Atkins v Secretary of State for Transport - Revision history

Designing Buildings at 07:22, 21 October 2020

2020-10-21T07:22:58Z

← Older revision		Revision as of 07:22, 21 October 2020
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	* BAILII: [http://www.bailii.org/ew/cases/EWHC/TCC/2013/139.html Atkins v Secretary of State for Transport] [2013] EWHC 139 (TCC).		* BAILII: [http://www.bailii.org/ew/cases/EWHC/TCC/2013/139.html Atkins v Secretary of State for Transport] [2013] EWHC 139 (TCC).

−	[[Category:~~Case_law~~]] [[Category:~~DCN_Case_Law~~]]	+	[[Category:DCN_Case_Law]] [[Category:DCN_Commentary]] [[Category:DCN_Guidance]] [[Category:Case_law]]

Designing Buildings: Reverted edits by Alkabban0 (talk) to last revision by Editor

2019-03-18T11:23:36Z

Reverted edits by Alkabban0 (talk) to last revision by Editor

← Older revision		Revision as of 11:23, 18 March 2019
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−	~~The profile contains detailed information specifying the key area~~ of expertise and their experience. The client can also consult the lawyers through e-mail or a phone call. By getting the legal advice free of cost, the client can learn whether a particular lawyer is capable of handling the Sharia law cases or not.<br />	+	Atkins v Secretary of State for Transport [2013] EWHC 139 (TCC)
−	Once the client gets familiar with the working style of the lawyer, they can schedule a face to face appointment with them as well. The labour law services consist of labour law audit and handling the litigation associate with the issues such as workplace discrimination, harassment, minimum wage, and the total number of work hours.	+

−	~~[http://alkabban~~.~~com/services/labour labour law services]~~	+	-----
		+	In this case, Atkins sought to challenge the decision of an arbitrator who found in favour of the Secretary of State for Transport (“the authority”) in determining whether Atkins was entitled to claim additional payment for remedying an excessive number of potholes beyond the number it had included as part of its lump sum contract.

−	[[Category:Case_law]]	+	Atkins was appointed by the authority under a managing agent and contractor (MAC) contract on the basis of an amended form of NEC3 Engineering and Construction contract, an “Area 6 MAC contract” (“the contract”). It was a lump-sum highways maintenance contract for a term of five years to maintain roads in East Anglia. As part of its duties, Atkins was obliged to remedy defects in the roads, including potholes. It transpired that the actual number of potholes to be remedied exceeded the number Atkins had originally anticipated and priced and was now seeking additional payment for these extra potholes via the compensation event machinery in the contract. The compensation provisions in the contract were similar to the NEC3 compensation events’ clause and so this case provides a useful insight into the court’s approach to the interpretation of such clauses, which rarely see the light of day in court. Such is the nature of NEC contracts that they aim to tackle risks as they arise - viewed as a ‘project management’ tool, they are designed to identify risks early and manage them as the project proceeds.
		+
		+	The dispute centred on Atkins’ claim for additional payment under clause 60.1(11) of the contract under which it sought relief for remedying the additional potholes which it claimed constituted defects under that clause. The Authority disagreed. Clause 60.1 (11) contains four bullet points of which the fourth is the most relevant: “The provider [Atkins] encounters a defect in the physical condition of the area network which an experienced contractor or consultant would have judged at the contract date to have such a small chance of being present that it would have been unreasonable for him to have allowed for it."
		+
		+	The contract provided for adjudication and arbitration under the Arbitration Act 1996. The adjudicator found in Atkins’ favour but the arbitrator determined the dispute in favour of the authority. Atkins appealed to the court on the grounds of a serious irregularity of the arbitrator’s award. The matter came before Mr Justice Akenhead in the TCC (Technology and Construction Court) earlier this year who agreed with the arbitrator.
		+
		+	The judge found on an ordinary interpretation of clause 60.1 (11) that the excessive number of potholes argument advanced by Atkins did not fall within the terms of the clause nor was it compatible with the extensive notice and other requirements of the contract. On a commercial interpretation, the judge determined that the parties take a risk in accepting a lump-sum contract so that if the actual number of potholes was lower than anticipated Atkins would make a profit. Following Atkins’ reasoning, if it was allowed to claim compensation for the additional potholes it would be in a win/win situation. The risk in lump-sum contracts is in pricing for that risk and taking it on the chin should that pricing prove inadequate. As the judge noted: “The parties collectively take a risk that the defects to be addressed will be more or less in number and in terms of expense than the contract lump sums may allow for....... There is nothing commercially unfair or indeed unusual in the parties taking these sorts of risk.”
		+
		+	While no new law emerges from this case, it serves as a useful reminder of the commercial risks parties assume in adopting lump sum (as opposed to re-measure) contracts. Interpretation of NEC3 contracts is also welcome given their rare appearances before the courts, again reminding us that such contracts are designed to identify and tackle risks before they escalate into insurmountable problems requiring formal dispute resolution.
		+
		+	While critics of this form of contract are quick to point out its shortcomings in terms of legal niceties and language, the essential feature of these contracts as a risk management tool is clear for those projects armed with sufficient resources and know-how to understand and manage them effectively. Indeed NEC contracts are now used extensively in public sector procurement, such as the London Olympics, so it is important to appreciate how they, and the use of the Highways Agency’s MAC contracts’ compensation provisions, will be interpreted.
		+
		+	-----
		+	This article was created by construction lawyer --[[User:Najma_Dunnett\|Najma Dunnett]] as part of an ongoing series of legal articles. Follow Najma on Twitter to keep up to date with the latest changes in construction law [https://twitter.com/NDunnett_Cons @NDunnett_Cons].
		+
		+	= Related articles on Designing Buildings Wiki =
		+
		+	* Adjudication.
		+	* Alternative Dispute Resolution legislation.
		+	* Arbitration.
		+	* Compensation event.
		+	* Construction contract.
		+	* Defect.
		+	* Disallowed cost.
		+	* NEC3.
		+
		+	=== External references ===
		+
		+	* BAILII: [http://www.bailii.org/ew/cases/EWHC/TCC/2013/139.html Atkins v Secretary of State for Transport] [2013] EWHC 139 (TCC).
		+
		+	[[Category:Case_law]] [[Category:DCN_Case_Law]]

