The recent Technology and Construction Court case of John Sisk & Son Ltd v Capital & Centric (Rose) Ltd [2025] EWHC 594 highlights the importance of properly constructing contract amendments and the impact that unclear bespoke provisions or amendments can have on risk allocation and responsibilities of parties to a construction contract.
Background of the case
This case relates to a claim brought by Sisk seeking the court's judgment as to the proper construction of a clarification clause. Sisk was employed as a contractor by Capital & Centric for the design and construction of two new residential buildings together with repair work of two existing listed mills.
The JCT Design and Build 2016 contract was heavily amended with bespoke provisions and additional contract documents Volumes 1–4.
A dispute arose regarding the risk associated with the existing structures on site.
Sisk claimed that the contract allocated the risk to Capital & Centric, whereas Capital & Centric's competing argument was that they had agreed to take the existing structures risk subject to certain conditions.
The issue was initially referred to an adjudicator, who found in Capital & Centric's favour that the contract allocated the risk associated with the existing structures to Sisk.
The contractor subsequently sought declaratory relief from the court, which led to this judgment.
The issue
Which party was contractually responsible for the risks associated with the existing structures on the site, including their ability to support or facilitate the proposed works?
The Schedule of Amendments to the contract included bespoke clauses at 2.42.1 to 2.42.3, which sought to make Sisk responsible for all risks associated to the existing structures and site.
An additional clause at 2.42.4 stated: 'This clause 2.42 shall be subject to item 2 of the Clarifications.'
'Clarifications' was a defined term in the contract, comprised of the document 'Contract Clarifications' contained within 'Volume 2, Appendix 2.9' of the 'Employer's Requirements'.
It was the following wording within item two of the clarifications that was the central issue of the dispute.
Unhelpfully, the contract did not define the meaning of 'Employer Risk' or 'Existing Structures Risk'.
Due to the size of the contract documents, the contract was produced in two versions: a paper version and an electronic version.
Both versions contained the contract clarifications, but the electronic version contained two clarification documents, one entitled contract clarifications and the other entitled tender submission clarifications.
This additional document recorded Sisk's comment that it was unable to price the risk and its proposal that Capital & Centric should warrant that the structural condition of the existing fabric was suitable for the new works. Capital & Centric's recorded response was that Sisk's comments were not accepted.
Sisk relied on the contract clarifications document, arguing that item two, in particular the phrase 'Employer Risk', should be interpreted as passing the risk of the existing structures to Capital & Centric.
In contrast, Capital & Centric relied on the tender submission clarifications document in which, they countered, the allocation of the existing structures risk is confirmed as remaining with Sisk.
Further, they argued that the wording of item two simply meant that Capital & Centric was to insure the existing structures and to seek a warranty from Arup, the consultant employed by Capital & Centric to undertake pre-contract investigations.
Judge finds in favour of contractor
The judge found that both the contract clarifications and tender submission clarifications formed part of the contract.
However, the former was of more relevance to the proper interpretation of the contract and in particular clause 2.42, which dealt with the responsibility for the existing structures.
The reasons given for this were:
- the contract definition of 'Clarifications' did not include reference to both, it referred expressly and only to 'Contract Clarifications', and this had to be reference to the specific contract clarifications worksheet not the clarifications document as a whole
- clause 2.42.4 refers to 'item 2 of the Clarifications' and it is obvious from the content of the clarifications that this can only be a reference to item two of the contract clarifications worksheet.
Focusing then on item two of the contract clarifications, the judge held that the term 'Employer Risk' could 'reasonably obviously be understood in [its] normal or natural meaning', meaning Capital & Centric was the 'Risk Owner' in relation to the unsuitability of the existing structures, including their ability to support or facilitate the proposed works.
The judge dismissed Capital & Centric's argument that the words 'Employer Risk' related to a risk of Capital & Centric failing to provide the required insurance or warranty.
The court found in favour of Sisk, overturning the adjudicator's decision, deciding that the risk of the unsuitability of the existing structures, including their ability to support or facilitate the proposed works, lay solely with Capital & Centric.
Key lessons
This case is a reminder that the allocation of risk is crucial for project success and dispute avoidance as well as the importance of clear and well-thought-out drafting to ensure the terms of the contract reflect the agreement of the parties, particularly in relation to risk allocation.
The dispute could have been avoided if, among other things, the ambiguities in the language had been avoided and the relevant contract documents had been more clearly referenced.
It is also a reminder that it is the responsibility of both parties to review the contract, including any referenced or appended documents, further to negotiations, to ensure the final version clearly and expressly captures their intentions.
Where tailored contract terms are required to achieve the intended risk allocation, amendments should be made by practitioners who have experience in contract drafting.
'The dispute could have been avoided if, among other things, the ambiguities in the language had been avoided and the relevant contract documents had been more clearly referenced'