Legal developments in construction law: November 2025
1. Adjudicator’s jurisdiction to order payment of an interim application notified sum within a True Value Adjudication
The recent case of VMA Services Limited v Project One London Limited [2025] EWHC 1815 (TCC) reinforced the required payment of notified sums due under the Housing Grants, Construction and Regeneration Act 1996 (the “Construction Act”) notwithstanding any ongoing true value adjudication (“TVA”).
VMA Services Limited (“VMA”) were engaged by Project One London Limited (“POL”) under a mechanical and electrical sub-contract (based on the JCT sub-contract form) for works in Chelsea. VMA submitted a Payment Application in June 2024 (“PA8”) and POL issued neither a Payment Notice or Pay Less Notice. The sums in PA8 remained outstanding and POL issued a TVA for an assessment of PA8. VMA raised as a defence that the sums due under PA8 had become a notified sum under the sub-contract, and within the meaning of the Construction Act, and were therefore payable to VMA. The Adjudicator agreed and issued judgement for payment of the notified sum and did not consider the TVA. VMA sought summary judgement to enforce the Adjudicator’s decision and POL claimed that the Adjudicator exceeded its jurisdiction in ordering payment.
The Court agreed with the Adjudicator and found that a valid application for payment had been made, that the sums due under PA8 were notified sums due and payable by POL and that VMA were entitled to raise the same as a defence to a TVA.
VMA Services Ltd v Project One London Ltd [2025] EWHC 1815 (TCC) (18 July 2025)
2. Enforceability of similar but separate Adjudications by the same Adjudicator
The Courts recently considered the enforceability of two decisions by the same Adjudicator under similar but separate Adjudications, for works on the same project, when challenged on grounds of natural justice and jurisdiction.
Davis Construction (South East) Limited (“Davis”) had engaged Construction Muzzy Limited (“Muzzy”) for works in Essex under two separate construction sub-contracts for “groundworks” and “drainage works”. Muzzy was asked to cease all works and then conducted Adjudications under both contracts for unpaid sums. Muzzy sought enforcement of the Adjudicator’s decision in its favour which Davis resisted, claiming breaches of natural justice and lack of jurisdiction in the later adjudication.
The Court found for Muzzy on all grounds and enforced the Adjudicator’s decisions under both Adjudications. The Court found no breach of natural justice in the initial groundworks Adjudication. The Court also held the Adjudicator was not required to resign from the subsequent drainage works Adjudication as the disputes were under related contracts but with individual facts and were not just a re-adjudication of the same dispute. The Court also did not give weight to Davis’ assertion that there was a breach of natural justice in the drainage works adjudication with the result being “pre-determined” as Davis did not participate in the Adjudication or provide the Adjudicator evidence for consideration.
3. Collateral Warranties and extent and duration of liability
Collateral warranties will be a familiar document to those involved in construction projects. These separate contracts are a common tool for imparting enforceable rights relating to works to interested parties, such as purchasers and funders, who would otherwise not have any such rights. The Scottish Inner House of the Court of Session recently heard an appeal case addressing the scope and duration of liability under collateral warranties.
This case involved works at Union Plaza in Aberdeen (the “Property”) which works reached practical completion in July 2008 and a certificate of making good defects was issued in December 2013. The original developer Stewart Milne Central Limited sold the property to an intragroup company UPLP in August 2008, who in turn sold it to Legal and General Assurance (Pensions Management) Limited (“L&G”) in December 2013. As a condition of sale to L&G the construction team were to provide collateral warranties to L&G and the architect Halliday Fraser Munro (“HFM”) executed such a collateral warranty in January 2014 (the “Warranty”).
While some defects in the works were known on purchase, further defects were established post-acquisition and L&G sought to claim against HFM under the Warranty. The trial judge allowed the claim and HFM appealed. HFM claimed in defence:
- L&G had no right to claim under the Warranty as it was dated post L&G’s acquisition of the Property and breach of the Warranty did not cause the loss; and
- Even if L&G could claim under the Warranty it was time barred from doing so as that statutory period of 5 years under the Scottish law of prescription had expired.
