FPA Commercial Director Chris Miles considers the compliance of construction products and the impact the Grenfell Tower Inquiry Phase 2 report will have on this sector In the first article in this series, entitled ‘Inquiry Phase 2 Response – Time for change’, Dr Gavin Dunn takes a wide view of the
WTW, a leading global advisory, broking and solutions company today announced a partnership between its Affinity Insurance business and Kayna, the award-winning insurance infrastructure platform. The partnership has been developed to enable delivery of innovative WTW insurance solutions to SME clients in the UK and US through Vertical Software-as-a-Service (‘vSaaS’)
Yesterday’s publication of the final report of the Grenfell Tower Inquiry is a long-awaited milestone in the response to the tragic loss of 72 lives in June 2017. It is another difficult and traumatic moment for the bereaved, the survivors and relatives of the Grenfell Tower victims and the Construction
Hire Association Europe & Event Hire Association (HAE EHA) has announced that it is developing a new Theft & Fraud Reporting Portal as it calls for vigilance ahead of the August Bank Holiday, a time typically rife with criminal activity against the construction sector. The portal could support the recovery
Deposit alternative specialists flatfair have announced a bumper month with Build To Rent (BTR) sector landlords. And CEO Gary Wright says that smaller, private landlords should follow the lead of the corporate providers in choosing the additional protection offered by their No Deposit scheme. He said: “Understandably, landlords feel they
Underinsurance is a persistent problem that leaves property owners vulnerable to significant losses, often caused by something as simple as an outdated reinstatement value. To address the growing issue of underinsurance head-on, the Building Cost Information Service (BCIS), which has more than 60 years’ experience in collating and analysing construction
A challenge to a telecommunications infrastructure provider’s proposal to renew a lease at a much reduced rent under the Electronic Communications Code has resulted in a key ruling by the Scottish Lands Tribunal which will have ramifications across the industry. In order to renew a lease under the Code, an
By Matt Clark, Managing Director, Cardium Law As a legal firm specialising in the construction sector, we are seeing an alarming rise in insolvencies and statutory demands linked to unpaid loans, breaches of facility agreements, personal guarantees, unpaid invoices and adjudications. This trend is not merely a reflection of current
A petition with over 3700 signatures has been handed to Shropshire Council as Albrighton Village Action Group (AVAG) steps up its campaign to protect over 50 hectares of beautiful green belt. Mark Pritchard, MP for The Wrekin, joined concerned residents at The Shirehall to reinforce calls for Boningale Homes’ plans
Agreement with BBVS leaves SCS only joint HS2 venture without union access agreement An agreement to allow trade union access to the HS2 Old Oak Common construction site has been signed yesterday (Tuesday 23 April) between joint venture company Balfour Beatty, Vinca, SYSTRA (BBVS) and Unite. The agreement secures the
FPA Commercial Director Chris Miles considers the compliance of construction products and the impact the Grenfell Tower Inquiry Phase 2 report will have on this sector In the first article in this series, entitled ‘Inquiry Phase 2 Response – Time for change’, Dr Gavin Dunn takes a wide view of the content and implications of the Grenfell Tower Inquiry Phase 2 report. It is worth (re)reading to enable the following article to be contextualised. One of the key areas that the Inquiry Phase 2 report looks at in some depth is that of the compliance of construction products and systems and how the process can be improved, noting that using relevant, robust standards is essential. This article will look at the current process, some of the issues identified in the report and progress made in improving it, and will then examine ways in which the recommendations made in the Phase 2 report can be implemented. There are multiple elements to the compliance of products and systems, including how the process is governed and regulated, and the report includes a number of recommendations related to this. Some of the elements forming the recommendations in the report include: Current compliance If we look at the various routes to compliance that are currently available to the construction product industry we find multiple options – e.g. testing by the manufacturer/supplier, independent testing by a third party, sampling of products from the market (surveillance), and third party product certification. Whilst the third-party product certification route is often seen as the highest current level, there are variations between the providers offering various qualities such as user-friendliness, locality, project/market needs, costs, and turnaround time. However, the Inquiry report showed that too often the need for quality and thoroughness were a lower consideration when selecting which option was to be used. Analysis of the lead up to the Grenfell Tower fire by the Inquiry showed that examples of poor practice in the compliance processes led to inappropriate products, critical to the safety performance of the system, ended up on the building, namely the use of aluminium composite material (ACM) cladding. The Inquiry report states that: “The choice of combustible materials for the cladding of Grenfell Tower resulted from a series of errors caused by the incompetence of the organisations and individuals involved in