Our global construction group advises on both contentious and non-contentious matters, supporting our clients throughout the full life-cycle of the construction project, from procurement, contract advice and coverage right through to successful dispute resolution, should they arise.<\/p>\n
Following the success of our first UK construction sector conference last year, our UK construction experts came together once again on Tuesday 27 January 2026 for a repeat performance. They were joined by key speaker, Rob Browning, Head of Legal, Gardiner & Theobald for a fireside chat with our very own Caitlin Galagher on risk management from an in-house perspective.<\/p>\n
Amid growing economic uncertainty and geopolitical turmoil, the UK construction sector faced rising costs, insolvencies, sustainability pressures, project delays and regulatory transformation in 2025.<\/p>\n
This summary accompanies\u00a0a recording of the event<\/a>\u00a0and provides a synopsis from our experts on the impacts of these challenges and how we can better manage these risks as we enter 2026. With more change to come, this year will evoke practical resilience required to navigate the continuing global uncertainty. However, more positively, output growth is forecast to accelerate by 10%, inflation is projected to ease toward 3.6% and interest rates are to stabilise near 4%.\u00a0 In this measured recovery climate, infrastructure and retrofit sectors are set to lead this upturn.<\/p>\n Key takeaways across the sector Speakers: Christopher Butler<\/a> and\u00a0Paul Carter<\/a><\/p>\n Increased risk for designers<\/p>\n The Building Safety Act 2022 (the Act) introduced new duties for designers. More recently, many of these are now being replicated within consultant appointments and collateral warranties. The Act also establishes stricter safety regulations, particularly relating to building materials, fire safety and structural integrity. Consequently, designers face an increased risk in ensuring that their designs and advice comply with these new standards.<\/p>\n We are already seeing many of the new obligations and requirements written directly into contracts such as the Principal Designer role, and with ever increasing scope, duties and responsibilities.\u00a0 In some cases, the contractual position is intentionally more onerous than the Act requires.\u00a0 This creates a material claims exposure \u2013 not only because it heightens the likelihood of claims, but also because such claims may fall outside the scope of professional indemnity insurance.<\/p>\n Firms should ensure that any contractual obligations they accept do not exceed those set out in the Act, to mitigate the risk of uninsured losses.<\/p>\n Gateway applications<\/p>\n The Building Safety Regulator is currently working through a backlog of Gateway approval applications for works (to ensure fire safety and building regulation compliance) and it is expected to take up until mid 2027 for the processes to flow smoothly. This is primarily due to operation challenges in processing these applications efficiently and inadequate submissions.\u00a0 The backlog has resulted in delays to the commencement of works on sites and subsequently effected lending and project programmes. Ensuring building regulation compliance has also resulted in delays to existing projects, as defective works have to be remediated mid-project and \u201cenhanced compliance\u201d sought often. This has also resulted in increased project costs and there is no doubt that claims will inevitably flow from these delays and increased costs.<\/p>\n Transfer of Building Safety Regulator (BSR)<\/p>\n The transfer of the BSR from the Health and Safety Executive (\u201cHSE\u201d) to a standalone body took effect on 27 January 2026.\u00a0 \u00a0Although the transferred BSR is now a standalone entity it is sponsored by, and will retain ultimate accountability to, the Ministry for Housing, Communities and Local Government. The transfer allows the BSR to enter into contracts, \u00a0employing staff\u00a0and be legally responsible in its own name. In the long term it is hoped this transfer will strengthen accountability and eventually establish a single construction regulator.