Planning and development club providing a construction law update, an overview of the housing white paper and advice on wayleaves, easements and substation transfers.

1. Planning and development club
May 2017, Nottingham

2. Construction Law Update
Martin Cannon

3. Two Parts
Case Law Update
Standard Form Contracts

4. Contract formation, interpretation
and rectification
– MacInnes v Gross [2017] EWHC 46 (QB)
“A contract is always best in writing”
– Irish Bank Resolution Corp Ltd (In Special Liquidation) v Camden Market
Holdings Corp [2017] EWCA Civ 7
“If you want to imply a term it must not conflict with an
express term”
– McGee Group Ltd v Galliford Try Building Ltd [2017] EWHC 87 (TCC)
“Be careful with a cap on liability”
– Borough of Milton Keynes v Viridor (Community Recycling MK) Ltd [2017]
EWHC 239 (TCC)
“If an error in a contract is manifest it will be corrected”

5. Professional Appointments
- BPE Solicitors v Hughes-Holland [2017] UKSC 21
“Solicitors don’t underwrite deals they advise unless the
appointment says so”
- Signature Realty Ltd v Fortis Developments Ltd [2016]
EWHC 3583 (Ch)

6. Calculating extensions of time
Carillion Construction Ltd v Emcor Engineering Services
Ltd [2017] EWCA Civ 65
“Common Sense on calculating extensions of time”

7. Payment under the Construction
Act 1996
- Surrey and Sussex Healthcare NHS Trust v Logan
Construction (South East) Ltd [2017] EWHC 17 (TCC)
“What constitutes a payment notice”
- Trilogy Services Scotland Ltd v Windsor
Residential [2017] SAC (Civ) 2
“Payment notices may be different in Scotland”

8. Adjudication
- Bell Building Projects Ltd v Arnold Clark Automobiles Ltd
“Behave yourself if you want to claim unfairness”
- Hutton Construction Ltd v Wilson Properties (London) Ltd [2017]
EWHC 517 (TCC)
“A clear statement that Adjudicators decisions will be
enforced”
- Kersfield Developments (Bridge Road) Ltd v Bray and Slaughter
Ltd [2017] EWHC 15 (TCC)
“Another adjudicators decision enforced and no stay of
enforcement was given”

9. Adjudication
- Mailbox (Birmingham) Ltd v Galliford Try Construction Ltd [2017]
EWHC 67 (TCC)
“Can you adjudicate on an assigned contract?”
- NKT Cables A/S v SP Power Systems Ltd [2017] CSOH 38
“Clarifying the slip rule”
- South Coast Construction Ltd v Iverson Road Ltd [2017] EWHC 61
(TCC)
“when is a statutory moratorium not a moratorium”

10. Mediation and costs
Thakkar v Patel [2017] EWCA Civ 117
Arbitration and Fraud
Celtic Bioenergy Ltd v Knowles Ltd [2017] EWHC 472
(TCC)

11. Standard Form Contracts

12. JCT Contracts 2016
• Summer 2016 – release of the first major update to
JCT Contracts since 2011
• Publication throughout the first half of 2017
• “Tracked changes” versions
• JCT has issued a publication which outlines the
principal changes from the previous 2011 editions…

13. Common Themes
• There are a number of amendments made by JCT which are common
throughout some/all of the published suites
 New Definitions
 New Definition of Consent
 Incorporation of Amendment 1 CDM Regulations 2015
 Payment (and Loss and Expense under the D&B and SBC)
 Insurance
 Performance Bonds, PCGs, Third Party Rights and Collateral Warranties
 Termination
 Incorporation of Public Sector Supplement 2011 provisions / Reflective of Public Contracts
Regulation 2015 (S1 2015/102) for use on public sector projects

