Navigating Legal Challenges in Data Centre Operations

Data centres are crucial to the digital world we live in. They support everything from storing our photos and files in the cloud to making sure we can send emails across the globe in seconds. But running a data centre isn’t simple, especially when you consider the maze of laws and regulations that come with it. This is where having a great lawyer that understands the data centre industry can make a big difference for data centre owners and operators. We look in further detail at the role our lawyers play in advising datacentres.

Understanding the Legal Terrain for Data Centres

The legal world surrounding data centres is complicated. It covers a lot of ground, from the specifics of property and building laws to the details of data privacy and cybersecurity rules. Add to this the mix of local, European, and international regulations, and it’s clear why expert legal advice is critical.

For example, data privacy laws, especially with the EU’s GDPR, have set strict rules on how personal data should be handled. This doesn’t just affect companies in the EU; it also impacts any company dealing with EU citizens’ data. Knowing these laws inside out is crucial for avoiding legal issues and fines.

Focus on Sustainability and Energy

Data centres use a vast amount of energy, which puts sustainability and energy efficiency in the spotlight. Navigating the legal landscape here is essential for tapping into renewable energy incentives and meeting sustainability goals, such as those outlined in the European Green Deal and the UK’s net-zero emissions target by 2050. For more information on the latest regulations impacting Datacentres see here.

More Than Just Compliance

Commercially minded lawyers do more than ensure you’re following the law. They’re also strategic advisors, helping with growth and managing deals. This includes everything from buying properties, negotiating leases and construction deals, to getting the necessary permits for expanding your data centre. With the growing interest in investing in data centres, having the right legal advice is crucial for making deals, negotiating contracts, and doing due diligence to protect your interests.

Tackling Data Sovereignty and Emerging Tech Challenges

Laws around data sovereignty, which govern where data can be stored and processed, add another layer of complexity, especially for data centres operating across borders. Plus, new technologies like 5G and the Internet of Things are creating fresh legal challenges, from telecoms licensing to questions around artificial intelligence and data ethics.

Leveraging Legal Expertise

Having a great lawyer who understands data centres isn’t just about solving legal problems. It’s about combining knowledge in technology, law, and strategy to help your business stay ahead. It’s about seeing legal expertise not just as a necessity but as a strategic advantage, making sure your operation is ready for the future.

At Conexus Law, we aim to provide comprehensive legal advice that covers every aspect of running a data centre. From planning and site acquisition to construction, leasing, and finance, we have the expertise and industry connections to help you move quickly and efficiently through negotiations and to focus on what really matters. We’re enthusiastic about data centres, their global significance, and staying on top of sector innovations, ensuring our clients are well-equipped to thrive in the digital age.

Sustainable Data Centres: Navigating Regulations and Innovations for a Greener Future

In the ever-evolving landscape of technology, the drive towards sustainability has become not just a goal but a necessity. This is especially true for data centres, which are often described as “the backbone” of our current digital landscape. These facilities, critical for storing, processing, and disseminating vast amounts of data, consume a significant amount of energy ( with sources reporting that they account for around 4% of Global Energy Consumption)* making them prime candidates for green measures. Recent regulatory changes have emphasised the urgent need for these measures and the importance of adopting sustainable practices within data centres globally. As we delve into the complexities and challenges that data centre operators face today, it’s crucial to recognise the innovations and strides taken toward a more sustainable future.

