Reed Smith Newsletters

Welcome to the third edition of Reed Smith’s Global Construction Update, a biannual newsletter looking at key issues affecting construction and engineering projects across the globe. This edition focuses on “boom or bust” and volatility.
Construction Site

Across all our feature articles is a persistent message – the successful delivery of projects increasingly depends on rethinking risk allocation. Contractors and developers alike are advised to challenge the accepted wisdom of ‘standard market practice’ because the economic and political climate is anything but standard.

In this edition:

  • Richard Ceeney and Laura Riddeck (London) offer practical legal tips to protect against risk and volatility, suggesting that complacency in due diligence and risk allocation on projects has led to a perfect storm for claims.
  • Michelle Nelson and Chris Edwards (Dubai) challenge the standard market practice of ‘on demand bonds’ in the UAE, asking whether developers should rethink security on construction projects.
  • Matthew Harley (Dubai) provides a civil law perspective on ‘economic hardship’ principles under the laws of GCC countries, which may provide legal respite in cases of unpredictable, exceptional circumstances that threaten exorbitant losses on a project.
  • James Willn and Finlay Donaldson (Dubai) consider how contracts can mitigate price fluctuations and labor shortages, while highlighting the increased importance of robust project investment appraisals to ensure the feasibility of projects.
  • In a spotlight on our US practice, James Doerfler and Gesue Staltari (Pittsburgh) offer five strategies for driving greater certainty in construction contracts, from a US market perspective, including innovations around expanded force majeure provisions, increased use of cost-plus and guaranteed maximum price contracts with contingency provisions, judicious use of liquidated damages clauses, and others.
  • In a Q&A session, Vanessa Thieffry (Paris) tells James Doerfler (Pittsburgh) about the challenges facing her clients in the current economic climate, including parties’ attempted use of force majeure claims to rebase or recalibrate a project.
  • To conclude, Nicolas Walker, Adrien Hall and Michaela Hanzelova (Paris) highlight new sustainability regulations in France that are expected to drive growth in the construction sector.

Is there a topic or theme that you would like to see covered in future editions of this update? Please let us know.

To view the full publication, please download the PDF below.