Alkabban0 at 10:02, 18 March 2019

2019-03-18T10:02:31Z

← Older revision		Revision as of 10:02, 18 March 2019
Line 1:		Line 1:
−	~~Atkins v Secretary~~ of ~~State for Transport [2013] EWHC 139 (TCC)~~	+	The profile contains detailed information specifying the key area of expertise and their experience. The client can also consult the lawyers through e-mail or a phone call. By getting the legal advice free of cost, the client can learn whether a particular lawyer is capable of handling the Sharia law cases or not.<br />
		+	Once the client gets familiar with the working style of the lawyer, they can schedule a face to face appointment with them as well. The labour law services consist of labour law audit and handling the litigation associate with the issues such as workplace discrimination, harassment, minimum wage, and the total number of work hours.

−	~~-----~~	+	[http://alkabban.com/services/labour labour law services]
−	In this case, Atkins sought to challenge the decision of an arbitrator who found in favour of the Secretary of State for Transport (“the authority”) in determining whether Atkins was entitled to claim additional payment for remedying an excessive number of potholes beyond the number it had included as part of its lump sum contract.	+
−		+
−	Atkins was appointed by the authority under a managing agent and contractor (MAC) contract on the basis of an amended form of NEC3 Engineering and Construction contract, an “Area 6 MAC contract” (“the contract”). It was a lump-sum highways maintenance contract for a term of five years to maintain roads in East Anglia. As part of its duties, Atkins was obliged to remedy defects in the roads, including potholes. It transpired that the actual number of potholes to be remedied exceeded the number Atkins had originally anticipated and priced and was now seeking additional payment for these extra potholes via the compensation event machinery in the contract. The compensation provisions in the contract were similar to the NEC3 compensation events’ clause and so this case provides a useful insight into the court’s approach to the interpretation of such clauses, which rarely see the light of day in court. Such is the nature of NEC contracts that they aim to tackle risks as they arise - viewed as a ‘project management’ tool, they are designed to identify risks early and manage them as the project proceeds.	+
−		+
−	The dispute centred on Atkins’ claim for additional payment under clause 60.1(11) of the contract under which it sought relief for remedying the additional potholes which it claimed constituted defects under that clause. The Authority disagreed. Clause 60.1 (11) contains four bullet points of which the fourth is the most relevant: “The provider [Atkins] encounters a defect in the physical condition of the area network which an experienced contractor or consultant would have judged at the contract date to have such a small chance of being present that it would have been unreasonable for him to have allowed for it."	+
−		+
−	The contract provided for adjudication and arbitration under the Arbitration Act 1996. The adjudicator found in Atkins’ favour but the arbitrator determined the dispute in favour of the authority. Atkins appealed to the court on the grounds of a serious irregularity of the arbitrator’s award. The matter came before Mr Justice Akenhead in the TCC (Technology and Construction Court) earlier this year who agreed with the arbitrator.	+
−		+
−	The judge found on an ordinary interpretation of clause 60.1 (11) that the excessive number of potholes argument advanced by Atkins did not fall within the terms of the clause nor was it compatible with the extensive notice and other requirements of the contract. On a commercial interpretation, the judge determined that the parties take a risk in accepting a lump-sum contract so that if the actual number of potholes was lower than anticipated Atkins would make a profit. Following Atkins’ reasoning, if it was allowed to claim compensation for the additional potholes it would be in a win/win situation. The risk in lump-sum contracts is in pricing for that risk and taking it on the chin should that pricing prove inadequate. As the judge noted: “The parties collectively take a risk that the defects to be addressed will be more or less in number and in terms of expense than the contract lump sums may allow for....... There is nothing commercially unfair or indeed unusual in the parties taking these sorts of risk.”	+
−		+
−	While no new law emerges from this case, it serves as a useful reminder of the commercial risks parties assume in adopting lump sum (as opposed to re-measure) contracts. Interpretation of NEC3 contracts is also welcome given their rare appearances before the courts, again reminding us that such contracts are designed to identify and tackle risks before they escalate into insurmountable problems requiring formal dispute resolution.	+
−		+
−	While critics of this form of contract are quick to point out its shortcomings in terms of legal niceties and language, the essential feature of these contracts as a risk management tool is clear for those projects armed with sufficient resources and know-how to understand and manage them effectively. Indeed NEC contracts are now used extensively in public sector procurement, such as the London Olympics, so it is important to appreciate how they, and the use of the Highways Agency’s MAC contracts’ compensation provisions, will be interpreted.	+
−		+
−	~~-----~~	+
−	This article was created by construction lawyer --[[User:Najma_Dunnett\|Najma Dunnett]] as part of an ongoing series of legal articles. Follow Najma on Twitter to keep up to date with the latest changes in construction law [https://~~twitter~~.com/~~NDunnett_Cons @NDunnett_Cons].~~	+
−		+
−	~~= Related articles on Designing Buildings Wiki =~~	+
−		+
−	* Adjudication.	+
−	* Alternative Dispute Resolution legislation.	+
−	* Arbitration.	+
−	* Compensation event.	+
−	* Construction contract.	+
−	* Defect.	+
−	* Disallowed cost.	+
−	* NEC3.	+
−		+
−	~~=== External references ===~~	+
−		+
−	* BAILII: [http:/~~/www.bailii.org/ew/cases/EWHC/TCC/2013/139.html Atkins v Secretary of State for Transport~~] ~~[2013] EWHC 139 (TCC).~~	+