the refurbishment… “Everyone involved in the choice of the materials to be used in the external wall thought that responsibility for their suitability and safety lay with someone else.” These issues can be shown to stem from a weak governance of the system that the testing laboratories and certification bodies operated under. This demonstrates that the governance of the compliance process is critical to an effective system. Applying recommendations The Inquiry report provides a clear recommendation that the construction regulator should be responsible for assessing the conformity of construction products with the requirements of legislation, statutory guidance, and industry standards. The regulator would then, perhaps, issue certificates to cover products, as appropriate, with a proposal that these certificates would become pre-eminent in the market. This would, in effect, create a new independent authority to regulate construction product safety (see figure 1), and whoever takes on this task must ensure there are clear responsibilities on product manufacturers and must also set out the consequences of acting outside the required system. To give this system real teeth, it must have the ability to set statutory liabilities and be able to enforce them through criminal proceedings if necessary. To improve the system overall it is important to have this recourse to legal action if a company or individual does not follow the proscribed system. If a serious mechanical failure occurred on an aeroplane, there would be a thorough investigation as a matter of course, and where fault was found there would be statutory implications. However, currently none of that happens routinely with construction products. This needs to change and it will need government and legislative support as part of their response to the Inquiry report recommendations. It should be noted however, that taking on the role of construction products regulator is a huge task and one which should not be undertaken lightly by any organisation, even by government. There are hundreds of certificates produced each month by the various current certification bodies and, as a response to the events at Grenfell and the subsequent Hackitt report, these numbers have grown significantly in the past seven years as the authorities started asking for more proof of compliance. To replace and/or replicate this through a newly founded construction products regulator will be a major undertaking requiring significant investment. If government decide that this is the way forward they wish to take, they will need to ensure this new body has access to sufficient numbers of competent staff in an area where we are all aware of the current lack of this type of resource. Therefore to rush into this could be a major mis-step and cause delay and confusion at a time when the construction sector as a whole is looking for clarity after the Inquiry report’s publication. The Inquiry Phase 2 report recommendations under section 113.23 are: Looking at each of these points individually highlights the difficulties faced when trying to implement a system to meet these recommendations. Recommendation 113.23a recommends that copies of all test reports supporting any certificate issued by the construction regulator are included, however product manufacturers will often go through numerous test cycles during the R&D process of a product or system. Many of these test reports do not represent the final product and are used to prove variations in the design. This will result in a large number of failed results showing on the certificate for prototypes that may bear little resemblance to the final product to be sold on the market. If these R&D results are included in a certificate they could be a red herring, confusing potential product users as to the ultimate safety of a product or system. This may in
WTW, a leading global advisory, broking and solutions company today announced a partnership between its Affinity Insurance business and Kayna, the award-winning insurance infrastructure platform. The partnership has been developed to enable delivery of innovative WTW insurance solutions to SME clients in the UK and US through Vertical Software-as-a-Service (‘vSaaS’) platforms. Vertical SaaS platforms provide types of software solutions which are created for specific industries and the partnership between WTW and Kayna intends to provide full program administration for US and UK-based industry-specific platforms in the construction, legal, salon/spa, fitness and field service sectors, distributing tailored insurance solutions. Specialist WTW teams in the UK and US will lead the product development and broker all insurance offerings as the company affirms its primary focus to delivering next generation distribution for the fast-growing Affinity Insurance sector. The partnership between WTW Affinity and Kayna will enable WTW to distribute property, general liability, workers’ compensation, commercial auto and umbrella liability insurance solutions to industry-specific vSaaS platforms. The partnership aims to drive top-line growth for vSaaS platform providers by leveraging platform data to serve relevant, tailored insurance through a streamlined process direct to the customer base that use such platforms to run their day-to-day business operations. “This is Affinity Insurance 2.0”, said Paul Lubbers, Head of Affinity and Programs US at WTW. “Insurance at your fingertips, forms derived from the actual key data that informs insurance metrics, and a facilitated process that goes beyond the policy purchase to trigger alerts if coverage level needs to be updated to mitigate risk. Both