Adjudication Round-up (Winter 2013)

Collateral warranties as construction contracts

The case of Parkwood Leisure Ltd v Laing O'Rourke Wales and West Ltd [2013] EWHC 2665 (TCC); [2013] CILL 3413 concerned Part 8 proceedings raising the question of whether, and in what circumstances, a collateral warranty can amount to a 'construction contract' within the meaning of section 104 of the Housing Grants, Construction and Regeneration Act 1996.

The court held that it is a question of interpretation in each case, but that the particular warranty in this case was to be treated as a construction contract. The underlying contract was for the carrying out of construction operations, and the warranty provided an undertaking that the works would be carried out and completed. Importantly, the warranty included a prospective element.