Recent Regulatory Changes: A Catalyst for Action

EU Regulations
In the face of climate change, governments and regulatory bodies worldwide are tightening the reins on emissions and energy consumption. The EU, for example, has been at the forefront with its ambitious Green Deal, aiming to make Europe the world’s first climate-neutral continent by 2050. This broad legislative framework directly impacts data centres alongside other sectors, mandating significant reductions in carbon footprints, increased reporting and disclosure under the Corporate Sustainability Reporting Directive (CSRD) and increased renewable energy targets under the recast Renewable Energy Directive (RED III).
In addition, the EU very firmly has the data centre sector more specifically in its sights with the EU Commission adopting on 15 March 2024 a new an EU-wide scheme to rate the sustainability of EU data centres as foreseen under the recast Energy Efficiency Directive (EED). Under the scheme data centres will be required to publish information on their energy performance and sustainability and this information, along with KPIs, will form part of an EU database. The delegated regulation, which defines the initial sustainability indicators that will be used for the rating of data centres, requires data centre operators to report the key performance indicators to the European database by 15 September 2024 and then by 15 May in 2025 and subsequent years.
The new scheme is part of ‘promoting climate-neutrality actions for the IT sector’ foreseen in the EU Commission’s Action Plan for the Digitalisation of the Energy Sector, issued in October 2022. It is intended to increase transparency and potentially to promote new designs and efficiency developments in data centres that can not only reduce energy and water consumption, but also promote the use of renewable energy, increased grid efficiency, or the reuse of waste heat in nearby facilities and heat networks.
The EU’s Corporate Sustainability Due Diligence Directive (CSDDD) was also adopted by the EU Council on 15 March 2024 paving the way for it to be passed into law in a European Parliament vote currently scheduled for April.
After significant last minute setbacks and negotiations between member states it now requires EU-based companies with global turnover of at least €450m and 1000 employees to identify, mitigate and prevent negative impacts on human rights and the environment in their upstream and downstream supply chains, or risk being fined up to 5% of net turnover.

Regulations and updates in the UK
Whilst in the UK there are fewer regulations currently specifically targeting sustainability in the sector there are plenty of general regulations which already impact data centre operators including the Building Regulations in England and the Minimum Energy Efficiency Standards (MEES) both of which were tightened in 2023. The Energy Act 2023 provided powers for government to implement heat network zoning in England through regulations which will impact the sector amongst others and there are the existing voluntary schemes such as the Climate Change Agreement for Data Centres which sets out specific targets for energy efficiency, encouraging operators to adopt greener practices or face stringent penalties.
Large UK companies are already required to report publicly on their UK energy use and carbon emissions within their Directors’ Report under the Streamlined Energy & Carbon Reporting (SECR) framework implemented by the Department for Business, Energy and Industrial Strategy (BEIS) but as most operators in the sector operate internationally it is already more likely than not that operators in the UK will be looking to comply with the various more prescriptive EU regulations from the start.

US Initiatives
Across the pond, the United States is also stepping up its game building on previous voluntary initiatives such as the Energy Star certification for data centres, a voluntary labelling programme providing certification for qualifying data centres, and the Department of Energy’s Better Buildings Challenge designed to encourage facilities to improve their energy efficiency and reduce their environmental impact.

On 6 March 2024, the US Securities and Exchange Commission (the SEC), approved final rules requiring companies to disclose certain climate-related information in registration statements and annual reports. Whilst on March 15, 2024, the US Court of Appeals for the Fifth Circuit granted an administrative stay of the final rules in response to a request for review and therefore there is still some uncertainty regarding the implementation of the rules (both in terms of timing and the exact details of the rules) the direction of travel is still pretty clear and will define a new standard for data centre regulation in America.

All these regulatory changes in different parts of the world, though challenging, serve as a necessary push towards innovation and sustainability in the global data centre industry.
Compliance is now a watchword for the sector in the EU in 2024 and beyond not just for the purposes of regulatory compliance but also because customers, investors and the most talented employees are increasingly focused on the sustainability practices and ambitions of data centres. There are huge opportunities for data centre operators to turn compliance into a competitive advantage.

Embracing Green Measures: Where Theory Meets Practice

Acknowledging the necessity is one thing; implementing practical solutions is another. The journey towards sustainability requires a multifaceted approach, combining advanced technology, innovative design, and strategic planning. Let’s explore how some data centres are leading by example, not just in adopting green measures but in setting new standards for the industry.

