1. Court denies injunction preventing payment of performance bond
The recent High Court decision in CR Construction (UK) Company Limited v Barclays Bank PLC and Northern Gateway (FEC) No.7 Limited (as Intervenor) is a useful reminder of the very limited circumstances in which the Court will allow injunctive relief to prevent a bank paying out a performance bond.
The case related to a large residential and commercial mixed use development in Manchester (the “Development”). Northern Gateway (FEC) No.7 Limited (“NG7”) as Employer and CR Construction (UK) Limited (“CRC”) as Contractor entered into an amended JCT Design & Build Contract 2016 (“Contract”) for the Development for a contract sum of circa £117 million. The Contract required CRC to provide an on demand performance bond in the amount of £11,702,897.30 being 10% of the contract sum.
CRC failed to complete two sections of the Development by the contractually required date, for which the Employer’s Agent (“EA”) had issued non-completion notices. CRC had submitted applications for extension of time which had been rejected by the EA. The EA issued CRC a notice of liquidated damages payable to NG7 in the amount of circa £3.16m and in January 2025 issued a notice of termination for unrectified specified defects. CRC advised the EA that it considered the termination repudiatory and accepted it.
CRC commenced an adjudication in mid-January 2026 challenging the validity of the default and termination notices. In early January 2026, CRC made an application for an interim injunction against Barclays Bank PLC (“Bank”), the bond surety, to prevent it making payment. NG7 had given written notice of a claim under the bond in the amount of £2.475 million.
CRC claimed an injunction on 3 grounds:
- The requirements under the bond for notice of demand were not met;
- The bond was already discharged because of the repudiatory breach by NG7; and
- In any event nothing is due under the bond as there is a dispute as to quantum of the amount claimed and CRC has rights of set off against withheld retentions.
The Court refused the injunction application to restrain the Bank from making payment under the bond. The Court reiterated the American Cyanamid test for granting injunctive relief that (i) there be a serious question to be tried, (ii) that damages would be an inadequate remedy and that (iii) the balance of convenience is in favour of granting the injunction. The Court found CRC’s application fell at every hurdle.
Applying the first test, the Court found that CRC’s claim was misconceived as the established authority of Simon Carves Ltd v Ensis UK Limited [2011] EWHC 657 made it clear that a Court will not prevent a bank paying out under a bond where conditions for demand had been met unless there was evidence of fraud of which the bank was aware which was not the case here. Wider grounds that may allow injunctions against beneficiaries were not relevant against the Bank in the absence of fraud.
CRC’s argument that the demand requirements had not been met was also rejected. Although there were some procedural issues with the demand notices, when read as a whole it was clear it was a demand notice under the bond meeting necessary requirements. CRC’s claims that the bond had already been discharged because of repudiation were also rejected as the relevant clause under the bond stating that liability under the bond survives termination under the Contract fell to be read broadly to include repudiatory termination and not limited just to contractual termination. Damages were found to be inadequate given the cash flow implications for NG7 of granting the injunction. The Court found the balance of convenience in favour of rejecting the injunction given the potential wider reputational damage to the bond market and the delay of CRC in commencing the adjudication.
Tcase will serve as a useful reminder that there are only very limited circumstances in which Court will provide injunctive relief against payment of an on demand performance bond. Also, although not fatal in this case, it also reiterates the importance of strictly following all necessary procedures and requirements for making a demand under a performance bond.
CR Construction (UK) Company Ltd v Barclays Bank PLC [2026] EWHC 202 (TCC) (04 February 2026)
2. Unincorporated Joint Ventures (UJV) – Who is a “Party” for the purposes of Adjudication.
UJVs have become a common method to deliver particularly large and complex construction projects. This was the position in the recent case of Darchem Engineering Limited v Bouygues Travaux Publics and another where the Court had to decide if a constituent entity of a UJV could commence adjudication proceedings in its own name.
