When is a warranty more than a warranty?

Any contractor or professional consultant who has provided a collateral warranty on a construction project, or indeed any real-estate owner who has the benefit of a collateral warranty, will be interested to learn of the recent case of Parkwood Leisure Ltd v Laing O’Rourke Wales and West Ltd (2013 EWHC 2665 (TCC)). In this case, Mr Justice Akenhead held that the collateral warranty given by a main contractor, Laing O’Rourke, to a tenant, Parkwood, was a construction contract and so the regime set out in the Housing Grants, Construction & Regeneration Act 1996 applied to include the right for the beneficiary to commence adjudication proceedings against the warrantor.

Parkwood was a sub-tenant of the Cardiff international pool, a swimming and sports centre. Before Parkwood’s sub-lease was granted, the head leaseholder, Orion Land and Leisure (Cardiff), engaged Laing O’Rourke to finish the design and carry out and complete its construction. Prior to the completion of the works and the commencement of Parkwood’s sub-lease, Laing O’Rourke executed a collateral warranty for the benefit of Parkwood stating, among other things, that it ‘has carried out and shall carry out and complete the works in accordance with the contract’. Parkwood then took possession of the centre and opened it to the public.

Over the next 30 months, a number of alleged construction and commissioning defects were discovered, which were resolved in a March 2012 settlement agreement. In February 2013, Parkwood wrote to Laing O’Rourke complaining that the air-handling units installed at the centre were defective and/or not fit for purpose and subsequently applied to the court for a declaration that the dispute was not covered in the March 2012 settlement agreement and that the collateral warranty was a construction contract for the purposes of the Housing Grants, Construction & Regeneration Act…

If you are registered and logged in to the site, click on the link below to read the rest of the Collyer Bristow briefing. If not, please register or sign in with your details below.

Sign in or Register to continue reading this article

Sign in

Register

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

 

Industry insight

In-depth, expert analysis into the stories behind the headlines from our leading team of journalists.

 

Market intelligence

Identify the major players and business opportunities within a particular region through our series of free, special reports.

 

Email newsletters

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.

Briefings from Collyer Bristow

  • The Wedgwood Collection — saved for the nation

    The recent successful fundraising appeal to save the historic Wedgwood Collection of around 80,000 works of art for the nation received much publicity.

  • Gifts to the nation and their taxation

    The offer by the estate of Lady Mary Soames to transfer 38 paintings by Sir Winston Churchill into public possession under the Acceptance in Lieu scheme provides a timely opportunity to consider how the scheme is functioning.

View more briefings from Collyer Bristow

Analysis from The Lawyer

Overview

4 Bedford Row
London
WC1R 4TF
UK

Turnover (£m): 14.90
No. of lawyers: 56