14. Consents
To reduce repetition throughout the contracts a new
clause in relation to consent has been introduced
• “where consent or approval of either Party is expressly required under these
Conditions and is requested, such consent or approval shall not unreasonably
delayed or withheld”.
• The exception is in relation to consent to assign the contract or the rights
thereunder in which it is at the sole discretion of the relevant party
Relevant clauses
• Clause 1.7 Minor Works 2016
• Clause 1.10 Design and Build 2016
• Clause 1.11 Standard Building Contract 2016
• Clause 1.11 Intermediate Building Contract 2016

15. CDM Regulations 2015
Amendment 1 introduced in 2015 is now incorporated
• The CDM Coordinator is replaced with the Principal Designer in
Article 5 with the corresponding footnote amended.
• CDM Planning Period and its corresponding footnote are deleted
• Definition of the CDM Regulations and Construction Phase Plan are
amended
• Changes have been made to Section 2 to reflect the changes set
out in Amendment 1
• Section 3 Control of the Works – introduction of a CDM Regulations
clause

16. Payment
The changes introduced simplify the payment provision and represent
a change in approach rather than any real change in substance
Changes
• Simplified the drafting that refers to various items that may adjust the contract
sum
• Valuation and Payment dates simplified
• Consolidated provisions containing notice requirements
• Fluctuations clauses amended
• New procedure for ascertaining loss and expense
• Introduction of an Interim Valuation Date in the Contract Particulars which is the
same date throughout the Main Contract and any Sub-Contracts.

17. Loss and Expense
New procedure for the prompt assessment of loss and expense within
a specific time period
Contractor
• Notify the Employer of the likely effect on progress or the likely nature and extent of any loss
and/or expense as soon as it becomes ( or should have become) reasonably apparent to the
Contractor
• Provide at the same time, or as soon as reasonably practicable, its initial assessment of the loss
and/or expense incurred and any further amounts likely to be incurred, together with such
information as is reasonably necessary to enable the Employer to ascertain the amount; and
• Provide monthly updates until all information that is reasonably necessary to allow the
Employer to finally ascertain the total amount of the loss and expense incurred has been
supplied
Employer
• Notify the Contractor of the ascertained amount within 28 days of receipt of the initial
assessment and information and within 14 days of each subsequent date

18. Injury, Damage and Insurance
Insurance
• In cases where a tenant is carrying out works in an existing property which is
insured by the landlord, compliance with the requirement of the previous JCT
Option C arrangement was difficult to obtain.
Design and Build, Standard and Intermediate contracts
• The substantive change to the insurance option C is the introduction of the C.1
Replacement Schedule which is to suit parties particular insurance requirements
and offer them greater flexibility. The way in which it will work in practice will be
determined by the insurance market.
Minor Works Contract
• A new clause 5.4C has been introduced which advises all parties to take
appropriate specialist advice.
The JCT has also taken the opportunity to simplify and consolidate the insurance
provisions reflecting the change in approach.

19. Assignment, Performance Bonds &
Guarantees and Third Party Rights
Design and Build 2016, Standard and Intermediate Building Contracts
Number of Amendments made to Section 7
• New provision that obliges a Contractor to provide a performance bond and/or
parent company guarantee if the Contract Particulars require it to do so.
• Part 2 of the Contract Particulars of the 2011 edition has been replaced by Rights
Particulars and clause 7.4 reflects this change
• A standard definition of “Consultants” is introduced for the purpose of the net
contribution clause in the schedules of third party rights
• Clause 7E provides that as an alternative to providing collateral warranties,
subcontractors may be required to grant third party rights.

20. Association for Consultancy and
Engineering 2017
The Association for Consultancy and Engineering (ACE) has
now published the entire suite of its updated professional
appointments (the ACE Agreements 2017).
While the ACE had previously published its professional
services agreement and sub-consultancy agreement, some
schedules of services remained outstanding. These are
now available in hard copy and the entire suite will be
published in digital format shortly.

21. NEC4 suite due in June 2017
• New suite will be published in June 2017
• “an evolution on NEC3”
• NEC4 suite will:
– Include design and build options for the Engineering and
Construction Contract (ECC) and the Engineering and
Construction Subcontract (ECS).
– Provide for the finality of assessments at the end of a project.
• Accompanied by guidance notes and flowcharts
illustrating how the contractual mechanisms operate.

