Lawyer Monthly Magazine - August 2019 Edition

construction of the Trade Contractors. This is in marked contrast to the way a Main Contractor is responsible for the design and construction of its sub-contractors. This procurement route certainly does have a number of advantages attached to it which I go on to discuss below, however, during the boom years in the British construction sector when many of these major urban regeneration projects began, some developers could find themselves forced down the Construction Management route by market conditions. During a boom, contractors can be choosy about the work they want to do, and they are often reluctant to undertake major projects on procurement models which involve them in assuming a lot of risk. This is a feature of "Design and Build" procurement involving one Main Contractor. During the boom some developers were experiencing difficulty in getting contractors to even respond to tenders which were based on Design and Build contracts, or if tender responses were received, then the prices offered by the Main Contractor for assuming the intended risks could be so inflated as to make the project unviable from the developer's point of view. As a consequence, to take forward these large urban regeneration schemes, developers sometimes had to look at alternative procurement routes such as Construction Management which were more appealing to contractors. The typical advantages of Construction Management as a procurement route include: • a very early start on site is possible because the design and construction phases can overlap and the Trade Contract Package for the groundwork can be tendered and let before the roof package is even designed; • individually tendered Trade Contract Packages may achieve cost savings because each package may be competitively tendered and more competitively priced; • the independent design advice for the client from the directly engaged consultants (akin to traditional contracting) is maintained; • the Construction Manager’s CONSTRUCTION LAW What Makes Construction Suffer? Brexit, the Housing Market and Adjudication exposure to risk is limited, given he is not directly responsible for the design and construction of the Trade Contractors. This can lead to a lower cost for the client because whereas a Main Contractor would have priced for the risk of carrying out the job under say a Design and Build Contract that risk and that price may no longer be a consideration for the Construction Manager. The typical challenges posed by Construction Management include: • since there is no single Main Contract, the overall cost for carrying out the project cannot really be known with any certainty at the outset. The cost can only really be known when the last of the Trade Contracts is let, which is often well into the project; • design and construction liability is very diffuse, it is the very opposite of the “one- point responsibility” that is often achieved under a Design and Build contract. In Construction Management, design responsibility is split between several consultants and then further divided between Trade Contractors who may have design portions and design responsibility within their respective Trade Contracts. As a consequence, Can you share more about your experience working on the major urban regeneration schemes in London’s Docklands? What challenges did you come across? A common feature of these major urban regeneration schemes is the procurement model often used, namely “Construction Management”. This form of procurement does present some challenges. Under this formof procurement, the developer client, rather than engaging one “Main Contractor”, instead engages a “Construction Manager” who is something of hybrid between a consultant and a contractor. The Construction Manager’s role is to divide the work on the project into a series of “Trade Contract Packages” and then to manage a number of “Trade Contractors” who bid for each package. Each Trade Contractor then enters into a “Trade Contract” directly with the client (and not with the Construction Manager). A significant feature of Construction Management procurement is that the Construction Manager is not usually responsible for the defective design or The construction sector is a key sector for the UK economy and is one of the largest. The construction sector was disproportionately affected since the recession of 2008 and with the industry being easily impacted by surrounding events, we speak to Ian Reid, Partner in the Construction Department at Trowers & Hamlins Solicitors LLP about the challenges which remain. From urban regeneration schemes, to the impact of Brexit and adjudication, Ian shares how the housing market is constantly changing, and how this affects his clients and those in the construction industry. 56 WWW.LAWYER-MONTHLY.COM | AUG 2019 Professional Excellence By Ian Reid, Trowers & Hamlins LLP