John, the Matière SAS v ABM Precast Solutions Ltd case has attracted a lot of attention in the construction sector. Can you briefly explain the background of this dispute and why it was significant?

Certainly. It’s a case concerning the collapse of a joint venture between French construction firm Matière (the Claimant) and UK-based ABM Precast Solutions (the Defendant) after their unsuccessful bid for a major HS2 tunnelling subcontract. The High Court rejected ABM’s counterclaim, which alleged that Matière’s breach of agreed good faith obligations during the tender process destroyed what it claimed was a “virtually certain” chance of winning the contract, resulting in lost profits of up to £18.92m.

The Judgment provides clarification on the use and interpretation of good faith clauses in construction projects and the approach courts take to loss of chance claims in the construction industry.

The judgment concerned also touched on “good faith” obligations in joint ventures. From your perspective, what does “good faith” mean in practical terms for contractors working together on major projects?

It is about the parties working cooperatively together in an open and transparent way. Also about them co-operating at all times and seeking as far as possible not to cause any breaches of their respective duties which could cause loss and/or damage to the other parties.

Do you think this ruling has shifted the way courts are likely to interpret good faith clauses, or does it reinforce existing case law?

It is the first case that I am aware of that has considered the position of good faith obligations in a construction contract. Therefore it has provided some welcome guidance on the way courts will deal with such cases and is helpful in highlighting the challenges of proving causation in such cases and the evidence that will be required.

The court highlighted the highly competitive nature of procurement processes. How should contractors realistically assess their chances of success when pursuing such bids, especially when considering the risk of disputes later on?

Where bids are being undertaken on a joint venture basis, the parties have to really know their joint venture party and work extremely closely to utilise and demonstrate the benefit of their partnership. If they cannot do that, their chances of success are more likely to be limited.

In your experience, what steps can joint venture partners take during long bidding processes to protect themselves from potential disputes of this nature?

Do exactly what their agreement provides for and as above, co-operate on an open and transparent basis. Also, address and resolve any issues that arise immediately rather than letting them fester.

Finally, what is the wider significance of this case for the construction industry, and how do you see it shaping the way contractors approach collaboration and dispute resolution in future?

The ruling underscores the difficulties in successfully pursuing high-value loss of chance claims, particularly in competitive bidding scenarios. ABM’s inability to prove that Matière’s conduct was the decisive factor in losing the HS2 subcontract proved fatal to its case. The judgment serves as a cautionary tale for joint venture partners, emphasising the need for clear evidence when alleging that a counterparty’s actions destroyed a valuable commercial opportunity. Contractors would be well advised to pay more heed to who they are going to get into bed with and ensure that each parties obligations are clearly defined, adhered to and followed through on.

John, the URS v BDW case has been described as a landmark judgment. Can you give us an overview of what the Supreme Court decided and why it matters?

Yes, certainly. This is a very important case. It concerns a developer’s ability to recover costs of voluntarily remediating dangerous defects in disposed-of properties from negligent design professionals. However, its effect was wider in informing that those further along the supply chain including contractors are equally caught by it.

This Judgment significantly lowers barriers for developers to recover remediation costs from the supply chain for historical building safety defects, even after disposal of the property and without awaiting third-party claims.

The Court confirmed that the 30-year retrospective limitation period introduced by the Building Safety Act applies not only to direct claims under the Defective Premises Act but also to onward claims in negligence or contribution. What does this mean in practical terms for contractors and consultants?

It clarifies that contractors and consultants are equally at risk of those claims being passed down or along the contractual chain and therefore at risk of retrospective claims being made against them.

The ruling also confirmed that developers are both owed duties under the Defective Premises Act and can also owe those duties to purchasers. How does this expand the potential scope of liability across the industry?

It basically clarifies that developers and their supply chain (including contractors and consultants) are all at risk if a valid DPA claim can be established.

From your perspective, does this case significantly shift the balance of risk in building safety disputes, or does it simply confirm what was already anticipated under the Building Safety Act?

I would suggest the latter. The Act is drafted in relatively broad terms and this case clarifies just how broad and wide.

For contractors in particular, what are the main takeaways? Should they now be actively reviewing old projects in anticipation of possible claims?

Yes, definitely. Developers will likely now start to review historical portfolios (potentially back 30 years) to identify properties where remedial works were/are required and assess potential recovery claims against the original supply chain. Contractors should reassess their exposure to historical building safety defect claims, considering the expanded 30-year window and the multiple viable claim routes confirmed by this Judgment.

Finally, what practical steps would you recommend contractors and developers take now to manage their exposure under the Defective Premises Act and the Building Safety Act in light of this judgment?

As above, Contractors should reassess their exposure to historical building safety defect claims, considering the expanded 30-year window and the multiple viable claim routes confirmed by this Judgment. I would also suggest that they review their current insurance and liaise with their brokers to see if they can effectively notify any such potential claims.

John Bradley provides legal advice to the NFB membership.