	[[Category:Case_law]]		[[Category:Case_law]]

Editor at 12:11, 12 March 2019

2019-03-12T12:11:30Z

← Older revision		Revision as of 12:11, 12 March 2019
Line 8:		Line 8:
	The dispute centred on Atkins’ claim for additional payment under clause 60.1(11) of the contract under which it sought relief for remedying the additional potholes which it claimed constituted defects under that clause. The Authority disagreed. Clause 60.1 (11) contains four bullet points of which the fourth is the most relevant: “The provider [Atkins] encounters a defect in the physical condition of the area network which an experienced contractor or consultant would have judged at the contract date to have such a small chance of being present that it would have been unreasonable for him to have allowed for it."		The dispute centred on Atkins’ claim for additional payment under clause 60.1(11) of the contract under which it sought relief for remedying the additional potholes which it claimed constituted defects under that clause. The Authority disagreed. Clause 60.1 (11) contains four bullet points of which the fourth is the most relevant: “The provider [Atkins] encounters a defect in the physical condition of the area network which an experienced contractor or consultant would have judged at the contract date to have such a small chance of being present that it would have been unreasonable for him to have allowed for it."

−	The ~~Contract~~ provided for adjudication and arbitration under the Arbitration Act 1996. The adjudicator found in Atkins’ favour but the arbitrator determined the dispute in favour of the authority. Atkins appealed to the court on the grounds of a serious irregularity of the arbitrator’s award. The matter came before Mr Justice Akenhead in the TCC (Technology and Construction Court) earlier this year who agreed with the arbitrator.	+	The contract provided for adjudication and arbitration under the Arbitration Act 1996. The adjudicator found in Atkins’ favour but the arbitrator determined the dispute in favour of the authority. Atkins appealed to the court on the grounds of a serious irregularity of the arbitrator’s award. The matter came before Mr Justice Akenhead in the TCC (Technology and Construction Court) earlier this year who agreed with the arbitrator.

	The judge found on an ordinary interpretation of clause 60.1 (11) that the excessive number of potholes argument advanced by Atkins did not fall within the terms of the clause nor was it compatible with the extensive notice and other requirements of the contract. On a commercial interpretation, the judge determined that the parties take a risk in accepting a lump-sum contract so that if the actual number of potholes was lower than anticipated Atkins would make a profit. Following Atkins’ reasoning, if it was allowed to claim compensation for the additional potholes it would be in a win/win situation. The risk in lump-sum contracts is in pricing for that risk and taking it on the chin should that pricing prove inadequate. As the judge noted: “The parties collectively take a risk that the defects to be addressed will be more or less in number and in terms of expense than the contract lump sums may allow for....... There is nothing commercially unfair or indeed unusual in the parties taking these sorts of risk.”		The judge found on an ordinary interpretation of clause 60.1 (11) that the excessive number of potholes argument advanced by Atkins did not fall within the terms of the clause nor was it compatible with the extensive notice and other requirements of the contract. On a commercial interpretation, the judge determined that the parties take a risk in accepting a lump-sum contract so that if the actual number of potholes was lower than anticipated Atkins would make a profit. Following Atkins’ reasoning, if it was allowed to claim compensation for the additional potholes it would be in a win/win situation. The risk in lump-sum contracts is in pricing for that risk and taking it on the chin should that pricing prove inadequate. As the judge noted: “The parties collectively take a risk that the defects to be addressed will be more or less in number and in terms of expense than the contract lump sums may allow for....... There is nothing commercially unfair or indeed unusual in the parties taking these sorts of risk.”