22. NEC4: Key new features
Revisions to the existing NEC3 suite include:
• New terminology
– The "Employer" will be the "Client" in all forms (save for the Supply Contract)
– The "Risk Register" will be the "Early Warning Register”
– "Works Information", "Service Information" and "Goods Information" all become
the "Scope".
• Contractor's proposals
– The Contractor as well as the Project Manager can propose positive changes
such as acceleration or a change to the Scope to improve the outcome of the
project
– A secondary option allows the Contractor to identify opportunities to change
the Scope which would reduce the cost of the asset over its whole life. If
accepted, the Contractor will share the cost savings.

23. NEC4: Key new features
• Consensual dispute resolution
– New procedure of escalation and negotiation of a dispute over a 4 week period
(mandatory where the HGCRA does not apply).
• Finality of assessments
– New procedures encourage checking and agreement of Defined Cost and
Disallowed Cost progressively as the work proceeds.
– After certain timescales, a correctly issued final assessment becomes
conclusive if not challenged by either party referring the issue to dispute
resolution within 4 weeks of issue.
• Payment provisions
– Periodic assessments now require an application by the Contractor – if no
application is made by the assessment date, the Contractor will not receive
payment.

24. NEC4: Key new features
New Core clauses and Secondary options:
- Core
1. Bribery and Corruption.
2. Confidentiality and Publicity.
3. Transfer of Benefit (Assignment).
- Secondary
1. Contractor's Design and Build Option (for ECC and ECS only).
2. Dispute Avoidance Board.
3. Collateral Warranties, known as "Undertaking to Others".
4. Early Contractor Involvement.
5. BIM.

25. Any Questions?
Martin Cannon - 0121 296 0710
martin.cannon@brownejacobson.com

26. Fixing our broken housing
market – The Housing White
Paper
Stephen Coult
May 2017

27. The 4 Main Chapters of the White
Paper
• Chapter 1: Planning for the right homes in the
right places
• Chapter 2: Building homes faster
• Chapter 3: Diversifying the market
• Chapter 4: Helping people now

28. Executive Summary - Key Points for
Private Developers
• Offer of planning framework which more supportive of higher
levels of development
• Encouraging modern methods of construction
• Encouraging more SME builders –Accelerated Construction
Programme and finance
• Expect
– Build more homes
– Engage with communities
– Focus on design and quality
– Build homes swiftly where permission granted.
– Develop careers in housebuilding

29. Drilling down into the detail

30. 1. Reform of Planning
• Changes to NPPF
• Increase in planning fees.
• CIL and S106 Reform

31. Changes to NPPF (1)
• Standardised approach to OAN
– Statement of Common Ground to supplement Duty to
Cooperate
• Support development of small windfall sites.
• 10% of allocated sites to be less than 0.5ha
• Encourage developers to subdivide large sites
• All sites to deliver minimum 10% Affordable Housing with
appropriate level of starter homes agreed at local level
• Requirement for neighbourhood plans to meet share of local
housing need
– Subject to delivery tests
– Question of status of land – site allocation or otherwise

32. Changes to NPPF (2)
• Starter Homes Proposals
– Income limits £80k /£90k London
– Requirement for mortgage
– 15 year discount repayment with tapering
– More brownfield land for starter homes
– Starter homes on rural exception sites (subject to
local connection tests)

33. Changes to NPPF (3)
• Green Belt only amended when other options fully
examined
– Use of brownfield
– Using surplus land
– Optimising density
– Co-operation with other authorities
• Impact offset following removal of land
• Expect local planning authorities to identify
opportunities for villages to thrive;

34. Changes to NPPF (4)
• When preparing plans authorities should have a clear
strategy to maximise the use of suitable land in their
area;
• Should make efficient use of land and avoid building
homes at low densities;
• Should address the particular scope for higher-density
housing in urban locations;
• Should indicate that great weight should be attached to
the value of using suitable brownfield land within
settlements for homes

35. Changes to NPPF (5)
• LPAs Should ensure that the density and form of
development reflect the character, accessibility
and infrastructure capacity of an area;
• Should take a flexible approach in adopting and
applying policy and guidance that could inhibit
these objectives;
• The Government will review the Nationally
Described Space Standard to ensure greater local
housing choice.