WTW and Kayna are playing to our respective strengths in delivering a world-class solution that is set to play a pivotal role in our consumer and commercial programs across the US.” Anthony Borgman, Head of Affinity GB at WTW concluded, “WTW Affinity have been able to add our unique value and expertise to the delivery of a data-led, end-to-end insurance service to not only deliver value but provide greater confidence to SME’s seeking appropriate levels of protection. I am delighted to see our UK Affinity capabilities expand in this exciting way and to have this opportunity to build on our partnership for the long-term.” Commenting on the partnership, Paul Prendergast, CEO and Kayna co-founder, said, “This is all about driving lots of new types of data-led, automated, simplified insurance business, tapping into huge distribution opportunities and doing all the heavy lifting for vSaaS platforms and their customers. WTW powered by Kayna will be providing trusted full service, tailored insurance solutions direct to SMEs via platforms whose core business is not insurance but whose rich, curated SME data is the critical success factor in ensuring right-sized insurance cover.” Key aspects of the partnership include: ● Kayna technology empowers WTW-brokered products on any vSaaS platform. ● Kayna deploys low-code end-to-end orchestration layer. ● Kayna technology enables WTW insurance distribution and the ability for platform customers to engage with indicative quotes, pre-filled applications, and policy generation. ● vSaaS platform leverages its data via Kayna technology to provide relevant, right-sized policy offers for SME customers. ● Kayna technology allows WTW to provide real-time alerts on coverage exposure based on dynamic business changes across the life-time of the policy. ● vSaaS SME customers can manage their insurance policy portfolios with full access on the WTW platform to: Insurance documentation, certificate of Insurance and general account information – fees paid, renewal dates, claims status. ● vSaaS platform has oversight on activity via a comprehensive admin portal. Building, Design & Construction Magazine | The Choice of Industry Professionals
Yesterday’s publication of the final report of the Grenfell Tower Inquiry is a long-awaited milestone in the response to the tragic loss of 72 lives in June 2017. It is another difficult and traumatic moment for the bereaved, the survivors and relatives of the Grenfell Tower victims and the Construction Industry Council (CIC) recognises once again all that they have suffered and we extend our sympathy once more to all the victims. Sir Martin Moore Bick has made many recommendations for further action in the report, based on a careful analysis of the evidence presented to the Inquiry by hundreds of witnesses and in hundreds of thousands of documents. CIC and its member organisations are now reviewing the full report and its recommendations and carefully considering the further actions that we will need to take. Whilst much work has already been done through the independent review of building regulations and fire safety undertaken by Dame Judith Hackitt and the consequent programme of regulatory reform that has been introduced and which the industry is working hard to implement, Sir Martin has clearly identified several further matters that require attention and CIC will be working with its members, the wider industry and government to develop appropriate responses to those matters, ensuring that they are given the critical and expedient attention that they demand. It will take time to give the thought and consideration that the report requires and for the action that is needed to address the various recommendations Sir Martin has brought forward. It is essential that government and the construction sector recognise the findings he has reported and that we learn the lessons and continue to respond to create an industry and a culture where safety, competence and compliance with the law is an absolute priority. Only then will public trust in the sector be restored. CIC believes that every construction professional should fully familiarise themselves with the report and its recommendations, and we will work closely with our members to facilitate this process as we develop an appropriate detailed response to the report. Building, Design & Construction Magazine | The Choice of Industry Professionals
Hire Association Europe & Event Hire Association (HAE EHA) has announced that it is developing a new Theft & Fraud Reporting Portal as it calls for vigilance ahead of the August Bank Holiday, a time typically rife with criminal activity against the construction sector. The portal could support the recovery of almost £3m worth of equipment within the year*. Working in conjunction with the National Construction & Agricultural Theft Team (NCATT) and The Official Construction and Agricultural Equipment Security & Registration Scheme (CESAR) the new Theft & Fraud Reporting Portal will be aimed at HAE EHA members. They will be able to effectively share information on incidents with each other and specialist policing teams, enabling HAE EHA members to better safeguard their businesses against the rising threat of crime. Construction and agricultural machinery theft has increased by 200 per cent since February 20221, with global events, like the war in Ukraine, driving up demand for stolen goods of this type. With Bank Holidays typically rife with crimes of this sort, as businesses close up shop for longer periods, making them prime targets for criminals, the hire industry is disproportionately impacted. At the same time, the equipment hire sector