The EcoDataCentre in Falun, Sweden, stands as a paragon of sustainability. It’s the world’s first climate-positive data centre, leveraging 100% renewable energy sources and a highly efficient cooling system that uses the cold Nordic air. What sets it apart is its integration with the local community’s energy system, where excess heat generated by the data centre is repurposed to warm surrounding buildings, highlighting a symbiotic relationship between technology and the environment.

Elsewhere in Europe, the Amsterdam Data Tower embodies efficiency and green technology. It also boasts an advanced cooling system that uses outside air and recycles waste heat, supplying it to nearby greenhouses. Furthermore, it’s powered by renewable energy, making sustainable operation possible without compromising on performance. The Google data centre in Hamina, Finland, is another notable example – utilising sea water from the Gulf of Finland for its cooling needs, significantly reducing its energy consumption.

Meanwhile, in the United States, data centres are also embracing the green revolution. Facebook’s data centre in Fort Worth, Texas, for example is supported by 100% renewable energy and aims to be water positive by 2030 – restoring more water than it consumes.

The Path Forward: Sustainability as a Competitive Advantage

The transition to greener data centres is not just an ethical or regulatory imperative but a strategic business move. In an era where consumers are increasingly conscious of their environmental impact, companies that demonstrate a genuine commitment to sustainability stand to gain a competitive edge. Investors are increasingly attracted by sustainable business practices and commitments for future innovation. This shift is already evident, with a growing preference for green cloud services and sustainable data storage solutions among both individuals and corporations.

Moreover, sustainable practices can lead to significant cost savings over time, particularly in terms of energy consumption and operational efficiencies. By investing in advanced cooling technologies, renewable energy sources, and energy-efficient infrastructure, data centres can reduce their overheads while simultaneously enhancing their corporate reputation.

Sustainability : A challenge and an opportunity

The increasing need for sustainability measures in data centres is both a challenge and an opportunity. As we’ve seen, recent regulatory changes across the globe are pushing the industry towards a greener future. Examples from the UK, Europe, and the US highlight the innovative approaches being taken to minimise environmental impact while maintaining, if not improving, operational efficiency.

For data centre operators the message is clear: sustainability is no longer an optional extra but a crucial component of strategic planning and operations. By embracing green measures, investing in sustainable technologies, and fostering a culture of innovation, data centres can not only comply with regulatory demands but also lead the way in the global shift towards a more sustainable and environmentally responsible technology sector.

As we look to the future, it’s evident that the data centres that thrive will be those that view sustainability not as a burden but as an opportunity to innovate, differentiate, and contribute to a more sustainable world.

*Source: Engie Global Energy Report

Exploring the latest developments in sporting venues

As the world of sports evolves, so does the need for state-of-the-art stadiums and arenas. From design and materials to technology and sustainability, the construction industry is constantly innovating to deliver venues that meet the demands of athletes, fans, and the environment. In this article, we will explore the latest developments in sports stadium and arena construction in the UK, Europe and around the world.

Design and Materials

Gone are the days of plain, utilitarian sports venues. Today’s stadiums and arenas are architectural marvels that blend function with form. In the UK, Tottenham Hotspur’s new stadium is a shining example of design innovation. The 62,000-seat stadium boasts a retractable pitch that allows for the installation of a synthetic NFL playing surface for games played in London. The venue also features a glass-walled tunnel that leads from the locker room to the field, giving fans a unique view of the players.

Another trend in stadium design is the use of sustainable materials. Many stadiums are now incorporating recycled materials into their construction, as well as using locally-sourced materials to reduce transportation emissions. The recently opened Allianz Field in Minnesota, USA, is the first stadium in the world built entirely from sustainably-sourced timber.

Technology

Technology has had a significant impact on the construction of sports venues. From augmented reality and 3D printing to drones and robots, innovative technologies are streamlining the construction process and enabling the creation of complex designs that were previously impossible.

