution (not just mediation) in 2019. For more, see here.
The ongoing development of the international BIM standard ISO 19650 will help to drive BIM more securely into the construction process. We will be tracking the ISO as it progresses and also keeping an eye on developments in the Digital Built Britain project, of which BIM forms a significant part.
4. New contracts
2018 saw a number of standard form construction contracts being published by industry bodies, like RIBA's professional services contracts and building contracts, NEC4's alliance contract, and ICC's design and construct contract and target cost contracts. In 2019, keep an eye out for FIDIC's Emerald Book, RIC's new consultant appointment forms (which they ran a consultation on in 2018), and the NEC's new public sector Z clauses to complement their NEC4 suite.
For those in the construction industry who tender for work and services based in EU countries or who advertise work to and request services from businesses in EU countries, this is a particular concern – and we looked at the government's guidance note entitled "Accessing public sector contracts if there's no Brexit deal" here.
The government has followed up on this by laying before Parliament on 13 December 2018 a draft set of Regulations to cover changes which will need to be made to the existing procurement Regulations (Public Contracts Regulations 2015, as well as those on utilities and concession contracts) on exit day in the event of a no-deal Brexit. The effect of the draft Regulations would be in essence to maintain the status quo in terms in the UK procurement regime, with some 'tidying-up' to reflect the exit from the EU. However, there is no certainty as to whether the draft Regulations will ever come into force, if the UK leaves with a deal, or what further changes may be made to the final version.
Simon Lewis is a partner and Hannah Gardiner a solicitor at law firm Womble Bond Dickinson.