is experiencing a huge spike in fraudulent hires. The collaborative initiative, which HAE is supporting with a significant investment over a three-year commitment, is made up of businesses, police and industry bodies, to tackle the growing crime rates against industry. A report, published by NCATT and CESAR, revealed that the total value of tools and equipment recovered from the sector in just the first quarter of this year was almost £700k. The report also shared that 32 arrests had been made and 127 items recovered in Q1 2024, with some as far afield as Romania and Italy. It also revealed that Essex was a prime target area for these crimes, with the regional police force being supported by CESAR and NCATT in 12 cases in Q1 2024. This is followed by Kent (eight cases), and Lancashire, Leicestershire, Northamptonshire and South Yorkshire forces being supported six times each in the same period. Mark Bradshaw, public affairs manager at HAE EHA, said: “The rising crime rates against businesses in the hire sector is very worrying but the progress that the CESAR and NCATT teams have made is truly commendable and we are very proud at HAE to be part of this drive to combat crime affecting hire companies. “Ensuring that we can gather as much information as possible about these crimes and work collaboratively across industry and the police is key to tackling this wave of organised crime against our hire sector. That’s why we are creating the Theft & Fraud Reporting Portal for our members to ensure that they have a way of getting this information directly to the policing teams that can help, as well as sharing their experience with other members, something which could help someone else to reduce their risk and keep their team and business safe. “As the August Bank Holiday approaches, this will undoubtedly be an anxious time for those in the hire sector as a long weekend. I urge all these businesses to ensure that security procedures are followed, and that staff are fully briefed on how to make the sites as safe as possible. If incidents do occur, please do report them, both to the police and to us, the information will go directly into supporting the activity of the CESAR and NCATT teams.” Superintendent Andy Huddleston, head of the NCATT and head of the National Rural Crime Unit, said: “NCATT finished its first year of operation with over £6 million in seizures of stolen machinery from criminals. This is as much an indication of the scale of the threat we face as well as well as a measure of the success of NCATT. The high level of seizures and recoveries has continued throughout 2024 and crucially we are seeing more arrests and, with the support of the CESAR donor board including HAE funding support, the team now have a financial investigation capability. “The Hire Association Europe’s three-year funding commitment to help fight plant equipment theft and fraud is absolutely crucial to us continuing this work and targeting construction machinery thieves. Having this specialist team of police officers that cover the whole of the country not only identifying stolen equipment but also coordinating forces and pushing legislative changes is making a difference in tackling organised criminal groups that target HAE members. We are a small unit and whilst we can’t support every theft investigation, what we are able to do is make a tangible difference and I thank the industry for its crucial support in helping us do this.” HAE EHA is a Birmingham-based industry-leading trade association for the plant, tool, equipment and event hire sectors with membership representing businesses from new startups to some of Europe’s largest hire companies. It has over 700 member companies based in the UK, Europe and across other parts of the world. Building, Design & Construction Magazine | The Choice of Industry Professionals
Deposit alternative specialists flatfair have announced a bumper month with Build To Rent (BTR) sector landlords. And CEO Gary Wright says that smaller, private landlords should follow the lead of the corporate providers in choosing the additional protection offered by their No Deposit scheme. He said: “Understandably, landlords feel they are living in uncertain times. Local authority licensing is on the increase and the Renters Rights Bill is just around the corner. “It’s not surprising that the bigger providers are looking at the rental landscape and seeking out as much protection as they can for their investments.” July was a record month for No Deposit plans from flatfair’s BTR partners with 80% more plans sold than the same month last year. Their deposit alternative option is offered at approximately 77% of live BTR units and their customers include many of the most respected names in the industry, such as Greystar, Native Residential and urbanbubble. Wright explained that flatfair offers free protection of up to 10 weeks’ worth of damages and/or rent arrears for landlords and if the amount owed exceeds this, flatfair pays the landlords upfront while recovering the debts themselves. Fully recovered “With the extra protection offered with our deposit alternative, there can be a misconception that it costs landlords money. But it is completely free for both agents and landlords and they unlock double the amount of protection in the event of damage to property or rent arrears at the end of the tenancy. “There can also be a mistaken belief that deposit alternatives attract a poorer quality of tenant but in our case, the vast majority of No Deposit tenancies have closed without charges or they have been settled in full by the tenant. “The remainder have set up repayment plans for the money to be