The Court did not agree with either assertion and dismissed the appeal. On the first point the Court found the commercial nature of a collateral warranty was a separate contract promising, amongst of things, the conduct of the warrantor’s services to a specified standard. To suggest that the promise was not enforceable as it arose post purchase would be to allow claims to fall in a “black hole”. On the second point the drafting of the relevant clauses in the warranty related to having no greater “duties and obligations” under the Warranty than under the Appointment did not address liability in duration or extent or include an equivalent rights of defence clause. As a result, the Warranty was a separate contract commencing a fresh limitation period within which the claim arose.
Although a ruling of the Scots courts is of persuasive not binding authority south of the border, it may be applied by English courts and underlines the importance of ensuring that the drafting in collateral warranties clearly reflects the agreed liability position from the warrantor to the beneficiary and any agreed limitations on liability in scope or extent are covered
4. Building Safety Act 2022 (“BSA”) Gateway 2 Progress and CLC Guidance
The Building Safety Regulator (“BSR”) on 22 October 2025, released an update on the progress of the Gateway 2 (“GW2”) approvals process for Higher Risk Buildings (as defined in the BSA). The October update highlights:
- the increasing rates of GW2 decisions, up 111% since the period January to March 2025;
- the establishment of a new central Innovation Unit (IU) a dedicated central resource managing new build GW2applications and currently meeting or bettering the 12 week processing targets;
- the BSR aims to resolve the outstanding 91 historic applications under the previous system by January 2026
Building Safety Regulator: October 2025
Building Control Approval application data - Making Buildings Safer
The BSR’s October update follows the Construction Leadership Council’s (“CLC”s) July 2025 issue of its guidance for GW2 Applications aimed at giving direction on how GW2 applications should be approached and the level of design and clarity required. The guidance was produced in collaboration with the BSR and is intended to provide baseline principles relating to the preparation and submission of GW2 applications and practical recommendations on the approach and submission of relevant information.
5. Planning & Infrastructure Bill amendments
Developers across several sectors have longed bemoaned the UK planning process with complaints that it is unduly lengthy and burdensome. As part of its overhaul of the planning process the Government has recently announced several proposed changes to the draft Planning and Infrastructure Bill to allow Britain to “Build, Baby, Build” according to the Housing Secretary Steve Reed. Reforms to the planning process will be key if the government is to achieve its target of 1.5 million new homes in the life of this Parliament. The changes to the draft bill have been announced late in the progress of the bill through the House of Lords ahead of the final approval process expected in November 2025.
Key proposed changes to the draft bill focus on house building, clean energy and water security including:
- Rights for Ministers to block Local Authorities rejecting applications while Ministers consider using call in powers.
- Speeding up approvals for large reservoirs including allowing non-water sector companies to submit applications to build them.
- Prevent planning permissions being “timed out” as a result of lengthy judicial reviews.
- Securing permission for more onshore windfarms securing and an additional 3GW of capacity
- Changing the role and responsibilities of Natural England to give greater discretion to focus on more complex applications
Pro-growth package unshackling Britain to get building - GOV.UK
Guide to the Planning and Infrastructure Bill - GOV.UK
6. Late Payments consultation
The Department of Business & Trade’s (“DBT”) recent consultation on late payments in the UK economy closed at the end of October 2025.
Late payment has long been an issue in the construction sector and was a main reason for some of the legislative changes implemented by the Construction Act.
Amongst the consultation’s eight proposals to address late payment were two specifically regarding retentions in the construction sector, namely:
- A proposal to prohibit the use of retention clauses outright in construction contracts, preventing Employers from deducting and retaining a percentage of sums due pending works completion and defect refection; and
- Introducing requirements to protect retention funds from insolvency and late / non payment
Both the proposed changes above would require changes to the Construction Act with the former imposing an outright ban on retention clauses such as the Construction Act already imposes on “pay when paid” clauses. The second change would allow for the use of retention clauses in construction contracts but impose strict requirements on the treatment of any retained funds such as their segregation into a separate bank account, treatment of interest as owing to the payee and automatic release of such sums unless required notification is made.
While changes as above may be welcomed by Contractors they are likely to be lamented by Developers and Funders who use retentions as security and incentive for performance and rectification of defects. Changes such as those in the second proposal would add administrative and cost burdens to the operation of construction contracts.
The DBT intends to publish the outcome of the consultation within 12 weeks of its closure, meaning it should be expected by mid-January 2026, at which point any proposed legislative changes should be clearer.
Late payments consultation: tackling poor payment practices - GOV.UK
