LAWBUILD
Newsletter No. 7
Tuesday 24 June 2003
 |
 |
Lawbuild provides construction
law expertise
to save clients time and money.
A personal message from Lawbuild's Principal
David Lewis
|
A recurrent source of mild irritation to many
people, including me, is the company which, for no discernible
reason, decides to rebrand itself and discards a familiar
and meaningful name (such as British Steel or Royal Mail)
with an abstract label like Corus or Consignia.
This is a trap we will never fall into. Lawbuild,
you may rest assured, will always be known as Lawbuild. Unless,
perhaps, we are invited to merge with Clifford Chance and
are offered a very large sum of money.
In light of these remarks you may be surprised
to notice that the title of this publication has been changed
from The Lawbuild Newsletter to The Lawbuild Letter.
This is no relaunch; it is merely a change of name, and one
which - once it had occurred to us - could not be resisted,
such is the electric allure of alliteration. But there will
be no rebranding of this firm while I am in charge, and everything
else will remain exactly as it was (except, of course, where
I have decided to change it).
There is much of interest in this edition of
The Lawbuild Letter No. 7. Read and enjoy!
With kind regards.
Principal of Lawbuild, solicitors
Editor of the Lawbuild Newsletter
Return to contents
or index
Contents
The final certificate: to issue,
or not to issue?
A glossary of construction law
expressions: H is for …
Newsletter from Montenegro
Business Network International®
Dave Saunders, 1950-2003
They liked it
Newsletter stuff
About Lawbuild
Contact information
Legal disclaimers and warnings
relating to this newsletter: please read
Return to contents
or index
Index
Business Network International® (BNI)
Contact information
Dave Saunders, 1950-2003
Disclaimers, legal
Final certificate
Health and safety file
Health and safety plan
Lawbuild
Letters
Marjorie Bremner
Montenegro
Newsletter
Richard Schmidt
Robin Gellately-Smith
Warnings, legal
Return to contents
or index
The final certificate: to issue,
or not to issue?
The final certificate: to issue,
or not to issue?
You’re a contract administrator (CA) under a
building contract for substantial fitting-out works to offices.
The works have reached practical completion; the contractor
has made good all defects and you have issued a “making good
defects” certificate.
There were quite a few variations, which you
have valued at around £70,000, but the contractor has told
you, some time ago, that he’s preparing a claim for £100,000
(which, as far as you know, may or may not include a claim
for direct loss and/or damage).
Time has passed but the claim has not materialised.
You know that the next formal step will be to issue the final
certificate. Should you do that?
First and foremost, you should read and digest
what the contract says about the issuing of the final certificate.
For example, if the contract is based on a typical
standard-form building contract, the Intermediate Form of
Contract (IFC 98), with no material amendments, it will
say this:
- Not later than six months after practical
completion, the contractor must provide the CA with
all documents needed for adjusting the contract sum: clause
4.5.
- Not later than three months after the
CA receives those documents, the quantity surveyor (QS)
must prepare a statement of all the final valuations of
variations and the CA must send a copy of this statement
and the computations of the adjusted contract sum to the
contractor: clause 4.5.
- The contract doesn’t say what happens if
the contractor fails to provide the CA with all documents
needed for adjusting the contract sum within six months
from practical completion. I am inclined to think that
the QS can, and probably must, prepare a statement for the
CA to send the contractor during months seven to nine after
practical completion, on the basis of the best information
he has. I also think that, if there are queries which the
missing documents, if they came to light, might resolve
in the contractor’s favour, the CA should resolve them as
best he can on the basis of the documents he has. The CA
is not obliged to give the contractor the benefit of any
doubt (because, obviously, it’s unfair to allow the contractor
to benefit from his own breach of contract in failing to
provide documentation).
- Within 28 days after sending the statement
and computations to the contractor, or within 28
days after the making good defects certificate, whichever
is later, the CA must issue a final certificate certifying
the amount due to the contractor (or to the employer): clause
4.6.1.
- Within 5 days after the final certificate,
the employer must notify the contractor in writing of the
amount he proposes to pay in respect of the final certificate,
and to what it relates, and the basis on which it is calculated:
clause 4.6.1.2. Employers, don’t omit this notice: it’s
a statutory requirement, and potentially more important
than you might think. Also, don’t deduct any money from
the certified amount without giving notice under clause
4.6.1.3.
- Unless proceedings (by adjudication, or
in the court or arbitration) are started before or within
28 days after the final certificate, it is conclusive
that “any necessary effect has been given to all the terms
of this Contract that require additions to or adjustments
of or deductions from the Contract Sum” (except for accidental
or arithmetical errors), and that all extensions of time
which are due have been given, and that payment is in settlement
of all claims by the contractor for loss and expense: clause
4.7.1.