fully recovered on behalf of the landlord. “A month on after the election, we can clearly see the direction of travel – that is very tenant-focused – landlords will be bound to be feeling pressure. “The BTR sector – as a group of very large landlords – are absolutely committed to this product and see the value of it and we firmly believe that agents and smaller landlords would feel the benefit if they followed suit. They are the lifeblood of the Private Rented Sector (PRS) and they should feel that their businesses are safe and secure.” Wright recounted the story of an agent client who also let their own property with No Deposit: “Their tenants’ charges exceeded 10 weeks’ worth of damages and unpaid rent. In this particular case, they received 5 weeks’ worth of rent plus additional payment for redecoration, cleaning and repairs – full recovery. They said they were paid more than they would have received through a traditional deposit scheme and it saved them a lot of hassle chasing down the debt. “The bigger BTR players have already realised this and there is no reason why private landlords should miss out.” Building, Design & Construction Magazine | The Choice of Industry Professionals
Underinsurance is a persistent problem that leaves property owners vulnerable to significant losses, often caused by something as simple as an outdated reinstatement value. To address the growing issue of underinsurance head-on, the Building Cost Information Service (BCIS), which has more than 60 years’ experience in collating and analysing construction costs, has partnered with risk management firm Intelligent AI to provide a service that produces reinstatement cost assessments at the touch of a button. The BCIS Intelligent Rebuild Cost Platform draws from multiple data sources to create rebuild cost reports for residential and commercial properties, including BCIS reinstatement data, planning applications and satellite imagery. Crucially the platform can report on everything from individual residential properties to multi-billion-pound commercial portfolios, enabling annual assessments where previously a rolling-check every three or four years might have been all that was possible. James Fiske, BCIS CEO, said: “We help property professionals to not only access high-quality data, but to understand the most appropriate data for them. Sadly it’s not uncommon to find unreliable sources of data being used to inform sometimes major business decisions. “This could be a property owner simply using market valuations for declared reinstatement values, or using inappropriate indices, like general inflation, to estimate movement in rebuild costs. In some larger organisations, there can be issues with data management where figures have been passed between teams, have come through an acquisition, or nobody is quite sure what the original source is. “The use of problematic data is of course not limited to reinstatement values, but the financial risk in this area could be the most significant one a property owner or portfolio manager has, if they are exposed to considerable loss through underinsurance. On the flip side, having a clearer view of the rebuild costs also helps to avoid overinsurance, and overpaying on a policy.” BCIS polled more than 200 professionals, predominantly from surveying and insurance roles, and asked what factors they thought contributed most to incorrect reinstatement valuations. More than one-third (36%) said a lack of regular re-evaluations, 24% said changes in construction costs, and 20% said inaccurate initial assessments. Fiske said: “We know policyholders want to be adequately covered, but annual site visits for a whole portfolio may be unfeasible. From portfolio managers using IRCP to perform an immediate risk assessment to surveyors using pre-populated assessments as a starting point, the intention is to improve efficiencies, save time, and reduce risk for everyone in the process.” Using reliable, verified data is crucial to reducing instances of underinsurance and is the driving principle at the heart of the platform. BCIS reinstatement data alone constitutes more than 1,100 dwelling models and 650 ancillary models, representing a wide range of supporting structures, components, and features. These models are built upon input costs derived from upwards of 12,500 regularly updated supply prices, as well as labour, plant, and specialist rates, in total producing more than four million rebuilding cost permutations. Estimates of the prevalence of underinsurance in residential and commercial policies vary, but with the onus on professionals to ensure they have done everything they can to minimise risk, it represents an area of huge concern. In the BCIS poll of professionals, the majority said they encounter underinsurance issues related to reinstatement valuations either frequently (29%) or occasionally (30%). Less than one-quarter (22%) said they rarely did, and just 13% said never. A recent survey commissioned by Aviva[1] found 73% of brokers are worried that some of their clients may be underinsured and they ranked underinsurance second on a list of market challenges they are concerned about. Intelligent AI CEO Anthony Peake said another key aim of the platform, which has been developed using groundbreaking AI tools, together with support from Lloyd’s Lab and leading insurers, is to provide the industry with the tools necessary to communicate the importance of reliable and regular assessments. He said: “We’re essentially trying to avert disaster. Whether that’s a residential property where a few hundred pounds difference in the premium could save the customer potentially missing out on