One example of this is the new Las Vegas Raiders Stadium in the USA. The stadium features an advanced security system that uses facial recognition technology to monitor fans entering the venue. The system uses cameras that can scan thousands of faces per second and can detect anyone who is on a banned list. This technology not only enhances security but also speeds up entry times for fans. This technology has also been deployed at selected locations near to “high risk” fixtures in the UK for the same purpose but as yet does feature permanently in UK arenas.

Sustainability

Sustainability has become a critical consideration in sports stadium and arena construction. Venues are now designed with energy-efficient lighting, heating, and cooling systems to reduce energy consumption. Many stadiums are also using renewable energy sources such as solar power to reduce their carbon footprint.

In Europe, the Allianz Arena in Munich, Germany, is a prime example of a sustainable stadium. The venue features an outer shell made up of over 2,800 air-filled ETFE cushions that regulate the temperature inside the stadium. The roof of the stadium is also fitted with solar panels, which generate renewable energy that can power the stadium and nearby buildings. The Nef stadium in Istanbul, Turkey recently broke the Guinness World Record for the most solar power output from a sports facility, generating enough renewable electricity to power 2,000 homes.

As sports continue to captivate audiences around the world, the demand for innovative stadiums and arenas is set to grow. Construction professionals are rising to the challenge, using the latest materials, designs, and technologies to deliver venues that are sustainable, secure, and stunning.

UK AI Policy: Exploring the Policy and Its Implications

In an era dominated by technological advancements, the integration of Artificial Intelligence (AI) into various aspects of our lives is rapidly gaining momentum. The United Kingdom, recognising the significance of this transformative technology, is embarking on a comprehensive journey to revamp its digital landscape. As a follow-up to our article in May, ‘Navigating the Legal Landscape of Artificial Intelligence in the UK’, this article delves further into the UK’s current AI policy and its broader implications within the ongoing digital transformation.

The UK’s new regulatory framework for AI is more than just a standalone initiative. It is intricately woven into broader digital reforms that span online safety, content moderation, and data protection rules. The aim is to establish a “proportionate… and adaptable” approach to AI, as recently stated by AI Minister Jonathan Berry. This approach reflects the UK government’s commitment to fostering AI innovation while ensuring the well-being of its citizens in this evolving technological landscape.

In a recent debate in the House of Lords, Berry shed light on the alignment between the UK’s light-touch proposals and the legislative process. The AI white paper, ‘A pro-innovation approach to AI regulation’, published in late March this year, forms the foundation of these proposals. This holistic approach seeks to create a symbiotic relationship between the evolving legislation and the dynamic AI landscape.

However, the discussions within the parliamentary corridors reflect the evolving nature of this policy. Lawmakers, acknowledging the need for AI-specific legislation, are exerting pressure to introduce critical safeguards and safety measures. Berry acknowledged this pressure and emphasised the government’s readiness to adapt its approach to ensure responsible AI innovation. He stated, “We are unafraid to take further steps if needed to ensure safe and responsible AI innovation.”

The dynamism of the AI policy is further highlighted by an upcoming review scheduled for this autumn. As the government’s last legislative program of the 2022-23 parliamentary session is set to be unveiled in November 2023, there is a growing push to include legislation to regulate AI. Prime Minister Rishi Sunak’s stance, however, suggests focusing on existing regulatory channels for early AI development, underlining the nuanced considerations that underpin this policy.

Notably, the government has faced critique for what some perceive as a relaxed approach to AI regulation. Timothy Clement-Jones, the Co-Chair of the All Party Parliamentary Group on Artificial Intelligence, criticised the “toothless exhortation” by sectorial regulators to adhere to ethical principles, calling for a more comprehensive and cross-sectorial approach to regulation.

This sentiment aligns with the perspective of Tina Stowell, Chair of the Communications and Digital Committee. Stowell, leading an inquiry into large language models, urged lawmakers to view AI regulation through a balanced lens that avoids being swayed by either overly optimistic or excessively pessimistic narratives. She emphasised the need to harness AI’s benefits while addressing its risks.

