Are collateral warranties construction contracts?
The High Court has decided that a collateral warranty provided by a building contractor to a tenant for a building was a ‘construction contract’ for the purpose of section 104 of the Housing Grants (Construction and Regeneration) Act 1996. The decision means that, as things stand, beneficiaries under collateral warranties may be able to bring claims against warrantors by way of adjudication. The decision has prompted debate and attracted a certain amount of criticism, with some commentators stating that the decision is ‘wrong’. The judgment was given by Akenhead J in Parkwood Leisure Ltd v Laing O’Rourke Wales and West Ltd  EWHC 2665 (TCC). Parkwood was the tenant of a swimming and leisure facility under a 10-year lease granted by Orion Land & Leisure (Cardiff). Orion had engaged Laing O’Rourke to carry out and complete the design and construction of the swimming pool at the facility.
Laing O’Rourke executed a collateral warranty in favour of Parkwood as tenant. This collateral warranty was executed after the works had commenced, but before practical completion.
Following a dispute between Laing O’Rourke and Parkwood regarding various alleged defects in the works, Parkwood applied to the High Court for a declaration that a collateral warranty was a construction contract for the purposes of the 1996 act…
Click on the link below to read the rest of the Addleshaw Goddard briefing.
Sign in or Register to continue reading this article
It's quick, easy and free!
It takes just 5 minutes to register. Answer a few simple questions and once completed you’ll have instant access.Register now
Why register to The Lawyer
In-depth, expert analysis into the stories behind the headlines from our leading team of journalists.
Identify the major players and business opportunities within a particular region through our series of free, special reports.
Receive your pick of The Lawyer's daily and weekly email newsletters, tailored by practice area, region and job function.
More relevant to you
To continue providing the best analysis, insight and news across the legal market we are collecting some information about who you are, what you do and where you work to improve The Lawyer and make it more relevant to you.
News from The Lawyer
Analysis from The Lawyer
Which firms are cutting it in this era of slimline rosters, and who are the GC new brooms making clean sweeps? The Lawyer can reveal all
Could Slater & Gordon achieve its stated aim of becoming a top consumer brand by acquiring Pannone?