hundreds of thousands of pounds in a payout, or a commercial portfolio where the declared value is upwards of a billion, it’s about safeguarding people’s homes and livelihoods should the worst happen. “In a recent test we did with an insurer, analysing a portfolio of 355 commercial properties, we found the reinstatement value to be £1.17bn underinsured. “In the poll, the top three barriers to customers updating their coverage to avoid underinsurance were cost considerations, lack of understanding and lack of awareness. Policyholders need to understand the potential consequences and what they can do about it.” Underinsurance is not a new issue, but it has been exacerbated in recent years by rampant inflation, which particularly impacted construction materials prices. Annual growth in the ABI/BCIS House Rebuilding Cost Index peaked at 19.4% at the end of 2022, representing a significant hike in the costs associated with rebuilding a property. The vast majority of professionals polled said rising construction costs have had either a significant (71%) or moderate (24%) impact on their customers or clients in the last two years. Cos Kamasho, BCIS Asset Data Manager, said: “Although inflation has cooled, and we’re not seeing those massive spikes now, there are still lots of external influences that can push up costs. “Annual growth in the BCIS Labour Cost Index, which tracks movement in trade wage agreements, for example, is at a 20-year high, and there are widely reported skills shortages in the industry. Changes to building regulations can also greatly impact rebuild values as properties have to be rebuilt to the current standard, not what was in place when the property was first built. “Inflation coming down doesn’t necessarily mean prices have come down. The cost of many materials in construction remain at historic highs, so using an up-to-date data source is vital.” To find out more about the BCIS Intelligent Rebuild Cost Platform please visit: https://bcis.co.uk/product/bcis-ircp/ For more information about BCIS, please visit: www.bcis.co.uk and for more information on
A challenge to a telecommunications infrastructure provider’s proposal to renew a lease at a much reduced rent under the Electronic Communications Code has resulted in a key ruling by the Scottish Lands Tribunal which will have ramifications across the industry. In order to renew a lease under the Code, an operator must be a party to a Code agreement with the other party. In the case of On Tower UK Limited (“OTUK”) v the Church of Scotland General Trustees, the tenant of the radio mast installation in Kay Park Parish Church in Kilmarnock was Orange Personal Communications Services Limited (“Orange”). The lease was later assigned by Orange to EE Limited and Hutchison 3G UK Limited (“EE & H3G”) whose equipment is understood to be on site. The lease was then assigned to Arqiva Limited, then to OTUK (at the time called Arqiva Services Limited). The lease placed certain restrictions on any assignation and the landlord was not told of the assignation. OTUK served notice to renew the lease on its standard terms at a rent of £3,000, considerably lower than the contracted amount. The Scottish Lands Tribunal found OTUK was not a party to a Code agreement when it served the paragraph 33(1) notice to change the agreement, meaning the notice was invalid; thus the ensuing application was similarly invalid. It is understood some 700 agreements were assigned from operators to Arqiva around 2015. In 2019 the Arqiva group sold its telecoms infrastructure and related assets at an enterprise value of £2 billion to Cellnex, which later became OTUK. The transaction comprised some 7,400 of Arqiva’s cellular sites, including masts and towers as well as urban rooftop sites, and the right to market a further 900 sites across the UK retained by Arqiva. The sites retained by Arqiva incorporated its broadcast infrastructure and its interests in machine-to-machine data services, which provide smart meter networks for the utilities sector. Ian Thornton-Kemsley, a telecoms expert at Galbraith, said: “Over the years operators have transferred sites between themselves apparently without properly considering the lease requirements; the case illustrates this. Despite the wording of the Code, operators are not prepared to justify the changes sought to the existing lease; and they readily apply to the Tribunals to impose agreements if landowners do not agree to their terms, which are often heavily weighted in their favour. This appears to have been the case at Kay Park. “It is important to check that the renewal notices are valid and to adhere to the requirements of the Code. By successfully challenging the basis of the notice, the landowner has protected its income for the time being – important to a charity such as the Church.” Mike Reid, Head of Utilities and a telecoms specialist at Galbraith, added: “Operators tend to weaponise their rights under the Code, using the threat of costs in legal proceedings to obtain settlements in their favour. The Kay Park decision, together with the Vache Farm case, is a welcome redressing of the balance, ensuring landowner’s rights are properly protected.” The Kay Park Scottish Lands Tribunal decision can be found at – http://www.lands-tribunal-scotland.org.uk/decisions/LTS.ECC.2023.57.html The Vache Farm case can be found at be found at – LC-2020-55 final_.pdf (tribunals.gov.uk). Building, Design & Construction Magazine | The Choice of Industry Professionals