Central to this evolving landscape is the role of key regulators such as Ofcom and the Information Commissioner’s Office (ICO). The review process includes scrutinising their structure, capacity, and ability to navigate the intricacies of AI regulation. As the digital landscape transforms, the regulators’ readiness to adapt and evolve becomes paramount.

It is evident the UK’s AI policy is still evolving. Other jurisdictions such as the EU, US and China are adopting differing approaches to AI regulation. In particular, the EU’s preferred approach is much more prescriptive, instead opting to regulate the use and development of AI through the adoption of a ‘risk-based’, top-down legislative (via an ‘AI Act’) approach, with a centralised regulatory approach. Notably, the EU’s planned approach has received significant criticism and opposition from the AI community on the basis that such a prescriptive approach is not suitable for a technology such as AI which can advance rapidly in a short period of time.

Currently, in contrast, the UK’s AI policy is intricately interwoven with a broader digital revamp. Its decentralised, adaptive approach seeks to balance innovation with safeguards, drawing attention to both the transformative potential and potential risks of AI. Whilst there is clearly disagreement within parliament as to whether this is the best approach, it is arguable that this more flexible approach will allow the AI industry to help shape a more suitable type of AI regulation in the UK over time.

If you would like to discuss any of the issues mentioned in this article, please get in touch.

OpenAI and Microsoft sued in US for $3 billion over alleged ChatGPT privacy violations

OpenAI and Microsoft are being sued in a class action lawsuit alleging that they violated the privacy of hundreds of millions of internet users by secretly scraping vast amounts of personal data to train their ChatGPT artificial intelligence chatbot.

The lawsuit, which was filed on 28 June in federal court in San Francisco, California, claims that:

  • OpenAI and Microsoft collected personal information from users of websites and social media platforms without their knowledge or consent.
  • The information includes names, addresses, phone numbers, email addresses and financial data.
  • OpenAI and Microsoft used this personal information to train ChatGPT, in violation of the US Electronic Privacy Communications Act which prohibits the interception of electronic communications without a warrant.

The lawsuit is seeking class-action certification and damages of $3 billion and comes at a time when there is growing concern about the privacy implications of artificial intelligence. Whilst in recent years there have been a number of high-profile cases in which AI companies have been accused of collecting and using personal information without users’ consent, this is one of the first major cases to challenge the privacy practices of an AI company. The outcome of the case could therefore have a significant impact on the development and use of AI in the future, including the laws which govern the collection and use of personal data by AI companies, and set a precedent for other legal cases against AI companies.

This case is a timely reminder that AI companies need to be transparent about their data collection practices and ensure they have a valid legal basis, such as consent, before collecting personal data. It is also a reminder that users need to be aware of the privacy implications of using AI-powered products and services.

Conexus Law launches Conexus GC to unlock innovation in UK small and medium sized businesses

Conexus Law has officially launched Conexus GC, its virtual general counsel (i.e. the main in-house lawyer who gives legal advice to a business) service, to meet growing demand from the UK’s small and medium sized businesses operating in its specialist sectors. Since launching the rapidly growing boutique law firm in 2020 with a mission to unlock innovation in the built environment and digital world, managing partner Ed Cooke and the Conexus Law team have been informally providing a general counsel service for some clients who are not yet of a size or stage to hire their own in-house lawyer.

Ed Cooke, “With so much demand we decided to make this a service in its own right. In effect we’ve been market testing for three years so know exactly what legal services our smaller clients need, and how to deliver them, to accelerate their success.”

Conexus Law is a rapidly growing boutique law firm working exclusively for clients operating at the intersection of the built environment, technology and people.

Ed Cooke, “Applying the law to unlock innovation is our stated mission. We have a growth mindset, for ourselves and our clients, and we recognise that many small and medium sized businesses struggle to deal with the many legal demands that face them, especially when they are not big enough to have their own in-house legal team. This can be a real stumbling block to growth. Plus, it’s challenging for busy CEOs and COOs to find the right people who truly understand their markets and sectors. We totally ‘get’ the built environment and technology sectors, because it’s all we do. We remove the blocks and facilitate growth.”