36. Changes to NPPF (6)
• encourage greater use of Local Development Orders and area-wide
design codes
• expect that local and neighbourhood plans and more detailed
development plan documents should set out clear design
expectations;
• strengthen the importance of early pre-application discussions;
• make clear that design should not be used as a valid reason to
object to development where it accords with clear design
expectations set out in statutory plans;
• recognise the value of using a widely accepted design standard.

37. CIL and S106
• Current system not fast, simple or transparent.
• Announcement in Autumn Budget 2017
• Continued exemption of self build whilst longer
term reforms explored.
• Scope for short term reform to S106
– Open Book
– Dispute Resolution process

38. 2. Encouraging Modern Methods
of Construction
• see up to 15,000 housing starts over the Parliament,
through building out public sector sites faster than
traditional disposal routes;
• catalyse changes in the wider housing market, through
supporting offsite manufacturing techniques and
increasing the number of participants in house-building;
and
• generate higher receipts for the taxpayer through
sharing risk and reward in the development of our land.

39. 3. Encouraging more SME
Builders
• Planning Reforms
• Home Building Fund – £1Bn short-term loan finance
targeted at SMEs, custom builders
• Accelerated Construction - partnerships with SME
builders
• Help to Buy offer to SMEs

40. Executive Summary – Key Points
for Local Authorities
• Local Leadership Vital
• Extra Money
• Action against land hoarding
• Ambition and innovation
• An up-to-date plan with communities meeting local
housing requirement
• Intervention where no progress.

41. 1. Leadership
• Heads Executive Summary
• Only a single reference – para 2.35 Chapter 2 -
Holding developers and local authorities to
account.

42. 2. More money (1)
• Boosting Local Authority Capacity
• Increase fees by 20% from July 2017
• Further increase of 20% for authorities delivering
homes communities need
• £25M for ambitious authorities in areas of high
housing need to plan for new homes and
infrastructure

43. More Money (2)
• But lots of recycling
– £8.6Bn Help to Buy
– £7.1Bn Public Housing
– £3Bn Home Building Fund
– £2.3Bn Housing Infrastructure Fund
– £1.2Bn Starter Homes Land Fund
– £1Bn Digital Infrastructure
– £800M Supported Units
– £45M Land Release Fund
– Unspecified funds for Neigbourhood Planning

44. 3.Action against land hoarding
• From para 2.36 onwards
• More data to be collected in relation to delivery
• Shorten planning permission times
• Use of completion notices
• Use of compulsory purchase powers to build out
stalled sites

45. 4. Ambition and Innovation
• Ambition referred to 9 times - Innovation referred to 17
times
• Hard detail in relation to application to Local
Authorities very limited:-
– Ambition referred to in para 3.33 regarding bespoke deals
in areas of high demand, particularly using HCA backing.
– Innovation referred to in Paras 3.27-3.30 “Backing local
authorites to build” and references to local development
corporations, local housing companies and/or joint
venture models as exemplars of innovation.

46. 5. Getting plans in place (1)
• Will ensure that every authority is covered by a plan,
but remove the expectation that they should be
covered by a single local plan;
• Will enable spatial development strategies, produced
by new combined authorities or elected Mayors, to
allocate strategic sites;
• Will improve the use of digital tools to make plans and
planning data more accessible.