What are the main consequences for the employer
when the CA issues the final certificate in a situation where
the contractor is threatening (or has made) a claim?
- Bad consequence: it forces the issue
with the contractor, and may provoke him into starting an
adjudication.
- Good consequence: once 28 days have
passed the contractor can’t recover any additional money
under the contract.
What are the main consequences if the CA doesn’t
issue the final certificate?
- Bad consequence: the employer could
be in breach of the building contract, for which it’s difficult
to predict the outcome.
- Bad consequence: the employer might
have outstanding against him indefinitely an unresolved
claim, which presumably he might need to tell his accountants
about and which might have to be shown in his balance sheet.
Return to contents
or index
A glossary of construction law
expressions: H is for …
We couldn’t think of any construction-law-related
words beginning with G, so let’s move straight from F to H.
There are only two definitions, and conveniently they explain
the most important documents required by the Construction
(Design and Management) Regulations 1994, better known as
the CDM Regulations or just plain “CDM”.
Health
and safety file
A document required by CDM. It describes the
health and safety features of every completed building and
is passed by the client to the next purchaser of the building,
and so on. It must also be made available to tenants.
Anyone commissioning future works at the building
must appoint a planning supervisor, who must consult the health
and safety file as part of the process for minimising risks
to future workmen and occupants, and should copy relevant
information into the health and safety plan.
The health and safety file relates to the works
when completed.
Health and safety plan
A document started by the planning supervisor
and completed by the principal contractor, containing information
and methods of working as part of the process for minimising
risks to site workers and occupants of the building.
The health and safety plan relates to the works
as proposed or in progress.
Return to contents
or index
Newsletter from Montenegro
Shortly after our last newsletter, Robin Gellately-Smith
of Montenegro Enterprises sent us another of his newsletters
from Kotor, on the coast of Montenegro. As always, there
is no shortage of local colour.
It has been nearly a month since my last Newsletter
and this is because I have taken time to do a bit of exploring
along the coast of Montenegro. As it so happens, the recent
assassination of Mr Zoran Djindjic, Prime Minister of Serbia,
allows me the opportunity of including some background information
from the Montenegrin viewpoint. I have no idea at this time
who is responsible for his death and you are probably well
placed to find out the up-to-date situation before me, from
your news broadcasts.
As I have explained before, Montenegro is a small
country just a little larger than Wales in area, with a population
of 650,000. The indigenous population basically stems from
five main families and custom dictates that family members
all support each other in times of crises or personal attacks.
It used to be based on the vendetta system but now is not
so extreme, such as in parts of Albania. I am told of a situation,
not so long ago, when a group of Serbians tried to impose
a protection racket on some Montenegrin businesses. The family
concerned got together, and I put it no strongly than this,
the intruders were given short shrift with the message that
Montenegro was a no-go area for this type of operation.
I mention the above because by contrast, I am
told, the Serbians do not have this family unity. In fact
quite the opposite. Father fights son, son fights brother
and cousins alike, all in the name of money and property ownership.
Shootings and murders are quite commonplace and often go unreported.
With this mindset there is little wonder that gangs and Mafia-type
organised crime exist in Serbia.
During the troubles a crack unit of “Red Berets”
(known as “Special Forces”) was set up and trained by a chap
colloquially known as Captain Dragon. He is currently at
The Hague giving evedence at the Milosevic trial. Members
of the Ret Berets were principally recruited from the criminal
elements and those in prison. Under the leadership or control
of certain hardline generals, they were dispatched to carry
out particularly gruesome activities in Bosnia-Hercegovena,
Croatia and Kosovo.
After the transfer of power to Zoran Djindjic,
the Red Berets helped to capture Slobo Milosevic and send
him to The Hague. Unfortunately, since then many of the Red
Berets formed into gangs with connections with organised crime
in other eastern European countries. It was these gangs and
other criminal organisations, backed by Milosevic hardliners
and supporters, who were under attack from Zoran Djindjic
in a brave attempt to clear Serbia of organised criminal activities.
It is thought a coalition of these organisations was responsible
for the assassination.
Serbia has now declared a state of emergency
and closed all its borders and it is proposing to stay like
this until as many as possible, if not all, these criminal
leaders and organisations are cleared up. Now you will recall
that Serbia and Montenegro are a new country and I have explained
in my last Newsletter about this loose arrangement. In fact
they are quite different countries and the problems occurring
in Serbia are not, I repeat not, occurring here. Montenegrin
borders are not closed and we are not under a controlled “state
of emergency” from Belgrade.