Editor at 12:07, 12 March 2019

2019-03-12T12:07:14Z

← Older revision		Revision as of 12:07, 12 March 2019
Line 2:		Line 2:

	-----		-----
−	In this case, Atkins sought to challenge the decision of an arbitrator who found in favour of the Secretary of State for Transport (“the ~~Authority”~~) in determining whether Atkins was entitled to claim additional payment for remedying an excessive number of potholes beyond the number it had included as part of its lump sum contract.	+	In this case, Atkins sought to challenge the decision of an arbitrator who found in favour of the Secretary of State for Transport (“the authority”) in determining whether Atkins was entitled to claim additional payment for remedying an excessive number of potholes beyond the number it had included as part of its lump sum contract.

−	Atkins was appointed by the ~~Authority~~ under a managing agent and contractor (MAC) contract on the basis of an amended form of NEC3 Engineering and Construction contract, an “Area 6 MAC contract” (“the ~~Contract”~~). It was a lump-sum highways maintenance contract for a term of five years to maintain roads in East Anglia. As part of its duties, Atkins was obliged to remedy defects in the roads, including potholes. It transpired that the actual number of potholes to be remedied exceeded the number Atkins had originally anticipated and priced and was now seeking additional payment for these extra potholes via the compensation event machinery in the contract. The compensation provisions in the contract were similar to the NEC3 compensation events’ clause and so this case provides a useful insight into the court’s approach to the interpretation of such clauses, which rarely see the light of day in court. Such is the nature of NEC contracts that they aim to tackle risks as they arise - viewed as a ‘project management’ tool, they are designed to identify risks early and manage them as the project proceeds.	+	Atkins was appointed by the authority under a managing agent and contractor (MAC) contract on the basis of an amended form of NEC3 Engineering and Construction contract, an “Area 6 MAC contract” (“the contract”). It was a lump-sum highways maintenance contract for a term of five years to maintain roads in East Anglia. As part of its duties, Atkins was obliged to remedy defects in the roads, including potholes. It transpired that the actual number of potholes to be remedied exceeded the number Atkins had originally anticipated and priced and was now seeking additional payment for these extra potholes via the compensation event machinery in the contract. The compensation provisions in the contract were similar to the NEC3 compensation events’ clause and so this case provides a useful insight into the court’s approach to the interpretation of such clauses, which rarely see the light of day in court. Such is the nature of NEC contracts that they aim to tackle risks as they arise - viewed as a ‘project management’ tool, they are designed to identify risks early and manage them as the project proceeds.

−	The dispute centred on Atkins’ claim for additional payment under clause 60.1(11) of the contract under which it sought relief for remedying the additional potholes which it claimed constituted defects under that clause. The Authority disagreed. Clause 60.1 (11) contains four bullet points of which the fourth is the most relevant: “The ~~Provider~~ [Atkins] encounters a defect in the physical condition of the area network which an experienced contractor or consultant would have judged at the contract date to have such a small chance of being present that it would have been unreasonable for him to have allowed for it."	+	The dispute centred on Atkins’ claim for additional payment under clause 60.1(11) of the contract under which it sought relief for remedying the additional potholes which it claimed constituted defects under that clause. The Authority disagreed. Clause 60.1 (11) contains four bullet points of which the fourth is the most relevant: “The provider [Atkins] encounters a defect in the physical condition of the area network which an experienced contractor or consultant would have judged at the contract date to have such a small chance of being present that it would have been unreasonable for him to have allowed for it."

	The Contract provided for adjudication and arbitration under the Arbitration Act 1996. The adjudicator found in Atkins’ favour but the arbitrator determined the dispute in favour of the authority. Atkins appealed to the court on the grounds of a serious irregularity of the arbitrator’s award. The matter came before Mr Justice Akenhead in the TCC (Technology and Construction Court) earlier this year who agreed with the arbitrator.		The Contract provided for adjudication and arbitration under the Arbitration Act 1996. The adjudicator found in Atkins’ favour but the arbitrator determined the dispute in favour of the authority. Atkins appealed to the court on the grounds of a serious irregularity of the arbitrator’s award. The matter came before Mr Justice Akenhead in the TCC (Technology and Construction Court) earlier this year who agreed with the arbitrator.

−	The judge found on an ordinary interpretation of clause 60.1 (11) that the excessive number of potholes argument advanced by Atkins did not fall within the terms of the clause nor was it compatible with the extensive notice and other requirements of the ~~Contract~~. On a commercial interpretation, the judge determined that the parties take a risk in accepting a lump-sum contract so that if the actual number of potholes was lower than anticipated Atkins would make a profit. Following Atkins’ reasoning, if it was allowed to claim compensation for the additional potholes it would be in a win/win situation. The risk in lump-sum contracts is in pricing for that risk and taking it on the chin should that pricing prove inadequate. As the judge noted: “The parties collectively take a risk that the defects to be addressed will be more or less in number and in terms of expense than the contract lump sums may allow for....... There is nothing commercially unfair or indeed unusual in the parties taking these sorts of risk.”	+	The judge found on an ordinary interpretation of clause 60.1 (11) that the excessive number of potholes argument advanced by Atkins did not fall within the terms of the clause nor was it compatible with the extensive notice and other requirements of the contract. On a commercial interpretation, the judge determined that the parties take a risk in accepting a lump-sum contract so that if the actual number of potholes was lower than anticipated Atkins would make a profit. Following Atkins’ reasoning, if it was allowed to claim compensation for the additional potholes it would be in a win/win situation. The risk in lump-sum contracts is in pricing for that risk and taking it on the chin should that pricing prove inadequate. As the judge noted: “The parties collectively take a risk that the defects to be addressed will be more or less in number and in terms of expense than the contract lump sums may allow for....... There is nothing commercially unfair or indeed unusual in the parties taking these sorts of risk.”

