Construction Article on Abbey Healthcare Collateral Warranties

Collateral Warranties in Construction Contracts

The Supreme Court has recently clarified the law regarding collateral warranties and whether they are ‘construction contracts’ under the Housing, Grants, Construction & Regeneration Act 1996, in its judgment in the case of Abbey Healthcare (Mill Hill) Ltd v Augusta 2008 LLP (formerly Simply Construct (UK) LLP) [2024] UKSC 23. B P Collins’ construction law team explores why the case has significant implications with regard to whether the statutory right to adjudication will be available to parties to a collateral warranty.

Construction Contracts and Collateral Warranties

A construction contract is widely defined by section 104 of the Act as an agreement with a person for any of the following:

• the carrying out of construction operations;
• arranging for the carrying out of construction operations by others, whether under a sub-contract or otherwise;