Construction Law and Management

Keith Pickavance

• Publisher: Informa Law from Routledge
• Year: 2013
• ISBN:
  9781317859666
• Edition: 1
• Topic: Law
• Subtopic: Construction Law
• Index: Law

Construction Law and Management explains the state of design information appropriate to a given procurement route, and the need to identify risks and strategies for managing them. This handy desk side reference offers a comprehensive guide to construction law and management and is essential reading for anyone in the construction, architecture and engineering industries.

CHAPTER 1

INTRODUCTION TO THE ENGLISH AND EU LEGAL FRAMEWORKS

Hamish Lal

AN OVERVIEW OF THE ENGLISH LEGAL SYSTEM

An overview

English law is divided in a number of ways. It may be divided into substantive law and procedure:

• Substantive law refers to all the branches of law which define a person’s rights and duties, such as contract, tort and crime.

• Procedure deals with the complex rules by which the process of law is set in motion to enforce some substantive right or remedy. In the context of construction disputes, procedure includes arbitration and other dispute resolution processes, particularly adjudication.

A further division of law is into common law and statute law; that is, into judge-made law and legislation. Then there is another type of division between common law and equity, which is a distinction based upon the two independent roots of English law.

Another division is between private law and public law, sometimes called administrative law:

• Private law relates to rights exercisable between individuals (including corporations and other legal entities).

• Public law, however, relates to the powers and duties exercisable by public bodies, which may affect the rights or expectations of individuals.

Another division exists between so-called domestic and international law. International law itself falls into two distinct categories: private international law, which applies to disputes having an international character but concerning individuals or other legal entities; and public international law, which applies primarily between states. Private international law comprises the rules applied in a particular country and of other countries whose laws may affect a dispute.

The common law

English law is based upon the common law system. The common law means literally the law which was applied in common over all parts of the realm. It was created in the twelfth and thirteenth centuries by the King’s judges and has been developed and handed down to the present time.

The essential feature of the common law which distinguishes it from other systems is that it is based on evolving precedent, with no written principles from which the precedent stems.

The common law is not written down. It is stated each time a judgment is given at the end of a case, when the judge gives reasons for the legal principles embodied in his decision. In practice, the common law is found in the reports of judgments, and the law on any topic is to be discovered by reading those cases which turn on related facts.

To understand some of the complexities and apparent inconsistencies of English contract law it helps to have an understanding of how the law developed. In the Middle Ages, the courts of common law failed to give remedies in some cases. A Court of Chancery was set up to deal with such cases and the rules applied by the Court of Chancery also became law, known as “equity” (as opposed to the common law). The remedies available in equity (but not in common law) include specific performance of obligations (other than an obligation to pay money which was a remedy available at common law) and injunctions. Although all courts can now administer both common law and equity, the rules which apply to equity are still relevant. For example, a person seeking an equitable remedy is said to have to “come to equity with clean hands” (in other words they must not have done something which ought to deprive them of the remedy sought).

Statute law

While the judges declare and apply the common law, Parliament in its legislative capacity passes enactments to change the law. Since the seventeenth century Parliament has had supreme authority and can in theory make or unmake any law. The passing of a Bill through Parliament and the debate at different stages in its passage can be followed in the media and in Hansard.

EU law

In addition to Common Law and Statute Law, the European Economic Community has, since 1973, formed a third independent and increasingly major source of law applying throughout the United Kingdom. The foundation of the Community was and remains the Treaty of Rome, signed by the original six members in 1957. Membership of the Community has grown since then and continues to do so. Development in the 1980s was towards the Single European Market, for which 1992 was set as the target.

The European treaties form a “framework” of measures, expressed as broad aims to be achieved, which are intended to be filled in by detailed measures. Areas for detailed legislation include: competition law and public procurement, health and safety, environment and consumer protection, and the more general harmonisation of the laws of Member States to the extent required for the functioning of the common market.

The EEC is unique in having achieved more in terms of interstate integration than any comparable organisation in history. It operates in some ways as an international body and in other ways as a federal government. The principal institutions through which it operates are:

(i)	The European Parliament, which is now a directly elected body which exercises defined powers, but falling far short of a full legislative assembly;
(ii)	The Council of Ministers, which is a fluctuating body of Ministers from individual Member States who meet when required and generally represent the interests of their own governments. Presidency of the Council circulates among the Member States. When the Ministers are heads of state, the Council is referred to as the Council of Europe;
(iii)	The European Commission, which is the equivalent of the European Civil Service, headed by permanent Commissioners who, although drawn from the Member States, should represent the interests of the Community, unlike the members of the Council. Every Member State contributes one Commissioner and the larger States, two;
(iv)	The European Court of Justice, which comprises judges appointed by each Member State and has the function of interpreting and applying Community law.