By Matt Clark, Managing Director, Cardium Law As a legal firm specialising in the construction sector, we are seeing an alarming rise in insolvencies and statutory demands linked to unpaid loans, breaches of facility agreements, personal guarantees, unpaid invoices and adjudications. This trend is not merely a reflection of current economic challenges but is also deeply intertwined with the lingering effects of the pandemic and the fallout from other global events. Bad reverberations Aftershocks from the Covid-19 pandemic have continued to ripple through the construction industry. Many businesses that managed to survive the initial lockdown and subsequent disruptions are now finding it difficult to stay afloat in the face of higher finance costs, labour costs, and the cost of construction materials. One poignant example are developers that used bridging loans to fund planning and acquire development land only to find that the rising construction and finance costs make the development unviable. Such developers are left with costly loans that are unaffordable and land that is undevelopable. Another is a client which operated a leisure centre and managed to sustain it through the pandemic’s peak, only to succumb to recent insolvency. To make matters worse, the industry is also seeing a surge in fraud involving misuse of loan funds and unmeritorious pre-action protocol claims targeting vulnerable individuals or businesses designed to destroy either creditworthiness or business reputation. This case underscores a broader trend. Many businesses are still grappling with the delayed financial repercussions of the pandemic three years later, as they struggle to survive in a tough market, weighed down by strains on profits and cashflow from the original Covid outbreak. Economic pressures Current economic conditions have exacerbated the struggles of the construction sector. High inflation rates have driven up costs for materials, labour and equipment. This surge in expenses is straining the budgets of construction projects across the board, from small-scale developments to large infrastructure projects. A recent CHAS report highlighted how these economic pressures have led to a significant downturn in the housing sector, particularly in new private housing work. This not only affects construction companies but also reverberates through the supply chain, impacting suppliers, contractors and ultimately clients. The construction industry is now at a critical juncture, trying to balance escalating costs while maintaining profitability. These financial strains are contributing to an increase in legal disputes, as companies find themselves unable to honour contracts and pay for services rendered. Labour shortages The financial pressures on the construction industry are exacerbated by significant labour shortages and a widening skills gap. This issue has been intensified by Brexit, which has reduced the availability of skilled workers from the EU, and an ageing workforce, which is leading to higher retirement rates. Government efforts to address these shortages include adding construction occupations to the Shortage Occupation List and increasing investments in apprenticeships and training programmes. The effectiveness of these measures remains to be fully seen. The lack of skilled labour not only drives up wages but also delays project timelines, adding another layer of financial strain to already overburdened companies. As projects become more costly and prolonged, the risk of insolvency increases, further contributing to the rising caseload of legal disputes. Rising caseload Our firm has seen a marked increase in the number of insolvencies and statutory demands related to unpaid loans, breaches of facility agreements, personal guarantees, unpaid invoices, and adjudications. Professional failures have also contributed to, or caused, failed developments. Businesses across the construction sector are facing cashflow challenges, making it difficult to meet their financial obligations. This situation often leads to the appointment of administrators or LPA Receivers shifting control over assets to lenders and, all too often, insolvency proceedings. Insolvencies in the construction sector not only affect the companies directly involved but also have a cascading effect on the wider economy. Subcontractors suppliers, and employees all feel the impact of a company’s financial distress, leading to further legal disputes and economic instability. Looking ahead As we navigate these troubled waters, we remain committed to supporting our clients through legal challenges arising from the current economic climate. We offer expert guidance on managing insolvencies, negotiating settlements, defeating unmeritorious claims, and reinstating assets where there have been professional failures. Our goal is to help clients navigate the legal complexities of the construction sector, ensuring they can focus on sustaining, protecting, and growing their businesses. The construction industry is undoubtedly facing significant challenges, but with the right legal support and strategic planning, companies can overcome these hurdles. Building, Design & Construction Magazine | The Choice of Industry Professionals
