In that case Mr Justice Ramsey viewed a lack of productivity as being “the best evidence” of a failure to proceed regularly and diligently. The case of Vivergo Fuels v Redhall Engineering Solutions 4 provides a useful insight into how a court is likely to evaluate whether there has been a failure to proceed regularly and diligently. Importantly then, a failure to proceed regularly and diligently with the works has to be judged against the contractual requirements of the contract as a whole and not just in terms of timing. “Taken together the obligation upon the contractor is essentially to proceed continuously, industriously and efficiently with appropriate physical resources so as to progress the works steadily towards completion substantially in accordance with the contractual requirements to time, sequence and quality of the works.”
In West Faulkner v London Borough of Newham, 3 the Court of Appeal examined a nearly identical clause to that in the JCT standard forms and concluded: What is a failure to proceed regularly and diligently? Conversely, it also provides guidance for Contractors seeking to establish that the Employer has repudiated their contract, or will do so, if it seeks to terminate their employment on that ground. It then suggests some practical advice for Employers deciding whether they can terminate the Contractor’s employment (and the risks of doing so) on that ground. This edition of Insight reviews what constitutes a “failure to proceed regularly and diligently” in the context of JCT standard form contracts. Get it right and clause 8.7 provides a useful toolbox for the Employer for getting on with the works and the ability to postpone paying any monies which may be due to the Contractor until after the completion of the works and the making good of defects. If the final notice is found to have been issued without the requisite grounds being satisfied, the contract will have been repudiated leaving the Employer open to claims for loss of profit at precisely the same time that they are seeking to get the job finished by others. The consequences of getting it wrong can be high. Assessing whether the definition of failing to proceed regularly and diligently has been satisfied is very much a question of judgement and must be assessed against the backdrop of what evidence is available to prove a lack of diligence. Terminating for failure to proceed regularly and diligently - what could go wrong? 1ĭoes the Employer have the right to terminate the Contractor’s employment for failure to proceed regularly and diligently under a JCT standard form contract? This is never an easy question, either from the Contractor’s view or the Employer’s view.
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