Abbey Healthcare operated a care home in a building developed by Augusta. Defects were alleged. A collateral warranty had been given by the contractor after the works, and Abbey sought to enforce an adjudication award based on that warranty.
Selected cases
UK Supreme Court · [2024] UKSC 23
Abbey Healthcare (Mill Hill) Ltd v Augusta 2008 LLP
The UK Supreme Court considered whether a collateral warranty was a construction contract giving rise to adjudication rights.
UK Supreme Court9 July 2024
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Quick read
- Collateral warranties should not be treated as interchangeable boilerplate.
- The UK Supreme Court considered whether a collateral warranty was a construction contract giving rise to adjudication rights.
Use this to check
- Check collateral warranties before defects disputes arise
- Align warranty wording with intended remedies
- Do not assume every construction-related warranty gives adjudication rights
Decision snapshot
What happened
- Abbey Healthcare operated a care home in a building developed by Augusta.
- Defects were alleged.
- A collateral warranty had been given by the contractor after the works, and Abbey sought to enforce an adjudication award based on that warranty.
What the court had to decide
- The issue was whether the collateral warranty was an agreement for the carrying out of construction operations under the Housing Grants, Construction and Regeneration Act 1996.
What the court decided
- The Supreme Court held that the warranty on the facts was not a construction contract for statutory adjudication purposes.
- It was more in the nature of a promise about past and ongoing performance under the building contract.
Practical impact
Practical read
- Collateral warranties should not be treated as interchangeable boilerplate.
- Developers, tenants, funders and contractors should check whether the document gives the intended enforcement route, including adjudication if that matters.
Useful next steps
- Check collateral warranties before defects disputes arise
- Align warranty wording with intended remedies
- Do not assume every construction-related warranty gives adjudication rights
How businesses should read it
Collateral warranties should not be treated as interchangeable boilerplate. Developers, tenants, funders and contractors should check whether the document gives the intended enforcement route, including adjudication if that matters.
Key takeaways
- Check collateral warranties before defects disputes arise
- Align warranty wording with intended remedies
- Do not assume every construction-related warranty gives adjudication rights