A petition with over 3700 signatures has been handed to Shropshire Council as Albrighton Village Action Group (AVAG) steps up its campaign to protect over 50 hectares of beautiful green belt. Mark Pritchard, MP for The Wrekin, joined concerned residents at The Shirehall to reinforce calls for Boningale Homes’ plans to build 800 homes and change crucial road infrastructure to be rejected. Members of AVAG have said that nearly 83% of the Shropshire village’s eligible population has backed the petition, highlighting the overwhelming anger at the speculative overdevelopment. The campaign group, which is made up of local volunteers, is now urging local people to turn signatures into official objections via the Shropshire Council planning website (https://pa.shropshire.gov.uk/online-applications/) – with 194 already lodged ahead of the current August 8th deadline. To make things as easy as possible, AVAG has created two video guides (available on www.albightongreenbelt.co.uk) on how to register an objection and compiled nearly 40 key reasons why the overdevelopment should not take place and how it will change the village forever. It is also hosting eight-drop-in sessions at the Red House, Melville Club and Scout Den, where volunteers will be available in person to help villagers go through the objection process. “The campaign to protect our green belt really starts now and we are urging people who are opposed to Boningale Homes’ plans to strongly object – this is one of the best ways for us to win,” explained Charlie Blakemore, co-chair of the Albrighton Village Action Group. “You can see the overwhelming feeling from local residents, with over 3700 signing the petition asking the council to reject this unneeded overdevelopment. There have also been 194 objections to the planning application already and this is growing daily. We are delighted to present this petition to Shropshire Council today on behalf of the village.” He continued: “Our group supports appropriate development, and we have 771 new homes being built as part of the Local Plan that we support – that’s more than our fair share and will help support Labour’s housing push. “Our village’s infrastructure, roads and amenities will not cope with another 800 houses. Location and scale of this speculative proposal is just not right. “AVAG was also delighted that all general election candidates – across the complete political spectrum – recognised this and said they would object to the plans.” Albrighton Village Action Group believes the Boningale Homes plan is just an attempt to make a quick profit on large swathes of green belt, a lot of which is currently being used for productive farming. It will turn the village, referred to as the home of the English rose, into a town and put even more pressure on stretched infrastructure, including doctor’s surgery, roads and the train station. Talk of economic benefit is misguided as the distance between the development and the high street could have a detrimental impact to independent retailers, whilst a new school is not needed and will just make other established nearby schools unviable. Mark Pritchard, MP for The Wrekin, added his support: “I want to reiterate my support for the green belt and in protecting Albrighton against the overdevelopment proposed by Boningale Homes. “My objection to this speculative green belt grab, which has little thought of how it may affect the village, has already been lodged and I will work with AVAG to fight these proposals.” Charlie concluded: “The deadline for objecting is getting closer. We must translate this strong feeling into official objections and by donating to our fundraising campaign. This will cover the fees of the legal and planning specialists we are using to help fight these proposals and the green belt grab. “It is important that our group and local residents fight greedy developers to ensure that future generations have rural villages and green spaces to live in and enjoy. There are so many brownfield sites that lie decaying that are in desperate need of development, and this is where the focus should be and not on permanently destroying beautiful countryside. “We have the chance to be on the right side of history and protect our village for generations to come.” Building, Design & Construction Magazine | The Choice of Industry Professionals
Agreement with BBVS leaves SCS only joint HS2 venture without union access agreement An agreement to allow trade union access to the HS2 Old Oak Common construction site has been signed yesterday (Tuesday 23 April) between joint venture company Balfour Beatty, Vinca, SYSTRA (BBVS) and Unite. The agreement secures the right of Unite representatives to visit the project’s inductions. It also allows Unite representatives access to rest facilities to talk to all the workers on the site during their breaks, in order to deal with any concerns or worries they may have. It was signed after a ‘relentless’ two-year campaign by Unite, which included regular demonstrations, leafletting workers and resolving their concerns. Unite general secretary Sharon Graham said: “This agreement is the culmination of two years of relentless campaigning by Unite to gain formal access to the Old Oak Common site. Construction workers can now speak directly to Unite about all employment and safety concerns. “Unite is now in a stronger position to help defend and improve jobs, pay and conditions for HS2 workers at Old Oak Common.” Unite now has site access agreements with four out of five of the joint venture companies working on HS2: BBVS, Align, EKFB and Mace/Dragados. The only joint venture company to remain without a site access agreement is Skanska, Costain, Strabag (SCS), which is responsible for the project’s London tunnels. Unite regional officer Declan Murphy said: “Agreeing trade union site access should be a matter of course for all construction contractors. But the successful campaign to achieve the agreement with BBVS shows that Unite will overcome any obstacle put in its way to ensure workers are not denied union access. Unite will now be turning its complete attention to securing a site access agreement for SCS workers.” Building, Design & Construction Magazine | The Choice of Industry Professionals