	While no new law emerges from this case, it serves as a useful reminder of the commercial risks parties assume in adopting lump sum (as opposed to re-measure) contracts. Interpretation of NEC3 contracts is also welcome given their rare appearances before the courts, again reminding us that such contracts are designed to identify and tackle risks before they escalate into insurmountable problems requiring formal dispute resolution.		While no new law emerges from this case, it serves as a useful reminder of the commercial risks parties assume in adopting lump sum (as opposed to re-measure) contracts. Interpretation of NEC3 contracts is also welcome given their rare appearances before the courts, again reminding us that such contracts are designed to identify and tackle risks before they escalate into insurmountable problems requiring formal dispute resolution.

−	While critics of this form of contract are quick to point out its shortcomings in terms of legal niceties and language, the essential feature of these contracts as a risk management tool is clear for those projects armed with sufficient resources and know-how to understand and manage them effectively. Indeed NEC contracts are now used extensively in public sector procurement, such as the Olympics, so it is important to appreciate how they, and the use of the Highways Agency’s MAC contracts’ compensation provisions, will be interpreted.	+	While critics of this form of contract are quick to point out its shortcomings in terms of legal niceties and language, the essential feature of these contracts as a risk management tool is clear for those projects armed with sufficient resources and know-how to understand and manage them effectively. Indeed NEC contracts are now used extensively in public sector procurement, such as the London Olympics, so it is important to appreciate how they, and the use of the Highways Agency’s MAC contracts’ compensation provisions, will be interpreted.

	-----		-----
	This article was created by construction lawyer --[[User:Najma_Dunnett\|Najma Dunnett]] as part of an ongoing series of legal articles. Follow Najma on Twitter to keep up to date with the latest changes in construction law [https://twitter.com/NDunnett_Cons @NDunnett_Cons].		This article was created by construction lawyer --[[User:Najma_Dunnett\|Najma Dunnett]] as part of an ongoing series of legal articles. Follow Najma on Twitter to keep up to date with the latest changes in construction law [https://twitter.com/NDunnett_Cons @NDunnett_Cons].

−	~~= Find out more =~~	+	= Related articles on Designing Buildings Wiki =
−		+
−	=== Related articles on Designing Buildings Wiki ===	+

	* Adjudication.		* Adjudication.

Editor at 11:56, 12 March 2019

2019-03-12T11:56:26Z

← Older revision		Revision as of 11:56, 12 March 2019
Line 4:		Line 4:
	In this case, Atkins sought to challenge the decision of an arbitrator who found in favour of the Secretary of State for Transport (“the Authority”) in determining whether Atkins was entitled to claim additional payment for remedying an excessive number of potholes beyond the number it had included as part of its lump sum contract.		In this case, Atkins sought to challenge the decision of an arbitrator who found in favour of the Secretary of State for Transport (“the Authority”) in determining whether Atkins was entitled to claim additional payment for remedying an excessive number of potholes beyond the number it had included as part of its lump sum contract.

−	Atkins was appointed by the Authority under a managing agent and contractor (MAC) contract on the basis of an amended form of NEC3 Engineering and Construction contract, an “Area 6 MAC contract” (“the Contract”). It was a lump sum highways maintenance contract for a term of five years to maintain roads in East Anglia. As part of its duties, Atkins was obliged to remedy defects in the roads, including potholes. It transpired that the actual number of potholes to be remedied exceeded the number Atkins had originally anticipated and priced and was now seeking additional payment for these extra potholes via the compensation event machinery in the ~~Contract~~. The compensation provisions in the ~~Contract~~ were similar to the NEC3 compensation events’ clause and so this case provides a useful insight into the ~~Court’s~~ approach to the interpretation of such clauses, which rarely see the light of day in court. Such is the nature of NEC contracts that they aim to tackle risks as they arise - viewed as a ‘project management’ tool, they are designed to identify risks early and manage them as the project proceeds.	+	Atkins was appointed by the Authority under a managing agent and contractor (MAC) contract on the basis of an amended form of NEC3 Engineering and Construction contract, an “Area 6 MAC contract” (“the Contract”). It was a lump-sum highways maintenance contract for a term of five years to maintain roads in East Anglia. As part of its duties, Atkins was obliged to remedy defects in the roads, including potholes. It transpired that the actual number of potholes to be remedied exceeded the number Atkins had originally anticipated and priced and was now seeking additional payment for these extra potholes via the compensation event machinery in the contract. The compensation provisions in the contract were similar to the NEC3 compensation events’ clause and so this case provides a useful insight into the court’s approach to the interpretation of such clauses, which rarely see the light of day in court. Such is the nature of NEC contracts that they aim to tackle risks as they arise - viewed as a ‘project management’ tool, they are designed to identify risks early and manage them as the project proceeds.

