Construction and development faced a mixed but improving landscape in 2025. Although the sector saw modest growth in output driven by infrastructure and private housing, there remained ongoing weakness in commercial sectors like offices and retail. Key factors influencing the year included a decrease in the base interest rate, a significant increase in new infrastructure and industrial orders and several large projects opening, including London’s Silvertown Tunnel. However, challenges such as affordability in housing and uncertainty in the commercial market persisted.
The year concluded with modest increases in UK tender price inflation, up to 2.5% from 2.25%. Whilst delivery is steady there has been softening in confidence as decisions slow and new starts pause pending UK Budget clarity. Investor confidence remained cautious, fluctuating throughout the year, although there were some positive signs in the Build-to-Rent and hotel sectors. Although materials prices are broadly stable, labour and compliance issues are the principal cost pressures.¹ That reflects the broader market position of UK construction employment slumping to its lowest level since 2000. A combination of the housing downturn, weak commercial work and higher employer costs are said to have hit recruitment hard.²
Against this background there were several significant construction law developments, including two successful High Court judgments in which WFW acted:
- Toppan Holdings Limited,(2) Abbey Healthcare (Mill Hill) Ltd. v Augusta 2008 LLP (formerly Simply Construct (UK) LLP)³, the High Court awarded care home owners £6.4m inclusive of damages, interest and costs to compensate for their business losses from remedying construction defects; and
- Pharos Offshore Group Ltd v Keynvor Morlift Ltd⁴ is a significant reference point for parties in the offshore construction and energy sectors. It also has broader relevance for any commercial contract dispute involving late payments and settlement offers. The decision emphasises the importance of precise contractual wording regarding project deadlines and serves as a reminder that VAT is included when calculating interest on commercial debts.
Our lawyers continued to follow this year’s legal developments closely. We are therefore delighted to present, once again, our insights and views on the most relevant construction and development related issues from 2025 in our annual On-Site Review.
Our team continued to be active thought leaders in building safety in 2025, with several articles published externally on this topic. These articles included a review of the important Supreme Court decision in URS Corporation Ltd vs BDW Trading Ltd⁵ which significantly reshapes the liability exposure for contractors, consultants and developers involved in residential and mixed-use developments. We considered the government’s proposed remediation action plan; reviewed an important decision on what is meant by a ‘defect’ regarding claims under the Defective Premises Act 1972 and for remediation contribution orders and liability of associated companies; analysed the scope of the First-tier Tribunal’s powers when making remediation orders; reviewed the Remediation Bill; considered an important judicial review decision regarding the remediation of unsafe cladding; and highlighted practical steps to navigate the BSR Gateway 2 approval process.
One theme that emerges from a review of our team’s articles during 2025 is the importance of contract operation and clear drafting. We considered what can go wrong with inadequate contract preparation, discussed whether failure to fulfil a notice condition jeopardises a later payment claim and analysed the extent of good faith obligations in construction joint ventures. Our experience on construction law drafting was highlighted by Barry Hembling updating the UK’s leading construction law text in terms of the breadth and authority of its content.
We also considered industry themes and developments more broadly. We reviewed changes to Industry Training Boards, highlighted the impact of increased US tariffs on imported goods and discussed environmental planning reforms aimed at accelerating infrastructure delivery and homebuilding. We reviewed the Banner Review recommendations, which are designed to tackle delays that have hindered progress on major infrastructure projects and considered the impact of NISTA’s Infrastructure Pipeline tool on infrastructure planning and delivery.
We also discussed the use of arbitration in international construction disputes and compared arbitration against other forms of dispute resolution, such as litigation and adjudication.
If any of our articles raise questions or comments, please do reach out and share your thoughts with us.
Looking ahead, the outlook for construction and development appears more positive, with stronger growth projected. Glenigan’s Q4 data reveals construction output is expected to rise by 21 per cent over the next two years. This is likely to be driven by housing, infrastructure and the public non-residential sector, although challenges remain such as the labour market and skills gap and potentially tightening margins from increasing costs. Whatever 2026 brings, we continue to be here to support with our insightful and commercial advice and our cradle to grave service.
Wishing all our loyal readers a Merry Christmas. We look forward to continuing to help you navigate the construction law landscape in 2026.
Arbitration
International Arbitration and Construction Disputes
In a note for Thomson Reuters Practical Law UK, Jack Moulder and Maximilian O’Driscoll provide an insightful overview of international arbitration and construction disputes. They compare these with other forms of dispute resolution, such as litigation and adjudication.
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Building Safety
Remediation Acceleration Plan: Mid-Rise Building, High-Stakes Reform
In an article published by Construction Law Magazine, Dev Desai and Rupi Chandla explain what is required under the government’s Remediation Acceleration Plan (“RAP”) for mid-rise buildings. The RAP risks a plethora of regulations, proposals and guidance which risks muddying the waters further, they warn.