The case dealt with a subcontract for works at the Hinkley Point C Nuclear Power station in Somerset. The subcontract was between 2 UJV’s the first UJV formed the Contractor (“BYLOR”), between Bouygues Travaux Publics ("Bouygues") and Laing O'Rourke Delivery Limited ("LOR") and the second UJV formed the Sub-Contractor (“EDEL”) between Darchem Engineering Limited ("Darchem") and Framatome Limited ("Framatome"). The subcontract between BYLOR and EDEL was based on an amended NEC form (the “Subcontract”).
Darchem commenced 3 adjudications under the Subcontract in its own name stating it was as acting “jointly and severally as the Sub-contractor”. BYLOR challenged the Adjudicator’s jurisdiction on the basis that Darchem was not a Party to the Subcontract and could not bring an Adjudication in its own right. The Adjudicator rejected this assertion and the current case dealt with Darchem’s application for summary judgment enforcement of the Adjudicator’s judgment of circa £23.9m in the third jurisdiction.
The Court found that the question of jurisdiction then turned on whether one entity in a subcontracting UJV could bring an adjudication in its own name rather than together with the other party in the UJV.
Darchem’s main argument was that the first page of the Agreement listed all four entities and stated that "All of the above are together known as the 'Parties'". Darchem argued this was definitional and that each constituent entity was therefore a "Party" with independent standing to seek Adjudication. Darchem further relied on the fact that each constituent entity had executed the Subcontract as a deed.
BYLOR’s counter argument was that Article 1 of the Agreement stipulated that words and expressions shall have the meanings assigned to them in the conditions of subcontract. Clause 11.2(11) of the Sub-Contract clearly defined "Parties" as "the Contractor and the Subcontractor"—a bilateral definition referring to the UJVs as single entities, not their constituent members. BYLOR emphasised that the conditions of the subcontract consistently referred to "either party” and "the other" party, language consistent with there being only two parties.
The Court refused to enforce the Adjudicator's decision and found that Darchem was not a "Party" for the purposes of the dispute resolution provisions. Mr Justice Constable held that the Subcontract was drafted on a bilateral basis, with references to "either" and "both" parties consistent with there being two parties (the UJVs), not four individual entities. Crucially, termination clauses 91.1 and 91.2 contained deeming provisions treating "Party" as meaning each constituent company individually for specific purposes—the inference being that, absent such provisions "Party" elsewhere refers only to each UJV as a whole. No equivalent deeming language existed in the relevant dispute resolution clause of the Subcontract. The phrase "All of the above are together known as the 'Parties'" was properly construed as meaning the four entities together constitute the two Parties, not that each is a Party in its own right. The Subcontract was also clear that terms had the meanings as defined and clause 11.2 (11) was clear that a Party means each of the Contractor and Subcontractor UJV entities not their constituent entities.
This decision serves as an important reminder for parties contracting through or with an UJV in construction contracts to carefully consider drafting generally and definitions of parties and allocation of responsibility specifically. Where contracts are drafted on a bilateral basis—treating the joint venture as a single contracting entity—constituent members may find themselves unable to pursue individual claims unless the contract expressly confers such rights.
3. “Subject to Contract” reservations in settlement negotiations considered
The recent case of Baltimore Wharf SLP v Ballymore Properties Limited reinforced the significance of "subject to contract" reservations in settlement negotiations, confirming that such conditionality remains in place unless expressly or necessarily impliedly removed by all parties.
Baltimore Wharf SLP ("Baltimore") brought proceedings against Ballymore Properties Limited ("Ballymore") and WSP UK Limited ("WSP") following the collapse of a nursery roof at Baltimore Wharf, London in July 2023, claiming damages estimated at over £2 million. The proceedings had been stayed until 1 October 2024. In August 2024, the parties entered negotiations to settle the dispute, with Ballymore's solicitors circulating a draft settlement agreement expressly marked "Subject to contract and without prejudice save as to costs" on each page. Following several exchanges of the travelling draft (each iteration maintaining the "subject to contract" heading), on 24 September 2024 Baltimore's solicitor confirmed by email that "the Settlement Agreement with WSP's amends is agreed". Despite this confirmation, Baltimore never signed the execution version of the Settlement Agreement. Ballymore and WSP subsequently applied for summary judgment to strike out Baltimore’s action, arguing that a binding settlement had been reached on 24 September 2024.