47. 6. Intervention
The Government;
• Will, when necessary, intervene to ensure that plans
are put in place, so that communities in the areas
affected are not disadvantaged by unplanned growth.
• Will set out in regulations a requirement for plans to be
reviewed at least once every five years
• Will consult on changes to the National Planning Policy
Framework, so that authorities are expected to prepare
a Statement of Common Ground;

48. New Statutory Powers
• Statutory Duty on SoS to provide guidance on meeting needs of
older and disabled persons
• Optional Building Regulations to meet such needs
• Regulations requiring 5 year reviews of Local Plans
• Regulations to allow Spatial Development Strategies to allocate
strategic sites in combined authority areas.
• Amendments to General Development Regulations in relation to
LPA own permissions.
• Planning Freedoms Schemes
• S123 LGA 1972 Duty to sell at market price under review
• Legislation for locally accountable New Town Development
Corporations

49. Any questions?
Stephen Coult – 0115 976 6152
stephen.coult@brownejacobson.com

50. Wayleaves, Easements,
Telecoms and Sub-Stations
Kassra Powles and Jonathan Borer

51. What is a Wayleave?
• A contractual licence in nature – personal to the parties who
enter into it.
• It gives power companies rights to install and retain their
apparatus, usually in return for an annual payment.
• A wayleave normally contains provisions to bring it to and
end at the expiry of usually a 6 or 12 month notice period.

52. Wayleaves and Easements
• A wayleave IS NOT an interest in land, it is a contractual right.
Therefore it DOES NOT “run with the land” and strictly bind future
owners of the property (unless it is a “compulsory wayleave”).
• An easement IS an interest in land, capable of being registered.
Therefore an easement DOES “run with the land” and bind future
owners of the property.
• Easements are sometimes negotiated in place of a wayleave – more
secure as registered on title and preferable for underground work
and continuous access.

53. Identifying the right over land
• If there is a right to exclusive possession, this is probably
a lease.
• If there is a one off-payment and an entry is made, or
may be in the Official Title, this is probably an easement.
• If the arrangement appears to be contractual, with annual
payments, it is most likely to be a licence and therefore a
wayleave.

54. Terminating the Wayleave
• The extent to which future owners of the property are
bound by a wayleave is controlled by whichever Act
supports their creation, not by the principles of Land
Registration.

55. Electric Wayleaves
• These may be voluntary by agreement or “compulsory”.
• An electric company may apply to the Secretary of State
to grant a “compulsory” wayleave under the Electricity
Act 1989, section 6, provided that the land is not a
dwelling. Such an application may be opposed by the
landowner, but the Secretary of State’s decision is final.
• “Compulsory” wayleaves granted by the Secretary of
State can bind future owners of the property.

56. Gas Wayleaves
• Gas Act 1986
• This does not confer on a gas transporter a general
right to acquire a wayleave.
• A transporter may place equipment under any street,
but there is no immediate right to place equipment
under land which is not dedicated to the public
• Compulsory acquisition is therefore required- e.g
compulsory acquisition of an easement.
• Compensation is payable.

57. Water Wayleaves
• Water Resources Act 1991 and the Water Industry
Act 1991.
• The Environment Agency or the undertaker can lay
pipes in private land. Power is exercisable after
giving reasonable notice to the owner.
• The pipe vests in the Environment Agency or
undertaker.
• Compensation is payable

58. Telecoms Wayleaves
• Schedule 2 of Telecommunications Act 1984, varied by
Communications Act 2003 contains the Electronic Communications
Code (“the Code”).
• Under the Code para.5 an operator can secure a right, by court
order, over the land without the landowner’s (or anyone with an
interest in the land’s) consent.
• Compensation is payable – based on what is fair and reasonable.
This is not necessarily the market value. It is a matter for the
courts, taking into account the bargaining power of each party.

59. Telecoms Wayleaves
• Para.20 of the Code allows anyone with an interest in the land to
give notice requiring an operator to remove its apparatus,
provided that it can show its removal is necessary to carry out a
proposed development of the property – even if the lease has not
come to an end yet.
• This provision is subject to a further proviso that the alteration
will not substantially interfere with any service provided by the
operator’s network. So it is very difficult to succeed against an
operator under para.20.

