In this issue
by Simon Tolson, Partner
It is my great pleasure to introduce our 2021/22 Annual Review. This is our quarter century edition!
Thus far, 2021, like 2020 before, has been a hell of a year. After all of the world’s catastrophic events, it will be difficult to walk away unchanged. Is anyone out there feeling normal? Are we recovered from turning our living rooms into offices and bedrooms into classrooms? For many, the morning commute came to be measured in metres not miles. And many did not even have to travel that far!
Personal finance website, Forbes Advisor UK, estimates that around 7 million UK households spent an extra £900m on gas and electricity working from home during the pandemic. Its research showed almost 12.5 million (38%) Brits are working from home, with the majority of these (82%) doing so as a direct result of the pandemic.
We now face an energy crisis with grid capacity issues, profound shortages of construction materials for sites, continuing shortages of lorry drivers to shift gear and plant, and now maybe stagflation? The construction industry in some areas now has more work than it can handle. It just needs to be able to hit its capability mark.
The RICS Construction and Infrastructure Survey for Q2 2021, in response to the question of what factors limit activity, over 80% cited shortage of materials, with close to two-thirds identifying issues around labour. Significantly, in the case of the former, this is a record high and by some margin (previous peak 63%) since the question was first asked in 2012. What is particularly encouraging is that the construction and infrastructure sector is hiring once again and profit margins are beginning to turn around – provided inflationary pressures can be managed. Total workloads are showing strong growth after +38% (net balance) of respondents reported a rise. The number of vacancies reached a record high between July and September 2021 at 1.1m and the ONS say the current ratio of 3.7 vacancies per 100 jobs was the highest on record, underscoring the difficulty hiring labour.
I detect the construction sector is facing a crossroads with the impact of Covid-19 and as the consequences of climate change intensify in public consciousness and law.1 The way we plan and build is entering a new phase. The major challenge for the construction sector globally is around shortages of building materials and finding labour with the requisite skills. The biggest hurdle and opportunities that the sector faces longer term are balancing between short-term imperatives, such as labour and material scarcity, inflation, pressure on the public sector budgets and the political realities of the post-covid and Brexit world, with the long-term aspirations of using construction as a vehicle for social and environmental change.
That said, our ranch this last year, notwithstanding Covid complications, has not been dented and resulted in the best year ever for the business. We also made it again to the top spot in “Tier 1” in The Legal 500 for Contentious Construction for 2021/2022. You may recall we also hit this spot last year and the year before too. Chambers & Partners have the firm in Band 1 too for 2022. So, we are delighted to be in the top tier in both main directories concurrently.2
We are also, again, in the prestigious The Times Best Law Firms 2022, which recognises the best lawyers for business, public and private-client law across England, Wales and Scotland, as chosen by lawyers.
We are delighted by this news, and I want to thank all my partners and staff for the huge work put in as well as adapting, running case work virtually, and servicing our clients’ needs through the pandemic.
From FE’s inception 35 years ago, we have grown from 2 partners to 21 partners and our staff numbers have grown nearly 15-fold to a 100 or so. I am immensely proud of our achievements which are a testament to hard work and determination and the loyalty of everyone.
As a business, we are undertaking more heavy weight international arbitration than ever before. Somewhat fewer disputes are going to the High Court than the past (a national trend), but they are still happening in complex domestic disputes, but, in our engine rooms, we have continued our active involvement and growth in complex and high value construction and engineering litigation international arbitrations in the fields of renewable and alternative energy and infrastructure operations.
This last year, our investment in legal tech has continued with fee earners using Solomonic litigation analytics, tracking and predictive tools and Ayfie for our text-analytics and data mining solutions. In addition, we continue to see the rise of contract and document automation across the industry, as well as the use of connected technologies and platforms to enhance productivity and insight, and minimise risk.
I am hoping 2022 brings life back to close to normal for all of us. Last October, I reported our offices officially re-opened on 15 June 2020, once the Covid lockdown started to ease (things then reversed from September 2020 and the country was in lockdown again and pretty well stayed there until June 2021). Since June in London and Dubai, we have been open in the physical sense. But, like most professional businesses, we are probably operating a 30:70 ratio of office to WFH with that ratio increasing steadily to more to the office. The picture in our business is in a micro sense reflective of the change in the outside world. We have had to adapt and serve our clients’ wants and needs in the new look marketplace.
I have to thank all my partners and every single member of staff for their huge contributions made to make this happen.
We have taken significant steps on EDI within the firm over the last 18 months. Central to our EDI policy is building an inclusive and sustainable pipeline for succession in leadership and promotion within Fenwick Elliott. This means we value differences and promote respect, support, and a sense of belonging to retain talent across all lawyer and personnel levels. Fenwick Elliott is committed to promoting equality, diversity, and inclusion and to eliminating unlawful discrimination policies, practices, and procedures in the areas in which it can influence.
We are, at heart, an inclusive firm in which each individual has the opportunity to shine and in which everyone pulls together as a team. We foster an open, challenging, participative and rewarding environment, for all our employees. We identify employee development expectations and opportunities through regular reviews and endeavour to ensure that pay and benefits are competitive.
This is not just good business; it is peoplesense and one I am proud we invest in.
Fenwick Elliott is committed to delivering its services according to rigorous ethical, professional and legal standards. This ethos governs every element of our business and social interactions. We always operate with a strong sense of integrity, critical to maintaining trust and credibility with our clients, business partners, employees, and stakeholders. We strive to review and continuously improve our corporate social responsibility programme.
During lockdown, in recognition of the work The Lighthouse Club focus on, providing mental health support, we organised the “FE Stay Active Challenge” for the Lighthouse Club, where team members, friends and clients could run, cycle, walk the dog or conduct any exercise of their choice.
Recently, we have been peer reviewing contract clauses for The Chancery Lane Project (a project aligned with and supporting the achievement of the UN Sustainable Development Goals relating to climate action and the UK’s emissions reduction target, enshrined in law, to reach net zero by 2050) as they develop new contracts and model laws to help fight climate change.
A word on Grenfell
Grenfell has, again, occupied a number of partners and fee earners on various fronts this year and we have led a number of important webinars on it (as well as many other fields) including The Building Safety Bill.
So much is coming out of Phase 2 of the Inquiry for the industry to learn from, and when combined with the Building Safety Bill, the reforms are truly set to create lasting generational change and a clear pathway for how future residential buildings should be constructed and maintained – the Golden Thread amongst them.
The law of limitation will change too. An extension of liability (which will apply retrospectively) will flow through the Defective Premises Act 1972 and, therefore, any entities who can bring a claim under that DPA may now have an extra nine years in which to do so, or, given latest amendments proposed in the Bill’s Committee Stage - 27 more years!
This is all the product of public policy in the absence of a collateral warranty or third party rights. Subsequent homeowners have only a very limited recourse for defects against the original contractor/developer outside of the DPA. Often defects can take some time to manifest themselves, so the change to the DPA limitation period does give some additional protection to homeowners. Well, potentially, at least.
These limitation changes will result in claims brought chiefly against contractors, architects and subcontractors involved in the construction process concerning cladding and external wall systems failing to comply with Building Regulations.
Lastly for now
We have much in this Review for you to read.
As a sector-focused law firm, we pride ourselves on our deep industry expertise. So, rather than us talk about ourselves and the work we have been doing for our clients, this Annual Review is instead based on articles which give our take on cases and developments in our market over the past 12 months – and where things are heading.
If you would like to discuss any of the points raised in these pages in more detail, please do not hesitate to contact any of us. As always, we are here to help.
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