European legislation emanates from the Council and the European Commission, principally in the form either of a Regulation or a Directive.

Regulations have direct binding force on all Member States and comprise fully detailed measures.

Conversely, Directives specify the result to be achieved and are intended to be acted upon through individual legislation enacted in each Member State.

Procurement legislation

Since the 1970s, there has been much complicated Community legislation regulating the procurement procedures of public or government bodies. This has been replaced by recent directives which consolidate the existing legislation, extend it to cover utilities and add it to the remedies available for breach of procurement law as expressed either by the Treaty or the legislation. The principal Community legislation is as follows:

(i)	Council Directive 93/37 concerning the coordination of procedures for the award of public works contracts ([1993] OJ L199/54) as amended by Directive 97/52 ([1997] OJ L328/1);
(ii)	Council Directive 93/36 coordinating procedures for the award of public supply contracts ([1993] OJ L199/1) as amended by Directive 97/52 ([1997] OJ L328/1);
(iii)	Council Directive 92/50 relating to the coordination of procedures for the award of public service contracts ([1992] OJ L209/1) as amended by 97/52 ([1997] OJ L328/1);
(iv)	Council Directive 89/665 on the coordination of laws, regulations and administrative provisions relating to the application of review procedures to the award of public supply and public works contracts ([1989] OJ L395/33) as amended by Directive 92/50 above;
(v)	Council Directive 93/38 coordinating the procurement procedures of entities operating in the water, energy, transport and telecommunications sectors ([1993] OJ L199/84) as amended by Directive 94/22 ([1994] OJ L164/3) and Directive 98/4 ([1998] OJ L101/1); and
(vi)	Council Directive 92/13 coordinating the laws, regulations and administrative provisions relating to the application of Community rules on the procurement procedures of entities operating in the water, energy, transport and telecommunications sectors ([1992] OJ L76/4).

This EU legislation is implemented in the law of the United Kingdom by the following regulations:

(i)	The Public Works Contracts Regulations 1991 ((SI 1991 No. 2680), as amended);
(ii)	The Public Supply Contracts Regulations 1995 ((SI 1995 No. 201), as amended);
(iii)	The Public Services Contracts Regulations 1993 ((SI 1993 No. 3228), as amended);
(iv)	The Utilities Contracts Regulations 1996 (SI 1996 No. 2911).

ENGLISH CONTRACT LAW

As discussed above, the English law of contract derives mainly from the common law (as opposed to statute)—there is no code or single source which sets out the various rules. There are also some statutory provisions which are relevant. This Module gives an overview of the main areas in English contract law but does not cover all the various (often complex) relevant areas.

Creating a contract

Agreement

There are three basic essentials to create a contract:

• agreement;

• contractual intention; and

• consideration.

Normally the question of whether the parties have agreed something is tested by asking whether one party has made an offer which the other has accepted. Agreements may not give rise to a binding contract if they are incomplete or not sufficiently certain. The courts apply an objective test in deciding if the parties have reached agreement.

Offer

It is important to distinguish between offers, which can be accepted, and an “invitation to treat” which is an invitation to someone for them to make an offer, which the first party can then accept. An invitation to treat gives the party who issues the invitation control over when (and if) the contract is made. There is no requirement to have an invitation to treat: a valid contract can be formed when an offer is accepted. On auctions, it is the bid which is the offer.

Acceptance

An acceptance is agreement to the terms of an offer. Offers can be accepted by conduct. If someone purports to accept an offer, but does so on different terms, that will be a counter-offer, rather than an acceptance.

The acceptance must normally be communicated to the offeror. There are special rules for when an offer is accepted by post (the general rule is that acceptance takes effect when the letter is posted) or some instantaneous mode of communication, e.g. telephone or telex (where the normal rule—that the acceptance must be communicated—applies).

Generally, silence cannot be treated as an acceptance. In exceptional circumstances (for example, where the offeree has invited the offeror to ma...