The International Construction Law Review is the leading authority on international construction law and provides critical information in areas ranging from procurement, project partnering, subcontracting, environmental issues, delay and disruption in construction contracts, trends in dispute resolution and alternatives to the FIDIC conditions.
Edited by Chantal-Aimée Doerries QC and Professor Doug Jones AO of Atkin Chambers, along with a distinguished editorial advisory board, it provides comprehensive reports and articles which offer in-depth and incisive analysis of the key developments in construction law across the globe. ICLR’s genuinely global perspective is also supported by a team of dedicated international correspondents based in over 20 countries.
- Disruption Claims – A Two-Step Causation Requirement by Mikal Brøndmo
- Is There a Place for the Operator-Led Hospital PPP in Australia? by Rebecca Eyers
- Insolvency Issues in the Construction Sector and How to Manage them in a Global Context by Frédéric Gillion and Toshima Issur
- Negligence Divergence: When is a duty of care owed in construction? by Andrew Hazelton, Wayne Jocic and Julian Bailey
- US Transportation PPPs: Background, Emerging Trends and the Impacts of Covid-19 by Hannah Higgins
- Resolving Infrastructure Disputes: The Interplay Between International Commercial Courts and International Arbitration by Doug Jones AO and Janet Walker CM
In this first Part of International Construction Law Review for 2022, we are pleased to present a diverse range of articles which cover the lifecycle of major infrastructure projects. The ability for such projects to assist in global recovery efforts has been much lauded. Such zeal, however, inevitably raises timeless questions. How should such works be financed? How is liability to be allocated and risk mitigated? And finally, where disputes do arise, how can they be most efficiently resolved? Each of these questions is touched on in this Part, as the prospect of rebuilding is imbued with a new enthusiasm for innovating practice.
We begin this Part with Mikal Brøndmo’s article “Disruption Claims – A Two-Step Causation Requirement”. The article provides an insightful comparative discussion of disruption analysis under the English, Swedish and Norwegian legal system. The notion of two-step causation stems from Norwegian law, under which, to establish disruption, evidence of inefficiency as a result of circumstances attributable to the employer must first be proven. It must then be demonstrated that the resulting inefficiency caused the additional costs claimed. The article contends that this form of analysis should be used in English and Swedish legal systems to assist in identifying and substantiating factual causation, as a means to better assess claims. Doing so, it is argued, will not only clarify the circumstances in which a disruption claim arises but additionally enhance the predictability, and efficiency of disruption analysis.
Next, Rebecca Eyers’ article “Is There a Place for the Operator-Led Hospital PPP in Australia? An Analysis of the Past, Present and Future” takes us to the leading edge of contemporary Public-Private Partnership discussion, examining the viability of operator-led models. The article focuses on the suitability of such a model to provide public health infrastructure in Australia. The history of Public-Private Partnerships in financing public health infrastructure in Australia is first discussed. It is argued that the reforms to Public-Private Partnerships over time have not allayed underlying concerns, as to the risks presented. This conclusion is supported by a detailed analysis of the findings of the 2020 New South Wales Parliamentary inquiry into the performance of the New South Wales Northern Beaches Hospital, which utilised an operator-led model.
“Insolvency Issues in the Construction Sector and How to Manage them in a Global Context”, by Frédéric Gillion and Toshima Issur, then examines the issue of insolvency in three contexts: the insolvency of a contractor/ employer during a project; insolvency in the joint-venture context; and dispute resolution in the context of insolvency. The issue of managing insolvency risk is an intrinsic component of construction work, which has been clearly heightened by the effects of the Covid-19 pandemic. The article provides a global perspective on managing insolvency risk, explaining why contactor or sub-contractor insolvency does not need to be fatal to the delivery of a project, where powers to terminate, enforce securities, and obtain direct payments are properly understood. The article provides comprehensive insight into these issues by analysing, the position under FIDIC contracts, as well as the approach courts have taken in the common and civil law.
We then turn to the first of two articles from the Society of Construction Law International Conference 2021, “Negligence Divergence: When Is a Duty of Care Owed in Construction?”, jointly authored by Andrew Hazelton, Wayne Jocic and Julian Bailey. The article examines the diverse range of approaches to liability for building defects in negligence adopted by the courts of England, Australia and New Zealand. Three scenarios, across these three jurisdictions, are examined: the liability of a contractor to an employer or subsequent owner for building defects; the liability of an inspecting authority for failure to identify defective work; and the liability of professional consultants involved in the preparation and approval of designs to third parties. A consistent answer to these questions is yet to be found in the common law. The article argues, however, that England and New Zealand have adopted the most cohesive models. While New Zealand has interpreted the circumstances in which a duty of care may be established liberally, the English have reached the opposite conclusion. The Australian conclusion is sadly unclear on this question, with inconsistent caselaw, and differing State based legislative interventions.
Returning to the topic of Public-Private Partnerships, Hannah Higgins’ article “US Transportation PPPs: Background, Emerging Trends and the Impacts of Covid-19” examines the low levels of adoption of Public-Private Partnerships in the US transportation system. The reason for this, it is argued, has been threefold: the availability of low-cost public sector capital; the lack of public support for such programs; as well as reticence to adopt such programs driven by some high-profile failures of such models. One of the consequences of Covid-19 has been increased emphasis of infrastructure spending around the world, as a means a public means to stimulate economic growth. Against this background, support for Public-Private Partnership models has increased, with changes being made to develop a cohesive policy and regulatory framework for implementation. It is estimated that underinvestment in US transportation has a cumulative backlog exceeding a trillion dollars. In light of the issues facing traditional financing models, and the reforms recently implemented, the article contends that the Public-Private Partnerships will be of increasing importance.
Finally, we return once more to the Society Construction Law International Conference 2021, to an article jointly authored by Doug Jones and Janet Walker, on “Resolving Infrastructure Disputes: The Interplay between International Commercial Courts and International Arbitration”. The article examines the impact of the development of International Commercial Courts upon the resolution of infrastructure disputes by the more traditional means of international arbitration. The article analyses the Singapore International Commercial Court’s Technology, Infrastructure and Construction List, adopted this year, as an example of the procedural reforms International Commercial Courts are adopting to merge arbitral and judicial best practice. Attention is devoted to the challenges facing international arbitration in the infrastructure context. This discussion is contextualised against the Belt and Road Initiative, examining the disputes which may arise, as well as the potential contribution of both International Commercial Courts and international arbitration to the resolution of such disputes.
CHANTAL-AIMÉE DOERRIES QC
PROFESSOR DOUGLAS S JONES AO