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

Contract agreed with Republic of Turkiye for Typhoon aircraft BAE Systems Turkiye contract

Contract agreed with Republic of Turkiye for Typhoon aircraft

27 Oct 2025

2

PM+M announces another 19 promotions across the firm PM+M promotions

PM+M announces another 19 promotions across the firm

27 Oct 2025

3

Celebrating 20 years of connecting the county LBV 20 Celebration Guests

Celebrating 20 years of connecting the county

27 Oct 2025

4

BAKO named 'Supplier of the Year' at awards BAKO Supplier of the Year

BAKO named 'Supplier of the Year' at awards

27 Oct 2025

5

St Annes thrives with strongest August footfall in years St Annes Square footfall

St Annes thrives with strongest August footfall in years

26 Oct 2025

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
CMI Level 5 Project Management Course
UCLanAerialCampus.jpg.jpg
LBV Hub Seminars
21 Feb 2025 - 21 Feb 2026

CMI Level 5 Project Management Course

Preston Campus, Preston, PR1 2HE

08:00 - 17:00

CMI Level 5 Management and Leadership Course
UCLanAerialCampus.jpg.jpg
LBV Hub Seminars
21 Feb 2025 - 21 Feb 2026

CMI Level 5 Management and Leadership Course

Preston Campus, Preston , PR1 2HE

09:00 - 17:00

Help to grow management course
Help to grow - barriers to growth.png.png
LBV Hub Seminars
26 Sep 2025 - 16 Dec 2025

Help to grow management course

Preston Campus , Preston , PR1 2HE

09:00 - 15:00

RISE - Lancashire's unique leadership programme for women
thumbnail_Emma Weston Illustration WENDY BOWERS RISE Illustrstion.jpg.jpg
LBV Hub Seminars
22 Oct 2025 - 18 Mar 2026

RISE - Lancashire's unique leadership programme for women

East Lancashire Chamber of Commerce, Clayton le Moors, BB5 5JR

09:30 - 15:30

Women scaling up Blackpool Fylde and Wyre
LBV Hub Seminars
22 Oct 2025 - 09 Jan 2026

Women scaling up Blackpool Fylde and Wyre

The Small Business Academy, Blackpool, FY4 5JX

09:30 - 15:30

Lancaster District Business Support Expo
Lancs-cham-logo.jpg.jpg
LBV Hub Networking
29 Oct 2025 - 29 Oct 2025

Lancaster District Business Support Expo

The Platform, Morecambe, LA4 4DB

10:00 - 15:00

Chamber Breakfast Networking – November
Lancs-cham-logo.jpg.jpg
LBV Hub Networking
06 Nov 2025 - 06 Nov 2025

Chamber Breakfast Networking – November

Porsche Centre South Lakes, Carnforth, LA6 1FW

08:30 - 10:30

Lancashire Police business update with The Police and Crime Commissioner
Lancs-cham-logo.jpg.jpg
LBV Hub Roundtables
10 Nov 2025 - 10 Nov 2025

Lancashire Police business update with The Police and Crime Commissioner

Lancaster Castle, Lancaster, LA1 1YN

14:00 - 16:00

Beyond the Brand: Building trust through values and integrity
1.png.png
LBV Hub Networking
11 Nov 2025 - 11 Nov 2025

Beyond the Brand: Building trust through values and integrity

Society1, Coworking Space, Preston, PR1 3LT

18:00 - 20:00

AI, Creativity, and what it means to be human
2.jpg.jpg
LBV Hub Networking
11 Nov 2025 - 11 Nov 2025

AI, Creativity, and what it means to be human

Society1, Coworking Space, Preston, PR1 3LT

18:00 - 20:00

The Business Network Central and East Lancashire
LBV Hub Networking
13 Nov 2025 - 13 Nov 2025

The Business Network Central and East Lancashire

Stanley House, Blackburn, BB2 7NP

11:30 - 14:15

The AI Lab: E-commerce
Ai Lab ecommerce (1).png.png
LBV Hub Seminars
14 Nov 2025 - 14 Nov 2025

The AI Lab: E-commerce

Door4 Office, Burnley Wharf, Burnley, BB11 1JG

09:00 - 11:30

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 LBV124 Online Graphic
Subscribe now

Weekly news bulletin