It is important for me to briefly explain the
Montenegrin attitude and family structure because for reasons
of business contacts and getting things done one needs to
know who one is speaking to, and whether that person is in
a position to use his influence with other family members
to cut through the vast array of red tape that can all too
easily frustrate business deals.
Here the success or failure of a project or business
deal will, in many cases, be influenced by who you know and
their relationships with others. And for this reason it is
important not to be an exclusively known partner of one specific
group, whether family member or political party.
Americans and Russians are rapidly buying this
beautiful coast with its fantastic beaches for development.
The Russians achieve this by arriving with suitcases full
of cash and just wander around buying any land they can.
Because land is relatively cheap they don’t even quibble about
the price. Where this cash comes from I can only leave you
to speculate. The Americans are much more sophisticated,
they work through an organisation called USAID (United States
of America International Development). Primarily, this organisation
is set up to provide advice and training ranging from tax
advice to training local NGOs who are able to exert influence
on government policies. Underneath this organisation are
many smaller American groups, such as IRD, with financial
interests for developments such as hotels, holiday villages,
marinas and many other leisure-type developments, which are
in government control and offered for sale.
The Americans also have a consul based in Podgorica
(capital of Montenegro) in direct contact with the American
Embassy in Belgrade. The British on the other hand do not.
From the Montenegrin perspective the British Ambassador, Charles
Crawford, is pro-Serbia and anti-Montenegrin. Whether this
is British Government policy or a personal Charles Crawford
policy, I don’t know; the result is, I am afraid, the Brits
are going to lose out.
Bye for now.
Robin Gellately-Smith
Montenegro Enterprises
PC Skaljari
85330 Kotor, Montenegro
Serbia & Montenegro
t: +381 (082) 322249
m: +381 (069) 444895
e: robin@cg.yu
w: www.montenegroenterprises.com
Return to contents
or index
Business
Network International®
Lawbuild and David Lewis are a member of the
Victoria (London) Chapter of Business Network International
(BNI).
BNI is a business and professional networking
organisation whose purpose is to generate quality referred
business for its members. BNI can claim to be the most successful
organisation of its kind in the world, as it records the business
transacted on a weekly basis. In 2002 the 54,000 members
of BNI worldwide passed 2,500,000 referrals generating over
€1 billion of business. Currently, there are more than 2,700
active groups, of which several hundred are in the UK and
Ireland.
BNI groups limit membership to one person per
business, so members have an opportunity to lock out their
competition.
BNI insists on references before a member can
be accepted, and requires members to sign up to a code of
ethics. These safeguards, together with testimonials from
other members, promote confidence in the products and services
offered by members. So if you need a refurbishment contractor,
an architect, a quantity surveyor, a building surveyor, an
IT support company, or a telecommunications company, before
picking up the Yellow Pages it might be worth having a word
with us.
You can also contact us to ask about the benefits
of becoming a BNI member, and we can arrange for you to attend
one or two meetings as a visitor and without obligation.
To learn more, visit BNI Europe and BNI Victoria.
Return to contents
or index
Dave Saunders, 1950-2003
London BNI members were shocked and saddened
to learn of the untimely passing of Dave Saunders, early
in April.
Dave was the founder and owner of Motortone,
next to Kilburn station. Motortone provides “care for your
car”, and Dave’s family – including his wife Liz and his
daughter Emma - are carrying on the excellent business he
started and developed.
Dave was a member of BNI’s West Hampstead chapter,
and was also an Assistant Director in the London region.
When I’ve visited different BNI chapters across the capital
it would always lift my spirits to find Dave there, often
in a speaker’s rôle. A natural, brilliant and inspiring
orator, who never needed to refer to notes, Dave would forcefully
and with humour illuminate and exemplify the BNI philosophy
in whose effectiveness he so deeply believed: “Givers gain.”
On 1 April Dave became chapter director of
West Hampstead BNI. On 26 March, little thinking he had
only ten days left to him, he had written a letter to his
fellow-members, introducing the new chapter team, and ending:
“BNI’s philosophy is so simple but so effective – Givers
Gain. So if you want more – give more. I am really looking
forward to working with you over the next six months to
help us all do just that.”
On one occasion, during a visit to my home,
Dave explained to me his own philosophy, the one which underpinned
his business. In essence it was a focus and concentration
on quality of service, and a demand that his customer should
be involved: that is to say, Dave would explain, and would
expect the customer to be interested in, what Dave was doing
to the customer’s car and why he was doing it.