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Landmark Remediation Contribution Order Decision: Grey GR Limited Partnership v Edgewater (Stevenage) Ltd and others [2025]
Theresa Mohammed and Dom Turner-Harriss look at the landmark decision taken by the UK’s First-tier Tribunal (Property Chamber), regarding remediation contribution orders (“RCOs”) under the Building Safety Act 2022. This decision demonstrates the tribunal’s approach to determining what is “just and equitable” when making RCOs against associated companies and provides important guidance on the scope of the new legislation.
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How Landmark Building Safety Court Rulings Could Clarify the Law on Liability
In an article for Building Magazine, Theresa Mohammed examines recent developments where the courts are clearly intent on providing guidance on the application of the Defective Premises Act 1972 (“DPA”), RCOs, what is meant by a ‘defect’ in this context and the liability of associated companies.
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How Landmark Supreme Court Ruling Clarifies Liability and Limitation on Building Safety
In a note written for Building Magazine, Theresa Mohammed discusses the recent case of URS Corporation Ltd vs BDW Trading Ltd [2025] UKSC 21 which significantly reshapes the liability exposure for contractors, consultants and developers involved in residential and mixed-use developments.
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Monier Road Limited v Nicholas Alexander Blomfield and Other Leaseholders: Defining the Boundaries of Tribunal Powers in Building Safety Remediation Cases
This article written by Theresa Mohammed and Dom Turner-Harriss, examines the case of Monier Road Limited v Blomfield and other leaseholders [2025] UKUT 157 (LC) which provides crucial clarification on the scope and limitations of the First-tier Tribunal’s powers when making remediation orders under the Building Safety Act 2022.
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Remediation Bill – What Construction Professionals Need to Know
In this article, Theresa Mohammed explains the key provisions of the proposed Remediation Bill, which seeks to address liability for building safety defects following the Grenfell tragedy.
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Gateway 2 – Guidance Notes for Building Control Approval Applications
Theresa Mohammed provides guidance on Gateway 2 requirements for building control approval under the Building Safety Act. The article explains the application process, key documentation and compliance obligations for high-risk residential buildings, helping developers and contractors navigate this critical stage of project delivery.
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Grenfell Legacy and Developer Accountability – Rydon Group v SoS
Theresa Mohammed and Dom Turner-Harris discuss the judgment in Rydon Group v SoS, where the High Court dismissed a judicial review challenge brought by Rydon Group Holdings Limited against decisions made by the Secretary of State for Levelling Up, Housing and Communities concerning the remediation of unsafe cladding on three high-rise residential buildings.
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Appeal Court Confirms those Responsible for Building Defects must Bear Remediation Costs
Dev Desai and Michala Kucharikova examine a landmark appeal court ruling that confirms remediation contribution orders can cover remediation costs incurred before the Building Safety Act came into force in 2022.
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Understanding the Building Safety Act: What Real Estate Legislation Can Tell Us
In this article, Barry Hembling and Dev Desai examine some measures introduced by the Building Safety Act 2022 that they say purposely introduce an interplay between construction law and property law. Resulting uncertainty leaves room for divergence in how courts interpret statutory language under the traditionally different legal regimes, they warn.
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Contract drafting
Has Design and Build Outlived its Usefulness in a Post-Grenfell World?
In an article for Construction Law, Barry Hembling, Dan Haley and Sam Gunnewicht explore Design and Build contracts in a post-Grenfell world. They question whether this popular procurement route, where a contractor is responsible for both the design and construction of the project, is still fit for purpose.
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Contracts Need More Careful Preparation to Avoid Conflicting Provisions
In an article for Construction Law, guest editor Dom Turner-Harriss discusses the recent case that highlights what can go wrong with inadequate contract preparation. A situation that often lies at the heart of construction disputes.
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LexisNexis UK’s Encyclopaedia of Forms and Precedents
Barry Hembling has updated the construction edition of LexisNexis UK’s Encyclopaedia of Forms and Precedents (the “Encyclopaedia”). First published in 1902, the Encyclopaedia remains the chief source of non-contentious legal precedents in terms of the breadth and authority of its content.
Click here to access this article.
Contractual interpretation
When Does a Contract Clause Count as a Condition Precedent?
Featured in the Building Magazine, Theresa Mohammed breaks down the Court of Appeal’s recent ruling in Disclosure and Barring Service (DBS) v Tata Consultancy Services, in which a failure to fulfil a notice condition jeopardised a later payment claim.
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Precast in Stone: How Good Faith Crumbled but Causation Built a Wall – Matière SAS v ABM Precast Solutions Ltd [2025] EWHC 1434 (TCC)
Authored by Ryland Ash and Jack Moulder, this article outlines the Technology and Construction Court’s decision in Matière SAS v ABM Precast Solutions Ltd [2025] EWHC 1434 (TCC), which clarifies the scope of express good faith obligations in construction joint ventures.
