March 29, 2022

The construction industry faces many challenges in the current economy, not least with the demand for property outweighing the supply chain. It is imperative that the industry work together to face the challenges ahead and embrace a harmonious approach. Ireland has already witnessed a massive increase in claims against construction professionals during the period 2005 to 2016. Now is a good time to take a collaborative, industry approach to seeking to avoid claims as much as possible. Lower claims and costs spend will lead to better insurance terms for all construction professionals and increase the choice of insurers as the market progresses.

The Grenfell tragedy in the UK caused massive shockwaves throughout the insurance and construction industry which has had a significant bearing on the wording of many design and construct policies and their incumbent conditions and exclusions.  Irish brokers have been challenged in obtaining suitable insurance capacity for clients in a hard market in which premiums have continuously risen. Legal costs will always be a risk driver in underwriting capacity considerations, so it is essential that a costs proportionate response arises in the event of claims. Design & Construct policy wordings have become increasingly more complex with more attention on relevant exclusions and specific wording. Design professionals will need to be very aware of what is in their insurance policy before entering a project.

Again, it is only be taking a collaborative approach and view the insurance, construction and legal industry as inexorably linked that proactive progress can be achieved.

COVID-19 has also been a major catalyst in areas such as delays, Insolvency and payment disputes. The Irish courts have consistently recognised the importance of processes such as statutory adjudication in such situations where payment disputes do arise and it is critical that clients do not waste their costs in challenging such mechanism without cause.

We should look to developments in the UK that may have a persuasive bearing on the future trends that the Irish courts may take. In particular to any cases of note in the UK Technology & Construction Court (“the TCC”).