−	The dispute centred on Atkins’ claim for additional payment under clause 60.1(11) of the ~~Contract~~ under which it sought relief for remedying the additional potholes which it claimed constituted defects under that clause. The Authority disagreed. Clause 60.1 (11) contains four bullet points of which the fourth is the most relevant: “The Provider [Atkins] encounters a defect in the physical condition of the ~~Area Network~~ which an experienced contractor or consultant would have judged at the ~~Contract Date~~ to have such a small chance of being present that it would have been unreasonable for him to have allowed for it."	+	The dispute centred on Atkins’ claim for additional payment under clause 60.1(11) of the contract under which it sought relief for remedying the additional potholes which it claimed constituted defects under that clause. The Authority disagreed. Clause 60.1 (11) contains four bullet points of which the fourth is the most relevant: “The Provider [Atkins] encounters a defect in the physical condition of the area network which an experienced contractor or consultant would have judged at the contract date to have such a small chance of being present that it would have been unreasonable for him to have allowed for it."

−	The Contract provided for adjudication and arbitration under the Arbitration Act 1996. The adjudicator found in Atkins’ favour but the arbitrator determined the dispute in favour of the ~~Authority~~. Atkins appealed to the ~~Court~~ on the grounds of a serious irregularity of the arbitrator’s award. The matter came before Mr Justice Akenhead in the TCC (Technology and Construction Court) earlier this year who agreed with the arbitrator.	+	The Contract provided for adjudication and arbitration under the Arbitration Act 1996. The adjudicator found in Atkins’ favour but the arbitrator determined the dispute in favour of the authority. Atkins appealed to the court on the grounds of a serious irregularity of the arbitrator’s award. The matter came before Mr Justice Akenhead in the TCC (Technology and Construction Court) earlier this year who agreed with the arbitrator.

−	The judge found on an ordinary interpretation of clause 60.1 (11) that the excessive number of potholes argument advanced by Atkins did not fall within the terms of the clause nor was it compatible with the extensive notice and other requirements of the Contract. On a commercial interpretation the judge determined that the parties take a risk in accepting a lump sum contract so that if the actual number of potholes was lower than anticipated Atkins would make a profit. Following Atkins’ reasoning, if it was allowed to claim compensation for the additional potholes it would be in a win/win situation. The risk in lump sum contracts is in pricing for that risk and taking it on the chin should that pricing prove inadequate. As the judge noted: “The parties collectively take a risk that the defects to be addressed will be more or less in number and in terms of expense than the contract lump sums may allow for....... There is nothing commercially unfair or indeed unusual in the parties taking these sorts of risk.”	+	The judge found on an ordinary interpretation of clause 60.1 (11) that the excessive number of potholes argument advanced by Atkins did not fall within the terms of the clause nor was it compatible with the extensive notice and other requirements of the Contract. On a commercial interpretation, the judge determined that the parties take a risk in accepting a lump-sum contract so that if the actual number of potholes was lower than anticipated Atkins would make a profit. Following Atkins’ reasoning, if it was allowed to claim compensation for the additional potholes it would be in a win/win situation. The risk in lump-sum contracts is in pricing for that risk and taking it on the chin should that pricing prove inadequate. As the judge noted: “The parties collectively take a risk that the defects to be addressed will be more or less in number and in terms of expense than the contract lump sums may allow for....... There is nothing commercially unfair or indeed unusual in the parties taking these sorts of risk.”

−	~~Whilst~~ no new law emerges from this case, it serves as a useful reminder of the commercial risks parties assume in adopting lump sum (as opposed to re-measure) contracts. Interpretation of NEC3 contracts is also welcome given their rare appearances before the courts, again reminding us that such contracts are designed to identify and tackle risks before they escalate into insurmountable problems requiring formal dispute resolution. ~~Whilst~~ critics of this form of contract are quick to point out its shortcomings in terms of legal niceties and language, the essential feature of these contracts as a risk management tool is clear for those projects armed with sufficient resources and know-how to understand and manage them effectively. Indeed NEC contracts are now used extensively in public sector procurement, such as the Olympics, so it is important to appreciate how they, and the use of the Highways Agency’s MAC contracts’ compensation provisions, will be interpreted.	+	While no new law emerges from this case, it serves as a useful reminder of the commercial risks parties assume in adopting lump sum (as opposed to re-measure) contracts. Interpretation of NEC3 contracts is also welcome given their rare appearances before the courts, again reminding us that such contracts are designed to identify and tackle risks before they escalate into insurmountable problems requiring formal dispute resolution.
		+
		+	While critics of this form of contract are quick to point out its shortcomings in terms of legal niceties and language, the essential feature of these contracts as a risk management tool is clear for those projects armed with sufficient resources and know-how to understand and manage them effectively. Indeed NEC contracts are now used extensively in public sector procurement, such as the Olympics, so it is important to appreciate how they, and the use of the Highways Agency’s MAC contracts’ compensation provisions, will be interpreted.

