Most people’s answer to this a year ago would have been a pretty straight forward “no”. But HHJ Akenhead’s decision in Parkwood Leisure v Laing O’Rourke Wales and West this year means that the answer now is more likely to be “it could be”. In Parkwood, the Judge focussed on a couple of issues specific to the collateral warranty in question. He considered that a very strong pointer towards a collateral warranty being a construction contract would be whether the contractor was undertaking to carry out construction operations. A pointer against would be if all the works had been completed and that the contractor was simply warranting a past state of affairs.
The implications of the Parkwood case are that contractors and clients alike may start to consider whether an express right to adjudication should be inserted into collateral warranties. It remains to be seen whether the other parts of the Construction Act (such as those relating to payment provisions) would also be implied into such collateral warranties as the court didn’t look at this in Parkwood. The bottom line is that there is no blanket rule that collateral warranties are now construction contracts, but parties might find themselves reading their warranties a little more carefully in 2014.