The Court dismissed the application, holding that no binding settlement existed. Recorder Singer KC reaffirmed the principle from Joanne Properties Ltd v Moneything Capital Ltd [2020] EWCA Civ 1541 that once negotiations begin "subject to contract", that condition is carried through all negotiations unless all parties expressly agree to its removal or such agreement is necessarily implied. The Court found this to be a "high bar" and emphasised that courts "will not lightly so hold" that the reservation has been waived. Even where all substantive terms had been noted agreed by emails on 24 September 2024, this acceptance alone could not demonstrate that the "subject to contract" conditionality had been abandoned. The Court also considered whether post-agreement conduct could evidence an implied removal of the reservation, ultimately finding that the parties' behaviour—including agreeing to extensions of the stay of proceedings and requesting internal reviews before sign-off—was at best ambiguous and in places supportive of Baltimore's position.
Parties engaged in settlement negotiations should be aware that "subject to contract" language has significant and enduring effect. This case confirms that:
- A "subject to contract" reservation made at the outset of negotiations will remain operative throughout, attaching to all subsequent exchanges until expressly or necessarily impliedly removed by all parties.
- Confirming that "terms are agreed" will not, without more, remove the "subject to contract" umbrella—parties should not assume that reaching consensus on substantive terms creates a binding agreement where such reservations remain in place.
- To avoid uncertainty, parties wishing to enter into a binding settlement should either: (a) avoid using "subject to contract" language altogether; or (b) ensure that the removal of such conditionality is clearly and expressly communicated and agreed by all parties prior to or at the point of final agreement.
- Post-agreement conduct in accordance with a proposed agreed settlement may be considered by the court in determining whether a "subject to contract" reservation has been waived, but the bar remains high and each case will turn on its own facts.
Baltimore Wharf SLP v Ballymore Properties Ltd [2026] EWHC 312 (TCC) (16 February 2026)
4. Government publishes response to Autumn 2025 Late Payment Consultation
On 24 March 2026 the Department for Business & Trade published the Government’s response to the Late Payment consultation conducted last Autumn. The key point for the UK Construction industry is that the Government is planning to introduce legislation amending the Housing Grants, Construction and Regeneration Act 1996 (the “Act”) to prohibit the withholding of retentions. The Government has indicated it will have further consultation with industry regarding implementation, and this will likely include a transition period of 12-24 months once legislation is in place.
The response notes that there will be a need for changes to the surety market to support the construction sector and its clients if retentions are prohibited and will work with the financial sector to address this.
There are other general points affecting payment that will also be relevant to the construction industry include:
- A requirement that all commercial contracts will contain a right to statutory interest at 8% above the Bank of England base rate removing the ability for parties to agree an alternative remedy
- a requirement for large companies to report upon interest payments, including the value of interest that a company is liable to pay and the value of interest that has actually been paid
- to introduce a statutory time limit for raising disputes over invoices
- maximum payment term of 60 days between businesses, with limited exemptions
- make it a legal requirement for the boards or audit committees of large UK businesses who have made a significant proportion of their payments late within the reporting period to publish commentary on GOV.UK explaining how the company intends to improve its payment performance
- Enhanced powers for the Small Business Commissioner including powers of investigation, adjudication and to levy fines
It is unclear how some of these items will interact with the Act but the response notes that “Respondents from the construction sector highlighted the importance of alignment of the existing and well-established legislation for parties to a construction contract with this policy for stricter maximum payment term”. The Government acknowledges that this will be taken forward as part of the next steps.”
Late payment consultation: time to pay up – government response (web version) - GOV.UK
5. Government publishes Construction Products Reform White Paper and launches consultations
The Ministry of Housing, Communities and Local Government (MHCLG) has published a white paper setting out proposals for the reform of the UK construction products regime.