	-----		-----

Editor at 12:44, 26 January 2016

2016-01-26T12:44:47Z

← Older revision		Revision as of 12:44, 26 January 2016
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−
	Atkins v Secretary of State for Transport [2013] EWHC 139 (TCC)		Atkins v Secretary of State for Transport [2013] EWHC 139 (TCC)

−	----	+	-----
−		+
	In this case, Atkins sought to challenge the decision of an arbitrator who found in favour of the Secretary of State for Transport (“the Authority”) in determining whether Atkins was entitled to claim additional payment for remedying an excessive number of potholes beyond the number it had included as part of its lump sum contract.		In this case, Atkins sought to challenge the decision of an arbitrator who found in favour of the Secretary of State for Transport (“the Authority”) in determining whether Atkins was entitled to claim additional payment for remedying an excessive number of potholes beyond the number it had included as part of its lump sum contract.

	Atkins was appointed by the Authority under a managing agent and contractor (MAC) contract on the basis of an amended form of NEC3 Engineering and Construction contract, an “Area 6 MAC contract” (“the Contract”). It was a lump sum highways maintenance contract for a term of five years to maintain roads in East Anglia. As part of its duties, Atkins was obliged to remedy defects in the roads, including potholes. It transpired that the actual number of potholes to be remedied exceeded the number Atkins had originally anticipated and priced and was now seeking additional payment for these extra potholes via the compensation event machinery in the Contract. The compensation provisions in the Contract were similar to the NEC3 compensation events’ clause and so this case provides a useful insight into the Court’s approach to the interpretation of such clauses, which rarely see the light of day in court. Such is the nature of NEC contracts that they aim to tackle risks as they arise - viewed as a ‘project management’ tool, they are designed to identify risks early and manage them as the project proceeds.		Atkins was appointed by the Authority under a managing agent and contractor (MAC) contract on the basis of an amended form of NEC3 Engineering and Construction contract, an “Area 6 MAC contract” (“the Contract”). It was a lump sum highways maintenance contract for a term of five years to maintain roads in East Anglia. As part of its duties, Atkins was obliged to remedy defects in the roads, including potholes. It transpired that the actual number of potholes to be remedied exceeded the number Atkins had originally anticipated and priced and was now seeking additional payment for these extra potholes via the compensation event machinery in the Contract. The compensation provisions in the Contract were similar to the NEC3 compensation events’ clause and so this case provides a useful insight into the Court’s approach to the interpretation of such clauses, which rarely see the light of day in court. Such is the nature of NEC contracts that they aim to tackle risks as they arise - viewed as a ‘project management’ tool, they are designed to identify risks early and manage them as the project proceeds.

−	The dispute centred on Atkins’ claim for additional payment under clause 60.1(11) of the Contract under which it sought relief for remedying the additional potholes which it claimed constituted defects under that clause. The Authority disagreed. Clause 60.1 (11) contains four bullet points of which the fourth is the most relevant: “The Provider [Atkins] encounters a defect in the physical condition of the Area Network which an experienced contractor or consultant would have judged at the Contract Date to have such a small chance of being present that it would have been unreasonable for him to have allowed for it."	+	The dispute centred on Atkins’ claim for additional payment under clause 60.1(11) of the Contract under which it sought relief for remedying the additional potholes which it claimed constituted defects under that clause. The Authority disagreed. Clause 60.1 (11) contains four bullet points of which the fourth is the most relevant: “The Provider [Atkins] encounters a defect in the physical condition of the Area Network which an experienced contractor or consultant would have judged at the Contract Date to have such a small chance of being present that it would have been unreasonable for him to have allowed for it."

	The Contract provided for adjudication and arbitration under the Arbitration Act 1996. The adjudicator found in Atkins’ favour but the arbitrator determined the dispute in favour of the Authority. Atkins appealed to the Court on the grounds of a serious irregularity of the arbitrator’s award. The matter came before Mr Justice Akenhead in the TCC (Technology and Construction Court) earlier this year who agreed with the arbitrator.		The Contract provided for adjudication and arbitration under the Arbitration Act 1996. The adjudicator found in Atkins’ favour but the arbitrator determined the dispute in favour of the Authority. Atkins appealed to the Court on the grounds of a serious irregularity of the arbitrator’s award. The matter came before Mr Justice Akenhead in the TCC (Technology and Construction Court) earlier this year who agreed with the arbitrator.
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	Whilst no new law emerges from this case, it serves as a useful reminder of the commercial risks parties assume in adopting lump sum (as opposed to re-measure) contracts. Interpretation of NEC3 contracts is also welcome given their rare appearances before the courts, again reminding us that such contracts are designed to identify and tackle risks before they escalate into insurmountable problems requiring formal dispute resolution. Whilst critics of this form of contract are quick to point out its shortcomings in terms of legal niceties and language, the essential feature of these contracts as a risk management tool is clear for those projects armed with sufficient resources and know-how to understand and manage them effectively. Indeed NEC contracts are now used extensively in public sector procurement, such as the Olympics, so it is important to appreciate how they, and the use of the Highways Agency’s MAC contracts’ compensation provisions, will be interpreted.		Whilst no new law emerges from this case, it serves as a useful reminder of the commercial risks parties assume in adopting lump sum (as opposed to re-measure) contracts. Interpretation of NEC3 contracts is also welcome given their rare appearances before the courts, again reminding us that such contracts are designed to identify and tackle risks before they escalate into insurmountable problems requiring formal dispute resolution. Whilst critics of this form of contract are quick to point out its shortcomings in terms of legal niceties and language, the essential feature of these contracts as a risk management tool is clear for those projects armed with sufficient resources and know-how to understand and manage them effectively. Indeed NEC contracts are now used extensively in public sector procurement, such as the Olympics, so it is important to appreciate how they, and the use of the Highways Agency’s MAC contracts’ compensation provisions, will be interpreted.

