Looks at the circumstances in which a collateral warranty amounts to a construction contract under S.104 of the Housing Grants (Construction & Regeneration) Act 1996, asking what is the meaning of an agreement “for… the carrying out of construction operations”. The majority of the Court of Appeal concluded that the Abbey Collateral Warranty was a construction contract. The Supreme Court looked at a more principled and workable approach was to draw the dividing line between collateral warranties which merely replicate undertakings in the building contract and those which give rise to separate or distinct undertakings for the carrying out of construction operations. This approach means that the Abbey Collateral Warranty is not a construction contract.

This conclusion means that the decision of Akenhead J in Parkwood Leisure Ltd v Laing O’Rourke Wales and West Ltd [2013] EWHC 2665 (TCC), upon which the majority of the Court of Appeal placed considerable reliance and rightly held to be indistinguishable, was wrongly decided and must be overruled.

Whilst 'most collateral warranties will not be construction contracts' and hence will be without the right to adjudicate, an express right to adjudicate can always be included in the warranty if required.

Judges: Lord Briggs, Lord Hamblen, Lady Rose, Lord Richards, Lady Simler

Judgment appealed [2022] EWCA Civ 823