A key benefit to Conexus GC clients is that they can choose from three, tiered subscription packages – bronze, silver and gold – and this allows them to predict their legal costs for six+ months. Clients with slightly different needs are offered custom arrangements. On signing up to the service, all new clients are given a named point of contact, a complimentary overview of their existing contract management with flagging of key dates, plus an initial horizon scanning service to highlight issues that could impact on their business, with advice on how to offset them.

“Our lawyers are all highly experienced in their specialist areas and many have worked as in-house lawyers too, so they totally understand the demands and pressure of supporting a growing business. The subscription model means Conexus GC clients can have all the multi-disciplined legal advice they need, at an affordable and predictable price.”

Conexus GC’s advice includes key areas such as commercial contracts, employment and intellectual property. Conexus Law’s sustainable business service is also available on the Conexus GC platform. For small to medium sized businesses needing emergency advice, whether a new or existing Conexus GC client, the team also offers an immediate crisis response team.

Although currently available for UK based companies only, the Conexus GC team can still work on international affairs, including global contracts and cross-border legal strategies, through its global network of best-friend firms.

Ed Cooke, “Every business that made a difference started out small. We’re looking forward to working with more businesses and speeding up their journey to success.”

Conexus GC is available from today on www.conexusgc.com.

Arbitration – Why have an Arbitration clause in your commercial contract?

In recent months, we have written about using mediation and adjudication as dispute resolution tools. But let’s look at another option open to you, when you engage in your commercial contracts.

Below we consider Arbitration, and what benefits it might have for you in resolving conflicts arising from your commercial contracts instead of using Court proceedings.

First, unless a party has agreed to arbitrate you cannot force them to do so. It is a private binding form of dispute resolution conducted before an impartial Arbitration body.

So why have an Arbitration clause in your commercial contracts to resolve disputes?

Well, litigation in England is a public proceeding before a Judge or Tribunal. It is not just public if the dispute eventually goes to trial. For example, many publications/journalists keep a watching brief at the High Court in London in respect of any Court claim issued. They can obtain copies of the pleadings (the Particulars of Claim, Defence and Reply) and often their attachments filed in any Court proceedings on payment of a small fee. This is without obtaining the Court’s permission to do so and without notice being given to any of the parties.

Arbitration is however private and confidential (unless you need to enforce an Arbitration award but even then the minutiae of your dispute is likely to remain confidential). Using Arbitration, it is easier for the parties to avoid damaging publicity and to preserve sensitive commercial information from entering into the public domain.

It also gives the parties greater variety and flexibility in how they resolve any dispute. The parties are free to choose their own tribunal – usually one or three arbitrators from one of the leading Arbitration bodies such as the International Chamber of Commerce (ICC), London Court of International Arbitration (LCIA) or The International Centre for Dispute Resolution (ICDR). That provides focused expertise (factual and/or legal) and you get one panel dealing with all aspects of an Arbitration from the start to end of the process.

Arbitration rules are flexible and streamlined and parties are not bound by national Court rules. Flexibility extends to the choice of law, venue for and language of resolving the dispute. So if your counterparty is based abroad and not keen on English law or the English Courts dealing with any dispute, you could as a compromise suggest that your contract have an Arbitration clause stating, say, that any dispute between the parties, be governed by English law but heard in Geneva[or any other locality you and they agree on], will be resolved pursuant to the ICC Rules with three arbitrators and the language of the Arbitration will be English. That gets around a party not wanting to submit to the jurisdiction of the other party’s local/national court.

The parties are also given autonomy to shape the form and scale of the Arbitration. Arbitrators can be selected by the parties for their familiarity with commercial and trade matters and may not necessarily be lawyers (although at least one on a three member Arbitration panel is likely to be). That circumvents the problem in some jurisdictions of judges not having relevant experience of a particular area.