<\/p>\n Elephant traps \u2013 common contractual traps for design professionals and contractors<\/p>\n Speakers: Scott McKinnell<\/a> and\u00a0Rachael Adekunle<\/a><\/p>\n Contract clauses that require closer scrutiny to prevent both contractors and design consultants from taking on onerous risks include:<\/p>\n Building Safety Act obligations: The employer is responsible for its own obligations under the Act. The contractor should not be liable for the employer\u2019s failure to achieve its obligations, even if it agrees to assist the employer in fulfilling its obligations<\/a>[AD1]<\/a> . Impacts of the Economic Crime and Corporate Transparency Act 2023<\/p>\n Speaker: Matthew Poli<\/a><\/p>\n Under the Economic Crime and Corporate Transparency Act, and as of 18 November 2025:<\/p>\n Mandatory identity verification is\u00a0required\u00a0for directors, persons with significant control (PSCs) and anyone filing information at Companies House on behalf of the company. ECCTA also brings in a new corporate offence \u2013 the failure to prevent fraud for large organisations meeting at least two of three criteria: (i) 250 employees, (ii) \u00a336 million turnover, or\u00a0(iii) \u00a318 million in total assets.\u00a0\u00a0<\/p>\n To manage these risks, Boards should:\u00a0<\/p>\n Review director and PSC information to ensure its correct and\u00a0up-to-date Continued supply obligations under the Insolvency Act 1986 \u2013 practical consequences for construction companies<\/p>\n Speaker: Darren Bradshaw<\/a><\/p>\n Section 233B of the Insolvency Act 1986 may be used (a) to render ineffective termination clauses on an Employer\u2019s insolvency (b) prevent termination due to a pre-insolvency breach and (c) prevent creditors making payment a condition of continued supply in an insolvency scenario.\u00a0 A supplier should therefore:<\/p>\n Consider the \u00a0definition of \u201cinsolvency\u201d in contracts Adjudication: the good, the bad and the ugly<\/p>\n Speakers: Sarah Mather<\/a>,\u00a0Lee Cooper<\/a> and\u00a0Christopher Butler<\/a><\/p>\n The good<\/p>\n It is a cheaper and faster dispute resolution process The bad<\/p>\n It is used less for cashflow issues (i.e. its original purpose) and increasingly more for the resolution of complex issues, including professional negligence claims. Prepare, prepare, prepare<\/p>\n Negotiate a reasonable timeframe with your opponent for all steps as early as possible upon receiving the Notice of Adjudication Avoiding the fall: managing CDM duties, work at height risks and contractual responsibilities<\/p>\n Speaker: Joe McManus<\/a><\/p>\n Key basis for claims against the company<\/p>\n The construction parties most likely to face a personal injury claim are the client, contractor or principal contractor, depending on the extent of their duties under the Construction (Design and Management) Regulations 2015.\u00a0 Practical considerations<\/p>\n Check that the policy responds and whether the insured should be notifying the loss under any other policy \u2013 project policy? Vicarious Liability \u2013 a settled subject?<\/p>\n Speaker: Joe Lewin<\/a><\/p>\n What can an employer be liable for?<\/p>\n Recent case law suggest that vicarious liability is not simply settled law. The court is incrementally tightening its control on what conduct it is willing to hold an employer for and we may see further controls placed by the court in what it will allow to satisfy the legal test for vicarious liability.\u00a0 New rules, real risks: the latest in health and safety law<\/p>\n Speakers: Kadie Cooper<\/a> and\u00a0Marta Tomlinson<\/a><\/p>\n Latest update in the context of the construction sector<\/p>\n Of all industries, the construction sector has the highest rate of work-related musculoskeletal disorders (2023\/24 -2024\/25 figures).\u00a0 A view from In-house<\/p>\n
\nTransitioning from post Grenfell cladding claims to Building Safety Act claims \u2013 a defence lawyers\u2019 perspective<\/p>\n
\nFitness for purpose: The market standard insurable for design liability is limited to the reasonable skill and care to be expected of a properly qualified, experienced and competent member of its profession experienced in carrying out services of a similar scope, size, nature, timescales and complexity to the project. Design liability wording exceeding this can confer implied fitness for purpose obligations.
\nCopyright licence: The contractor can only give a licence within the perimeters of the licence it has in its possession. This rarely includes a perpetual or exclusive licence. Therefore, licences that include this wording should be avoided.