As I thought about this conversation later,
Dave’s philosophy reminded me of Robert M Pirsig’s cult
work of the 1970s, Zen and the Art of Motorcycle Maintenance,
with its compelling theory that quality is the essence of
all things, and its description of the deconstruction of
a motorcycle, an exploded diagram in which each part is
meticulously laid out alongside the position and in the
order of its removal, so that it can readily and correctly
be put back together. Knowing that (as we learned from
Liz after his death) Dave was a hippy in the 1960s, and
that he had started Motortone in the 1970s, it would not
have surprised me to learn that he had read Pirsig’s book.
But unfortunately I never got round to asking him.
Finding himself, as he often did, in situations
which called for leadership, Dave Saunders always came to
the fore. He led by example, and his example inspired the
rest of us. It will continue to do so.
Return to contents
or index
They liked
it
Some comments we received on Lawbuild
Newsletter No. 6
“Thank
you for [the newsletter]. I was away at MIPIM when it arrived,
so I have only now been able to dip in and have a look at
it … I have also taken the liberty of forwarding it to a couple
of colleagues here who are also involved in the development/building
side of life … Thanks for keeping touch.” Richard Schmidt,
Partner, Middleton Potts (solicitors), London EC1.
“Thanks
very much for sending me this – it is entertaining and informative!!”
Marjorie Bremner, Berg Kaprow Lewis (accountants), London
N3.
Return to contents
or index
Newsletter stuff
Want to unsubscribe?
To remove your name from the mailing list for
this newsletter, please email unsubscribe@lawbuild.co.uk
(or request removal in a reply to the email enclosing this
newsletter).
To add your name to our mailing list, email subscribe@lawbuild.co.uk.
Missed Lawbuild Letters Nos. 1 to 6?
Visit our website and click on the “Articles” tab
at the top.
Pass it on
Please forward this newsletter to anyone you
think might like to receive it. And we shall be glad to add
that person to our mailing list for future newsletters (we
publish six times a year) if you or they will send us their
email address.
Tell us
All feedback is very welcome.
We would like to hear from you if you have any comments, queries,
corrections or suggestions, or a letter for publication.
Return to contents
or index
About Lawbuild
Lawbuild is a specialist construction law
practice offering expert advice and services to anyone carrying
out or lending money for construction, and to any buyer, seller,
landlord or tenant of recently built or refurbished property.
We are experienced, thorough and professional. Our aim is
to save clients time and money, and our charges are very reasonable.
Lawbuild is equally at home with contracts for
services and with many other kinds of non-specialist agreement.
Lawbuild’s principal, David Lewis, has more than
25 years’ experience in contracts and construction law.
Return to contents
or index
Contact information
Here’s how to get in touch with us:
Email
newsletter@lawbuild.co.uk
Phone
020 8346 6424
Fax
020 8346 0745
Mobile
07887 757 606
Post
David Lewis
Lawbuild, solicitors
37 The Grove
LONDON
N3 1QT
Website
www.lawbuild.co.uk
Return to contents
or index
Legal disclaimers and warnings
relating to this newsletter: please read
Disclaimers
Lawbuild is providing this newsletter on an “as
is” basis and makes no representations or warranties of any
kind with respect to this newsletter or its index and disclaims
all such representations and warranties.
In addition, Lawbuild makes no representations
or warranties about the accuracy, completeness, or suitability
for any purpose of the information published in this newsletter.
The information contained in this newsletter may contain technical
inaccuracies or typographical errors. All liability of Lawbuild
howsoever arising for any such inaccuracies or errors is expressly
excluded to the fullest extent permitted by law.
Neither Lawbuild nor any of its employees or
other representatives will be liable for loss or damage arising
out of or in connection with the use of this newsletter.
This is a comprehensive limitation of liability that applies
to all damages of any kind, including (without limitation)
compensatory, direct, indirect or consequential damages, loss
of data, income or profit, loss of or damage to property and
claims of third parties.
Notwithstanding the foregoing, none of the preceding
exclusions and limitations is intended to limit any rights
you may have as a consumer under local law or other statutory
rights which may not be excluded or in any way to exclude
or limit Lawbuild’s liability to you for death or personal
injury resulting from our negligence or that of our employees
or agents.
Intellectual property
The Lawbuild trade mark has been registered under
the Trade Marks Act 1994 of the United Kingdom of Great Britain
and Northern Ireland in respect of Classes 16, 41 and 42.
All other trade marks, brand names, product names and titles
and copyrights used in this newsletter are trade marks, brand
names, product names or copyrights of their respective holders.
No permission is given by Lawbuild in respect of the use of
any of them and such use may constitute an infringement of
the holder’s rights.
Return to contents
or index
You’ve
come to the end
You’ve now reached the end of Lawbuild Letter
No. 7. We hope you’ve enjoyed reading it, and we look
forward to hearing from you at any time.
|