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Dispute resolution
Another Victory for Claimants in Care Home Defects Dispute
Barry Hembling reports on the landmark case of 1) Toppan Holdings Limited, (2) Abbey Healthcare (Mill Hill) Ltd. v Augusta 2008 LLP (formerly Simply Construct (UK) LLP), where WFW has secured £6.4m inclusive of damages, interest and costs to compensate the claimants for their business losses.
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Remoteness of Damages in Construction Disputes
In an article written for Construction Law, Barry Hembling, Caroline Rossmann and William Stewart examine a long running dispute that has already been before the Supreme Court. This latest Technology and Construction Court judgment provides useful guidance about the law on remoteness of damages and how these principles are applied in construction law claims.
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Care Homes, Construction Defects and Commercial Loss – Guidance from the Technology and Construction Court (Toppan & Abbey v Simply)
This article is written by Barry Hembling and William Stewart, outlines the significant judgments handed down by the Technology and Construction Court, which gives further guidance for fire safety claims and the appropriate measure of loss for damages.
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Beyond Gestmin: the TCC’s Pragmatic Approach to Witness Recollection and Contemporaneous Evidence in Toppan and Abbey v Simply
In an article authored for Practical Law, Barry Hembling, Simon Jennings and William Stewart consider the decision in Toppan Holdings Ltd and another v Augusta 2008 LLP (formerly Simply Construct (UK) LLP) [2025] EWHC 1691 (TCC), where Martin Bowdery KC, sitting as a deputy High Court judge, considered claims arising out of the performance of professional services and construction operations in respect of the design and construction of Aarandale Manor care home in Mill Hill, London.
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Energy
Success Strategies for BESS Investments with regard to Regulation and Construction
Germany is currently experiencing a boom in the construction of and investment in large battery energy storage systems (“BESS”). This is due to the enormous demand for storage capacity related to energy transition and the increasing importance of energy security. In this article, Christian Schindler, Britta Wissmann and Dr. Julien Lamott outline key considerations such as compliance with building laws, securing grid connections, and mitigating construction and procurement risks during development and M&A processes.
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BESS Projects – Commercial Contracting: Key Questions to Ask
Written by Jennifer Charles, Emmanuel Ninos, James Ballantyne and Ben Harvey, this article outlines key commercial contracting considerations for BESS projects, focussing on structuring revenue agreements, managing interface risks and ensuring robust performance and warranty protections.
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Infrastructure
Banner Review Recommendations to be Implemented
Theresa Mohammed reviews the UK government’s adoption of Banner Review recommendations designed to streamline legal processes and tackle delays that have hindered progress on major infrastructure projects. The reforms include limiting repeated judicial review attempts, removing the initial paper stage, and introducing measures like court delay league tables.
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Impact of Judicial Review Reform on the Costs of Infrastructure Projects
This article, written by Theresa Mohammed, examines the impact of judicial review reform on the cost of infrastructure projects in the UK. It explains how the Banner Reforms aim to reduce unexpected costs and delays caused by unmeritorious legal challenges, providing greater commercial certainty and improving efficiency for large-scale projects such as HS2.
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NISTA and the Teal Book – a New Era for UK Infrastructure Delivery
In an analysis for LexisNexis, Theresa Mohammed and Dom Turner-Harriss examine the details and far-reaching implications of the National Infrastructure Commission and the Infrastructure and Projects Authority merging into a single entity, alongside the publication of the ‘Teal Book’ for the construction sector.
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NISTA’s Infrastructure Pipeline: A Transformative Tool for UK Infrastructure Delivery
Authored by Theresa Mohammed, this article examines how NISTA’s Infrastructure Pipeline tool represents a significant advancement in the UK’s approach to infrastructure planning and delivery.
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Industry Trends
Transforming the Construction Workforce
In this article, Theresa Mohammed, Devan Khagram and Dom Turner-Harriss explore the urgent need to transform the UK construction workforce in response to Mark Farmer’s government-commissioned review of Industry Training Boards. They highlight recommendations such as merging CITB and ECITB, introducing a digital skills passport, and creating flexible career pathways to address labour shortages, rising costs and declining productivity in the sector.
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Tackling Trade Tariff Increases in UK Construction
Ryland Ash and Jack Moulder analyse the impact of increased US tariffs on imported goods and the reciprocation by other governments on the global construction industry is discussed.
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UK Shifts towards Nature-Positive Infrastructure: DEFRA announces Environmental Planning Reforms
In this article, Theresa Mohammed and Maximilian O’Driscoll explain DEFRA’s newly announced environmental planning reforms aimed at accelerating infrastructure delivery and homebuilding while safeguarding nature.
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[1] Gardiner & Theobald LLP Q4 2025 Tender Price Forecast.
[2] https://www.constructionenquirer.com/2025/11/12/construction-employment-sinks-to-24-year-low/
[3] [2025] EWHC 1691 (TCC).
[4] [2025] EWHC 1764 (TCC).
[5] [2025] UKSC 21.