As a client, you can be represented by lawyers and/or technical experts at an Arbitration hearing and not just limited legal advocates having particular rights of audience in a particular jurisdiction.

An Arbitration award is normally final and binding. The grounds for challenging an award are limited. As such, an appeal of an Arbitration award is difficult and it potentially cuts down on years and years of litigation to different appellant courts.

In some countries, the national courts are over‐burdened and it can take up to 10 years for a matter to come to trial. Arbitrating a substantial dispute usually takes 14-18 months to get to a final hearing. So whilst roughly on a par with the current length of English High Court proceedings getting to trial, the speed of Arbitration can be an advantage when compared to litigating in some jurisdictions.

The New York Convention provides for the enforcement of Arbitration awards. As of March 2021, 168 countries are a party to it and agree to enforce Arbitration awards made in other countries in their country. So Arbitration awards are more widely and readily enforced than Court judgments.

In our experience, the major disadvantage of Arbitration is its cost. Each of the Arbitrators needs to be paid on a hourly rate basis plus the administrative expenses of the Arbitration body setting up the Arbitration and the hiring of a venue for hearings. This is usually opposed to a one off Court fee or relatively low Court fees paid during a Court action (up to and including a trial) and no Court venue charges.

It is also not particularly workable where you want to join third parties into disputes where your relationship with that third party is not governed by Arbitration or you have agreed to arbitrate with that third party using a different Arbitration body/clause to the one in which the primary claim against you is being made.

Arbitration will not be right for every commercial agreement and should be considered on a case by case basis. In respect of high value contracts with international elements (either in respect of one or both parties or the subject matter), it will be worth detailed consideration.

If you would like more advice on whether you should consider having an Arbitration clause in your contract, and the form of it, please contact Ian Timlin whose details are below.

HOW CAN CONEXUS LAW HELP?

For further advice on adjudication, please contact Ian Timlin via his contact details below. Ian has been a CEDR accredited mediator since 2000.

Ian Timlin
Main: +44 (0)20 7390 0280
Mobile: +44 (0)77 6742 7332
[email protected]

Adjudication – Be Ready

Organisations in the construction sector are being warned to expect a rise in the number of adjudications around contracts as government support comes to an end and cash becomes scarce for many businesses.

Ian Timlin, a dispute resolution specialist at Conexus Law, is urging companies that might have a claim in a construction contract or might be on the receiving end of one to consider whether adjudication might apply to it. If so, they need to be prepared and either understand how they intend to initiate their own claim or ensure that they are not ambushed by an adjudication claim against them. “Given the tight timescales, a referring party often takes a responding party by surprise,” he concludes.

Ian explains: “Adjudication is the very quick (often 28 day) private and cost-effective procedure of resolving disputes in construction contracts. You cannot contract out of it and it applies to a construction contract which is an agreement with a person for any of the following:

• The carrying out of “construction operations”.
• Arranging for construction operations to be carried out, whether under a sub-contract or otherwise.
• Providing labour (either his own labour or others’ labour) for the carrying out of construction operations.

It also includes contracts with construction professionals.

“Traditionally used by contractors, adjudication is also a quick and cost-effective solution for an employer or building owner to obtain payments to resolve defects with a building that the contractor cannot or does not want to rectify or to resolve payments due to a contractor. We generally see adjudication used to resolve disputes in respect of the final account, interim payments, defects, delays and disruptions, as well as with works and extensions of time for the completion of works. All of these have been made more likely as a result of the impact of Covid-19, as many companies have struggled to deliver.”

Finally, Ian comments that a party to a construction contract can refer a dispute to adjudication at any time before or after construction works or operations have been completed, so used mid contract, it may offer resolution to a dispute with limited disruption to an on-going project or relations.

HOW CAN CONEXUS LAW HELP?

For further advice on adjudication, please contact Ian Timlin via his contact details below. Ian has been a CEDR accredited mediator since 2000.

Ian Timlin
Main: +44 (0)20 7390 0280
Mobile: +44 (0)77 6742 7332
[email protected]