CMS Publishes 2025 Annual Review of English Construction Law Developments

CMS has released its 2025 Annual Review of English Construction Law Developments: An International Perspective, a comprehensive analysis of recent cases and trends affecting construction law under English jurisdiction and in related common law systems. The review, aimed at international clients, offers a deeper examination of legal developments than the firm’s regular Law-Now alerts.

This year’s edition highlights the ongoing importance—and controversy—of exclusion, limitation and time-bar clauses in construction contracts. One significant case examined is Innovate Pharmaceuticals v University of Portsmouth, where the court held that a broadly worded exclusion clause could apply even to fraudulent breaches of contract. This finding marks a potential shift, suggesting that general exclusion clauses may, in certain contexts, cover fraudulent acts by contractors or their agents. Legal commentators note that such interpretations diverge from traditional public policy concerns, raising questions about where courts will ultimately draw the line.

The report also covers liability caps, with the Court of Appeal’s ruling in Topalsson GmbH v Rolls-Royce Motor Cars Ltd clarifying that caps should be applied before set-offs, preventing employers from circumventing agreed limits through accounting mechanisms. This stands in contrast to earlier case law such as Sabic v Punj Lloyd, where performance securities were deemed outside the liability cap. The tension between these decisions underscores the need for careful drafting, particularly on whether securities and interest claims should erode the cap.

Another theme is the impact of contractual appendices on design responsibility. Recent decisions in Workman Properties v Adi Building and BNP Paribas v Briggs & Forrester show courts rejecting contractors’ reliance on technical appendices to narrow their scope of responsibility. However, the review also cites earlier cases, such as Clancy Docwra v E.ON, where appended documents influenced contractual interpretation. These findings highlight the risk of under-scrutinised technical schedules fundamentally altering risk allocation.

The enforcement of on-demand securities also receives attention. Two high-profile cases—one from Qatar and one from Singapore—explored the boundaries of the fraud exception. In Thales QFZ v Aljaber Engineering, contradictory beneficiary statements supported a finding of fraud. Meanwhile, the Singaporean Court of Appeal in Winson Oil Trading v OCBC ruled that reckless indifference to the truth could amount to fraud, extending the exception beyond direct dishonesty. Whether English courts will adopt this broader approach remains an open question.

Finally, the review notes growing judicial scrutiny over termination clauses, particularly distinctions between “remediable” and “irremediable” breaches, and provides an update on the new SIAC arbitration rules, which are expected to influence dispute resolution strategies across international construction projects.

Commenting on the release, CMS partners Adrian Bell, David Parton and Steven Williams emphasised that the publication is designed as “mandatory reading” for those engaged in international construction projects governed by English law. The review, they noted, should assist clients in anticipating risks, negotiating more robust contracts, and avoiding costly disputes.

The full 2025 edition, alongside previous years, is available through CMS’s Law-Now Construction portal.