Key proposals within the white paper include:
- The establishment of a General Safety Requirement (GSR) for all construction products not already covered by existing regulations requiring a designated standard
- Maintaining alignment with EU construction product regulations
- That the envisaged single construction regulator will eventually have responsibility for construction product regulations as well as other responsibilities of the Building Safety regulator
- Enhanced enforcement powers and sanctions for the enforcing authority
- Improvement of product information and labelling
- Clear requirements for competence and accountability in respect of construction products
MHCLG has opened consultations on both the Construction Products White Paper and the GSR. Both consultations opened on 25 February and will run for 12 weeks until 20 May 2026.
Construction Products Reform White Paper - GOV.UK
General Safety Requirement for Construction Products - GOV.UK
6. UK Government publishes first annual Grenfell Tower Inquiry Progress Report
Following the Grenfell Tower public enquiry the UK Government promised to publish an annual report on its implementation of the Grenfell Tower Inquiry Phase 2 recommendations. The first such annual report is now published and states of the 61 recommendations in Phase 2 of the Inquiry 12 have been completed with the remaining 49 in progress.
While the report estimates that 70% of all recommendations will be complete by the end of 2026 several recommendations may be some years off such as licensing of principal contractors on Higher Risk Building schemes and certifying fire risk assessor competence.
In addition to the Annual report the Government also publishes quarterly progress reports with the next due in May 2026.
Grenfell Tower Inquiry Government Annual Report: February 2026 - GOV.UK
7. NISTA publishes Whole Life Carbon Management Handbook for the Built Environment
The National Infrastructure & Service Transformation Authority (NISTA) has developed a Whole Life Carbon Management Handbook to support project delivery practitioners and industry stakeholders to incorporate whole life carbon (WLC) management into common practice for the delivery of all projects. This should assist the built environment industry, one of the biggest contributors to UK carbon emissions, to increase efficiencies and productivity around decarbonization helping the UK Government in respect of its legally binding environmental targets. The Handbook addresses the importance of early-stage ambition setting, WLC assessments, and alignment with PAS 2080:2023, industry standards and the HM Treasury Business Case framework.
NISTA WLC Management Handbook 2025 v5 Clean HN.docx
8. BSI publishes new construction products safety standard PAS 2000:2026
The British Standards Institution (BSI) has published PAS 2000:2026 – Construction products – Bringing safe products to market – Code of practice. The voluntary code sets out recommendations for construction product manufacturers and other economic operators to demonstrate that reasonable steps have been taken to ensure construction products placed on the market are safe for their intended use.
Sponsored by the Office for Product Safety and Standards, the code outlines a due diligence approach aligned with Recommendation 3.3 of the Morrell-Day Review and aims to promote safety, transparency and continuous improvement throughout the construction supply chain.
PAS 2000:2026 introduces new guidance to help construction product manufacturers and stakeholders to evidence safety and compliance and to align process with established guidance on due diligence and accountability in construction product safety.
PAS 2000:2026 | 28 Feb 2026 | BSI Knowledge
9. Energy Performance Certificates (EPC): Government delays launch date for reforms until 2027
At the start of the year the MHCLG and the Department for Energy Security and Net Zero (DESNZ) published a partial response their December 2024 consultation on ‘Reforms to the Energy performance of Buildings Regime” which closed in February 2025. The partial response noted:
- domestic EPCs will replace the existing single cost metric with four new headline metrics: energy cost, fabric performance, heating system and smart meter readiness.
- commercial EPCs will maintain a single carbon-based Environmental Impact Rating as a single headline metric.
- the validity period for reformed EPCs will remain at 10 years
- a further response to outstanding consultant’s questions will be published later in 2026.
- following industry engagement, the launch of reformed domestic EPCs will be delayed until late 2027, rather than October 2026 as initially targeted.
Reforms to the Energy Performance of Buildings regime - GOV.UK
