The Party Wall etc Act 1996 is a strange piece of legislation written by Surveyors (some say for Surveyors), which operates in unusual ways.  Generally, it regulates building works between adjoining neighbours and creates a system whereby surveyors are appointed by the parties to settle the matter by way of a legally binding award, akin to arbitration. It was recently emphasised in the Court of Appeal that the Act is designed to “constitute a means of dispute resolution which avoids recourse to the courts”[1].

The mechanics and circumstances under which a Party Wall Surveyor discharges his statutory duties can be contentious and uncertain, often with one party to the procedure being unhappy with the outcome and unwilling to pay some or all of the professional fees incurred. This may lead to a Party Wall Act Surveyor having difficulty recovering his fees.  

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Unfortunately, due to the current poor economic climate, there seem to be continuous news reports of developers going into administration and liquidation.

Contractors employed by a developer who has gone bust are advised to immediately check out the contract terms, to ensure they take the necessary steps to maximise the chance of recovering the monies due. Most standard construction contracts contain a clause which states the contractor must prepare an account which sets out the following:

-                     value of works completed at time of valuation

-                     removal costs

-                     cost of materials and goods

-                     loss and expense claim

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Unfortunately the most common answer to this question is ‘no’, but it doesn’t have to be. Think ahead.  

When contractors enter into contracts with employers they must be aware that unless the retention monies have been set aside in a formal legal trust the money is not protected if the employer goes into liquidation.

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I know from talking directly to my clients about their businesses how tough current conditions are out there in the construction market place. Lots of my clients are having difficulty getting payments in from employers and contractors.

Current economic conditions have caused many companies to go into administration and many are on the brink. Numerous firms are owed money by companies which are in financial difficulties and/or administration and I am often asked, “how far is it worth pursuing a company in financial difficulty to recover debts?” The short answer to this question is as follows: Read the rest of this entry »

 ‘Freedom of Contract’ means parties enter into a Binding Agreement to do anything provided it is not illegal, contrary to Statute or Public Policy.  This freedom comes at a price – once a Contract is entered into, the Contractor will be held to it, even if it later turns out you believe the Contract was unfair or unreasonable.

Peter McHugh and Mark Scotney specialist construction lawyers at Midlands firm Challinors, along with Andrew Maguire, Barrister at St Philips Chambers, Birmingham, explain what contractors must look out for before agreeing a contract. 

“If you are invited to agree to the terms of a Contract, whether Bespoke or one of the Standard JCT Forms of Contract, consider the contents very carefully.  There may be clauses which appear to be unfair; the Contract may be written to bias the Employer and be contrary to the wishes of the Contractor.  If you sign the Contract, you are stuck with it. If you try and get out of the Contract, then a dispute will almost certainly arise – it is difficult to alter the terms of a written contract, as the causes of action are narrowly defined and exercised with great caution by the courts.

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