Collateral warranty held to be a construction contract

In Parkwood Leisure Ltd v Laing O’Rourke Wales and West Ltd [2013] EWHC 2665 (TCC) Akenhead J held that a collateral warranty was a construction contract for the purposes of the Housing Grants, Construction and Regeneration Act 1996 so that a dispute which had arisen in connection with a term of the collateral warranty could properly be referred to adjudication. However, he was careful to point out that it should not be assumed that all collateral warranties will fall within the definition of a construction contract under the 1996 Act. In all cases, it is necessary to examine the wording of the collateral warranty and its factual context. Where the warranty relates to work that has been completed, it is less likely to amount to a construction contract because in such a case the warranty is one that relates to the standard of work that has already been done. But where the warranty relates to work that is still to be done and the giver of the warranty is undertaking to the beneficiary to carry out construction operations, then it is more likely to be a construction contract.