−	----	+	-----
−		+	This article was created by construction lawyer --[[User:Najma_Dunnett\|Najma Dunnett]] as part of an ongoing series of legal articles. Follow Najma on Twitter to keep up to date with the latest changes in construction law [https://twitter.com/NDunnett_Cons @NDunnett_Cons].
−	This article was created by construction lawyer --[[User~~%3ANajma%20Dunnett~~\|Najma Dunnett]] as part of an ongoing series of legal articles. Follow Najma on Twitter to keep up to date with the latest changes in construction law [https://twitter.com/NDunnett_Cons @NDunnett_Cons].	+

	= Find out more =		= Find out more =

	=== Related articles on Designing Buildings Wiki ===		=== Related articles on Designing Buildings Wiki ===
−	*Adjudication.	+
−	*Alternative Dispute Resolution legislation.	+	* Adjudication.
−	*Arbitration.	+	* Alternative Dispute Resolution legislation.
−	*Compensation event.	+	* Arbitration.
−	*~~Contract~~.	+	* Compensation event.
−	*Defect.	+	* Construction contract.
−	*NEC3.	+	* Defect.
		+	* Disallowed cost.
		+	* NEC3.

	=== External references ===		=== External references ===
−	*BAILII: [http://www.bailii.org/ew/cases/EWHC/TCC/2013/139.html Atkins v Secretary of State for Transport] [2013] EWHC 139 (TCC).	+
		+	* BAILII: [http://www.bailii.org/ew/cases/EWHC/TCC/2013/139.html Atkins v Secretary of State for Transport] [2013] EWHC 139 (TCC).

	[[Category:Case_law]]		[[Category:Case_law]]

Designing Buildings at 06:56, 25 May 2014

2014-05-25T06:56:19Z

← Older revision		Revision as of 06:56, 25 May 2014
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	----		----

−	~~[[File:Ndunnett profile.jpg\|146x169px\|alt=Ndunnett profile.jpg]]~~	+	This article was created by construction lawyer --[[User%3ANajma%20Dunnett\|Najma Dunnett]] as part of an ongoing series of legal articles. Follow Najma on Twitter to keep up to date with the latest changes in construction law [https://twitter.com/NDunnett_Cons @NDunnett_Cons].
−		+
−	This article was created by construction lawyer [[User%3ANajma%20Dunnett\|Najma Dunnett]] as part of an ongoing series of legal articles. Follow Najma on Twitter to keep up to date with the latest changes in construction law [https://twitter.com/NDunnett_Cons @NDunnett_Cons].	+

	= Find out more =		= Find out more =

Designing Buildings at 07:55, 12 January 2014

2014-01-12T07:55:04Z

← Older revision		Revision as of 07:55, 12 January 2014
Line 36:		Line 36:
	*BAILII: [http://www.bailii.org/ew/cases/EWHC/TCC/2013/139.html Atkins v Secretary of State for Transport] [2013] EWHC 139 (TCC).		*BAILII: [http://www.bailii.org/ew/cases/EWHC/TCC/2013/139.html Atkins v Secretary of State for Transport] [2013] EWHC 139 (TCC).

−	~~[[Category:Contracts_/_payment]]~~
	[[Category:Case_law]]		[[Category:Case_law]]

Designing Buildings at 13:35, 28 June 2013

2013-06-28T13:35:06Z

← Older revision		Revision as of 13:35, 28 June 2013
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	*NEC3.		*NEC3.

−	External references	+	=== External references ===
	*BAILII: [http://www.bailii.org/ew/cases/EWHC/TCC/2013/139.html Atkins v Secretary of State for Transport] [2013] EWHC 139 (TCC).		*BAILII: [http://www.bailii.org/ew/cases/EWHC/TCC/2013/139.html Atkins v Secretary of State for Transport] [2013] EWHC 139 (TCC).

	[[Category:Contracts_/_payment]]		[[Category:Contracts_/_payment]]
	[[Category:Case_law]]		[[Category:Case_law]]