\nExtension of time (EOT): The contractor should be entitled to an EOT for any delay to key dates or completion caused by events for which the contractor is not solely and directly liable.
\nAbsolute obligations: Strict obligations are unlikely to be insured, exposing the consultant\/contractor to uninsured losses, unless they are statutory obligations that relate to the consultant\u2019s discipline.
\nUnlimited and undefined Collateral warranties: If there is no cap on the number of collateral warranties the client can request, this widens the consultant\u2019s scope of liability. The warranty should also be in a particular form agreed in advance.
\nFees: The consultant should be entitled to extra monies for additional services that arise due to matters out of its control and matters that give rise to loss and expense.<\/p>\n
\nExisting directors and PSCs must verify their identity by the date of their company\u2019s first confirmation statement filed after 18 November 2025.
\nThe company must register an email address with Companies House and keep it updated.\u00a0<\/p>\n
\nPrepare for identity verification requirements now
\nAudit Companies House filings for accuracy
\nReview group and ownership structures
\nAssess fraud risk and prevention controls\u00a0<\/p>\n
\nReview payment periods to reduce risk
\nReduce contractual obligations
\nReview security provisions\/credit insurance
\nConduct closer monitoring of solvency and breaches
\nCheck Retention of Title provisions<\/p>\n
\nConfidential (to a degree)
\nBest forum for discrete issues and can result in a wider settlement
\nNo counterclaims
\nDifficult for defendants due to time constraints, which can be used tactically
\nQuality of adjudicator\u2019s is generally good, especially when they can be agreed between the parties.
\nThe parties respect the process and do pay out<\/p>\n
\nLegal costs can \u2018rack up\u2019 quickly and they will not be recoverable inter partes.
\nIt is an extremely fast paced process, which means there can be significant time pressures on clients and witnesses.
\nAdjudication can sometimes feel like \u2018rough justice\u2019.<\/p>\n
\nSeek to agree an adjudicator with your opponent to minimise any jurisdiction issues
\nRequest disclosure, site visits and hearings for the adjudicator to ask questions, particularly of experts to help narrow the issues in dispute. These steps can be used to apply pressure \u2013 especially when other lawyers offer fixed fees
\nReply promptly to emails to any adjudicator in case he \/ she gives a direction before you have your say.<\/p>\n
\nClaimants will typically rely on a breach of regulations (eg Work at height, Management of Health & Safety at work, Provisions of use of work equipment) as evidence of negligence.
\nConsideration of apportionment of liability or contributory negligence should take into account the statutory duties of the parties.<\/p>\n
\nConsider the extent of control exerted by the insured over his work \u2013 this is likely to be relevant to policy response
\nIf the claimant was essentially\u00a0 a \u201cde facto employee, the company are likely to owe the same duty as that owed to its contractual employees.
\nConsider seeking an indemnity\/contribution from the relevant party.
\nFor low value claims, be cautious about admitting liability purely for commercial reasons as these may later \u201cescalate\u201d.<\/p>\n
\nParticularly in relation to the second stage of the legal test for vicarious liability – namely demonstrating \u201csufficient closeness\u201d between the wrongdoing and the actions authorised within the wrongdoers employment \u2013 we may well see greater attention paid to this by parties and the Court where vicarious liability arises as an issue.
\nThe small but growing caselaw in this area makes clear that great attention should be paid to understanding both the contractual and practical roles and responsibilities of \u201cemployees\u201d and how this may affect an employers liability in the event of an injury suit.<\/p>\n
\n124 fatal accidents in the workplace in 2025, 35 of which were in construction with falls from height being the most common cause.
\nThe government has published their second and third progress reports on implementation of the Grenfell Tower Phase 2 Report (the Phase 2 Report) recommendations and there will be major reform impacting the sector in the next few years. Of these, the two key impacts are
– The appointment of a single construction regulator
– Regulation of fire engineers
\nConstruction parties will need to ensure that their compliance strategies and policies include measures to manage the risks of the above changes and all changes recommended in the Phase 2 Report.<\/p>\n