Harrison Drury wins landmark case for construction sector

By Harrison Drury

12 Sep 2013

Harrison Drury has won a landmark case at the High Court that is likely to have significant repercussions for the UK construction industry.

The firm has successfully represented Parkwood Leisure Ltd in a claim against construction giant Laing O’Rourke which was heard in the Technology and Construction Court.

Parkwood Leisure Ltd is responsible for operating and managing Cardiff International Pool. The facility was designed and built by Laing O’Rourke. While Parkwood was not a party to the main construction contract, it has the benefit of a collateral warranty from Laing O’Rourke in respect of the design and building works.

It was previously the position that collateral warranties did not fall within the statutory definition of construction contracts and therefore could not be adjudicated under the Housing Grants, Construction and Regeneration Act 1996. Adjudication is a procedure for resolving disputes without resorting to lengthy and expensive court proceedings.

However, this case has confirmed that in certain circumstances a collateral warranty can fall within the definition of a “construction contract” for the purposes of s104 of the Housing, Grants, Construction and Regeneration Act 1996. The effect of this is that statutory adjudication is now potentially available for resolving warranty claims as an alternative to formal court proceedings.

Colin Fenny, associate solicitor at Harrison Drury, who represented Parkwood Leisure, said: “The decision will have serious implications for the construction industry because it extends the use of the adjudication procedure in principle to parties that are not directly involved in the underlying construction project where they have the benefit of an appropriately worded warranty from the contractor.

“Adjudication presents a much speedier and cheaper option for claimants to seek remedy for construction disputes compared to formal court proceedings, and while only certain warranties will fall within the scope of this decision, it could lead to an increased use of this procedure for the resolution of warranty claims at least in relation to existing warranties. It could significantly speed up the resolution of disputes to the benefit of the construction industry generally in delivering buildings without costly delays and disputes as the economy picks up.”

“In the longer term I expect that the decision is also inevitably going to lead to a greater reluctance on contractors to provide collateral warranties to third parties in the future, or at least limit the scope and extent of any warranties they are prepared to give.”

Earlier this year, Parkwood Leisure Limited intimated a claim to Laing O”Rourke under its collateral warranty. The claim related to alleged defects in the system which controls air quality at the facility. Laing O’Rourke denied any liability and rejected Parkwood’s proposal that the parties voluntarily refer the claim to adjudication for resolution on the basis that the adjudication procedure was not available for collateral warranty claims.

To avoid any subsequent issues arising over whether an adjudicator had the jurisdiction to determine a collateral warranty claim, Parkwood sought a declaration in the Technology and Construction Court that the collateral warranty was a “construction contract” and therefore satisfied the qualifying requirements for the statutory adjudication procedure.

In his judgement of the case, heard on August 23, Mr Justice Akenhead ruled that where a collateral warranty was “for…the carrying out of construction operations” it could be construed as a “construction contract” and therefore be subject to statutory adjudication.

On the terms of the collateral warranty in question, Mr Justice Akenhead had “no doubt” that it was “for…the carrying out of construction operations” and should therefore be treated as a construction contract. The ruling means that Parkwood Leisure Ltd can now refer its warranty claim in respect of the air quality system to adjudication for determination. Harrison Drury will continue to represent the firm in this process.

Latest news

1

HMRC compliance is a business priority Mandylockett

HMRC compliance is a business priority

22 Oct 2026

2

Blackpool shortlisted for UK City of Culture 2029 A Collection Of The People Involved In Blackpools City Of Culture Bid Celebrate Shortlisting

Blackpool shortlisted for UK City of Culture 2029

22 Oct 2026

3

Lancashire turbines sold to Belgium Europlay 2

Lancashire turbines sold to Belgium

20 Oct 2026

4

Round of promotions across PM+M Pmm Promotions October 26

Round of promotions across PM+M

20 Oct 2026

5

Brysdales to sponsor transport category at Red Rose Awards RRA26

Brysdales to sponsor transport category at Red Rose Awards

19 Oct 2026

Background image for hub sign up block

LBV Hub

Leverage Lancashire Business View platforms

Post your news
Post your events
Post your offers
Build your network
Improve your SEO
Gain coverage in the magazine
Sign-up
Events
LBV131 November/December Magazine Networking Event
LBV131 Magazine Launch Social720No Text 19 Nov 2026

LBV131 November/December Magazine Networking Event

The Landmark, School Lane, Burnley, BB11 1UF

08:30 - 10:30

Lancashire Business Day 2026
LBD26 WW Logo720 27 Nov 2026

Lancashire Business Day 2026

Burnley Football Club, BB10 4BX

12:00 - 17:00

Sub36 Reunion & Networking
03 Dec 2026

Sub36 Reunion & Networking

Burnley Football Club, BB10 4BX

15:00 - 17:00

Help to Grow: Management Course
Help To Grow 25 Sep 2026 - 15 Dec 2026

Help to Grow: Management Course

University of Lancashire, Preston, PR1 2HE

09:30 - 12:00

Girlie Night Out
Lancaster And Morecambe Logo 1 23 Oct 2026

Girlie Night Out

Lancaster Brewery, Lancaster, LA1 3LA

19:00 - 23:00

North West Business Expo
LBV Website Events GraphicBusiness Expo 1 23 Oct 2026

North West Business Expo

Toughsheet Stadium , Bolton, BL6 6JW

09:00 - 15:00

The PM+M Autumn Budget seminar - East Lancashire
Autumn Budget 2026 LBV 29 Oct 2026

The PM+M Autumn Budget seminar - East Lancashire

Blackburn Rovers Football Club (Premier Suite), Blackburn, BB2 4JF

08:00 - 10:30

Lancashire Finance Leaders Forum: The Autumn Budget in Focus
ian-UmTFcwHLPC0-unsplash.jpg.jpg 29 Oct 2026

Lancashire Finance Leaders Forum: The Autumn Budget in Focus

Farington Lodge Hotel, Stanifield Lane, PR25 4QR

08:00 - 10:00

Autumn Budget 2026
Lancaster And Morecambe Logo 1 30 Oct 2026

Autumn Budget 2026

Lancaster & Morecambe College, Lancaster, LA1 2TZ

08:00 - 10:00

Blackburn Budget Breakfast 2026
LBV Website Events GraphicBudget Breakfast 30 Oct 2026

Blackburn Budget Breakfast 2026

Premier Suite, Blackburn Rovers FC, Blackburn, BB2 4JF

07:30 - 10:30

Chamber Breakfast Networking – November
Lancaster And Morecambe Logo 1 03 Nov 2026

Chamber Breakfast Networking – November

Porsche Centre South Lakes, Carnforth, LA6 1FW

08:30 - 10:30

Funding Unlocked
IMG_3058.jpeg.jpg 04 Nov 2026

Funding Unlocked

Accrington Stanley FC, Accrington , BB5 5BX

10:00 - 12:30

Advertise with us

Reaching 50,000 members, our print, digital and event platforms offer a fantastic way to raise your business profile and help you grow.

Find out more LBV130 Online GraphicWebsite
Subscribe now

Weekly news bulletin