60. Telecoms Wayleaves
• If a landowner has a right to require removal of equipment (e.g.
lease expiry, forfeiture, break clause), they can only do so after
service notice under para.21.
• The operator may then serve a counter notice, in which case, the
court may shall only make an order for removal if it is satisfied:
– The operator is not taking steps to secure rights to keep the apparatus
on the land, or is being unreasonably dilatory; or
– That the taking of those steps has not or will not secure such rights to
keep the apparatus on the land.
• Again it is very difficult to succeed under para.21.

61. Telecomm Wayleaves
• New legislation – Digital Economy Act 2017
• Received royal assent on 27 April 2017 – text not available
yet
• Will bring in a new Telecoms Code – when further regulations
are drawn up.
• Two key changes:
– Automatic right for Telecoms operators to share occupation with other
operators and upgrade their equipment;
– Rent calculation based on non-telecoms use of land. Could suppress
rent as bare roof unlikely to have high rent value

62. Practical Considerations
• Firstly, make sure that the right is correctly identified
(wayleave, lease, or easement).
• It is important to bear the statutory process in mind when
considering contractual rights to terminate or relocate
the apparatus in any wayleave.
• Just because a document provides rights of termination
does not mean that a licence holder will be happy to
leave.

63. What Can You Do About Wayleaves?
• See if the power company still needs it – if not, there is no reason
for them to keep the wayleave.
• Accept a licence and take the money, but make sure this is a good
market price.
• Resist it - the relevant company may then make an application for
a compulsory wayleave

64. Substations
• Two situations typically where substations are required:
(i) Request from landowner/developer to power
company for installation to serve new development
(landowner/developer will pay power company’s
costs)
(ii) Request from power company to landowner for site to
serve off-site need (power company will pay
landowner’s costs)

65. Substations – practicalities
• Easement strips
- For access and laying cables
- Power company will want rights to dig up the strip to lay
and access cables
- Will vary in width depending on the power company and
what’s negotiated
- Will need to be accommodated within development

66. Substations – practicalities
• General rights
- Over estate roads for laying cables and access
- Rights of support
- Access of air for ventilation
- Rights to enter landowner’s retained land to lay cables and
maintain substation (including breaking up the surface)
- Rights to make noise and cause vibrations from the
operation of the substation

67. Substations – practicalities
• Restrictions on the landowner’s retained land
- Not to do anything which might interfere with rights
- No alterations that might affect passage of air
- Not to build or erect anything over the easement strip
(certain exceptions)
- Not to plant anything within the easement strip
• Lift and shift provisions
- Always worth including for future proofing (cost neutral for
power companies, so should not be controversial)

68. Substations – points to consider
• Conduct of claims arising from breach of rights granted
Power companies want control over claims arising from the
exercise of rights granted to them. Typically:
- Want immediate notification of claims
- Want exclusive conduct of such claims (and to be able to
conduct claims themselves in the name of the landowner)
- Oblige landowners to take necessary steps to mitigate losses
- Prevent landowners from admitting liability, settling claims
etc without power company consent
These points can be an issue for the public sector.

69. Substations – points to consider
• Leasehold land (i.e. granting a sub-lease)
- Need landlord’s consent?
- Are we able to grant the required rights?
- Security of tenure?
- Must oblige power company to abide by head lease
covenants

70. Substations – negotiating
• Legal work for power companies is volume work. It is hard to get
issues escalated to the necessary level to get amendments agreed.
Identify issues early and push for resolution
• Negotiating position is better when it is the power company
requesting permission to put a substation on your land (but not by
much)
• Engage with power companies early where there is a need for a
new supply on site

71. Any questions?
Kassra Powles – 0115 908 4806
kassra.powles@brownejacobson.com
Jonathan Borer – 0121 237 3983
jonathan.borer@brownejacobson.com

72. All information correct at time of production.
The information and opinions expressed within this document are
no substitute for full legal advice. It is for guidance only and
illustrates the law as at the published date. If in doubt, please
telephone us on 0370 270 6000.
© Browne Jacobson LLP 2016 – The information contained within
this document is and shall remain the property of Browne
Jacobson. This document may not be reproduced without the prior
consent of Browne Jacobson.