Built Intelligence

Collateral warranties and the right to adjudicate – 'construction contracts' after all?

Collateral warranties and the right to adjudicate – 'construction contracts' after all?

In this short course, we will look at the Abbey Healthcare v Simply Construct case where the Court of Appeal reverses the first instance decision, finding that a collateral warranty was in fact a 'construction contract' within the meaning of the Construction Act, notwithstanding the fact that the construction work itself had long since been completed.

In a significant decision for the construction industry, likely to be welcomed by construction project stakeholders, the Court of Appeal has held by majority that a collateral warranty entered into in respect of construction works completed four years before does in fact constitute a “construction contract” under the meaning of section 104(1) of the Housing Grants, Construction and Regeneration Act 1996 (the Construction Act). As such, the beneficiary of the collateral warranty had a statutory right to adjudicate.

By the end of this course, you should be able to:

  1. Understand the courts' rationale of why they thought the collateral warranty did not amount to a "construction contract"
  2. Understand section 104(1) of the Housing Grants, Construction and Regeneration Act 1996 (the Construction Act) in more detail