Next Gen Development Lifecycle Series Session 4: Post-acquisition Part II (webinar transcript)

The webinar recording can be listened to at our Real Estate Hub.

RM:  Good morning, everyone.  Thank you very much for joining us this morning.  And a particular thanks to those who have joined every event in the Ashurst Next Gen Development Lifecycle series.  So today, we're going to carry on with the theme we started last week on the post-acquisition topic.  So today, we're going to go into that further and delve into the depths of planning, environment and construction elements of building out your site.  Matt will be talking through the construction elements, Ben will be talking to the planning elements, and James will be finishing off on the environmental parts of building up a site.  Before we hand over to the speakers, I should remind you that you can submit questions throughout the session, and you can do that in the little chat box in the corner of the screen.  You can also do it by submitting it via email, and there is an Ashurst Next Gen email address at the bottom of each slide.  So I really encourage you to stay on until the end and wait for those questions until the questions as they are just as important as the content itself.  Therefore, without further ado, over to Matt.

MP:  Thank you, Rory.  Yeah, so as Rory mentioned, I'm Matt Pearson.  I'm a Senior Associate in the Construction team at Ashurst and I'm going to be talking to you today about construction procurement and what that means for you when you have acquired you land or your property that is going to be redeveloped or refurbished.  You can just move on to the next slide, please.  So I think when we … just before we begin, I mean, I'm not going to go into too much detail, it's just going to be a high level, but hopefully helpful, overview of the core principle drivers of procurement and the ... I'm going talk to the three main types of … or the sort of three very commonly used types of procurement in the domestic market.  I think when we think about procurement, it can mean different things in different industries.  But in construction, when we talk about procurement, we mean the method by which you get your development done.  Put quite simply, the contractual mechanisms and the style of contracting the E news.  Procurement rates do differ widely.  The three that I'm going to talk to you about today are quite different and those differences will become apparent as I proceed.  I think, firstly, it's just worth mentioning that really, as I see it with procurement, there are really three or four big commercial drivers which will dictate your selection as the type of procurement you wish to use for your development.  So, as we can see on this slide, the three main drivers really, in my view, are the ones on the outset to the cost of the building works.  Obviously, of course, and with anything commercial, the cost certainty is safer, more guaranteed with certain types of procurement, so that will have a bearing depending on the type of works you're procuring, the quality of the of the building that's required.  So if you have a very specific finish or something very bespoke, that may well dictate your procurement selection.  And also timing too, because certain types of procurement have more time certainty, better time certainty than others.  For example, if you're building student accommodation, that's a really good example of something that probably requires more time certainty than really anything because typically you will need that development to be finished by the end of May, to the end of the summer, that you can have students move in and the development be fully operational by the early autumn, by September.  So you're going to have a strict deadline, so you want to be choosing the type of procurement's not going to have loads of time over at risk.  And, at the heart of all of this, we have our key players, which we need to just bear in mind throughout procurement.  So if we have a lender, which more often than not will be the case, they will be heavily involved at the procurement stage and afterwards and throughout the life cycle of the development.  We also need to bear in mind our end user to purchase his tenants and the reality that we probably won't own the property for years and years to come because it will be an investment asset.  Okay, so let's move on to the next slide, please.  So these are the three main types of construction procurement use in the domestic market.  We have traditional design and build and construction management.  It may well be that some of you, or all of you, have heard of all of these types.  I think if anyone's heard of any type, it's probably going to be design and build, and that's because it is very commonly used.  But let's move to the next slide, please.  So we're going to discuss traditional procurement first.  So in traditional procurement, you will be entering into a JCT building contract with a main contractor and on a JCT standard form, they're called.  At the centre of this, as we can see from the diagram, we have the client, so that would be you.  And typically, in terms of just the contractual assessor, you have a main contractor who will be responsible for construction day to day in most cases.  But before you get to the to the build stage, the client will engage a design team and a range of other consultants too.  So when we talk about design team, we mean architects, structural engineer, services engineer, interior designer, and others too.  And those on the non-design side are going to be your quantity surveyor, project manager, planning consultant, those types of disciplines.  The key thing that I really should just mention here is that all of these contracts remain in place as originally entered into.  So the client retains control, there's no transfer of any design team consultancy appointments to the main contractor.  The main contractor will in turn appoint subcontractors.  Next slide, please.  So let's just look at some of the core principles and some of the advantage as well.  In general, with standard procurement, what happiness is the design is carried out upfront.  So you have a long period of time for planning the whole of the design process and at that point, the developer, he goes up to the contract market to seek quotes on a lump sum basis in order to construct in accordance with that design.  This minimises the scope for changes, the design's done, so there shouldn't really be much else to do.  Obviously, sometimes there will need to be changes to that design, but in general, the idea is that it's done.  And that lends itself to price certainty.  And the client remains in control, which is good for some clients, and the risk is spread.  I mean, that can also be a disadvantage because you don't have that single point person that you can say, "Look, this has happened, you're responsible".  That is the case on design and build procurement, which we'll come on to shortly.  Next slide, please.  So just some of the downsides to traditional procurement then.  Well, the overall time may well be longer because you've got to design or do almost all of your design upfront and then you go out to contractor market.  And with that, because there isn't that interplay between the contractor and the designers and the client from the very outset, you don't really get the benefit of the contractor's expertise, so their build ability, you know, how they can make cost savings and time savings and their whole build expertise in that sense.  And, as I mentioned in my last slide, so the risk is spread.  So if there's a problem, it could well be that there were multiple parties involved, and you will be … it's not always easy to just having responsibility and it's obviously problematic, it can be problematic, and it just needs context.  Okay, next slide, please.  So this is design and build.  You probably think, when you look at this diagram, it actually looks really similar to the one before.  And in many respects it is similar, but there are some key differences.  So at the centre again you have your client, and at the outset of the project, as with traditional procurement, the client will engage a range of consultants, designers and non-designers, the same as I previously mentioned.  The design will be carried out to a certain stage, so it won't get to very advanced design, it will get to … X amount will be down, and then you go out to the main contractor market.  And, you will see on the diagram, the design consultants sit below the main contractor, alongside subcontractors.  And the reason for this is because, at the point the building contract is entered into, most typically a number of the designers, and when I say number, we usually mean architects, structural engineer and services engineer, those appointments will be transferred over to the main contractor by way of novation.  And that gives us a single point of responsibility for design and construction, which is the main feature of design and build and is kind of the hallmark of design and build.  Okay, next slide, please.  So the advantages.  Well, single primary responsibility has clear advantages; if something goes wrong, you're going to go after your main contractor, you know that you've got that as a single point of recourse.  Obviously it doesn't mean you didn't have recourse elsewhere, but you have that comfort that the main contractor signed up to do everything.  I mean, there are disadvantages to that too, particularly in this market where the insolvency risk is unquestionably higher than it has been in the past.  If we just cast our minds back to few years ago when Carillion went into insolvency, that really will have left a number of key players really quite stung in terms of their single point recourse.  You know, imagine being … having just had a development built and you have signed a build contractor, it goes into insolvency, your single primary responsibility for design has gone.  And obviously you have your consultants and your subcontracts [*] but, you know, your key design and build benefit has gone in that sense.  But one of the other advantages really is the cost and time are really relatively certain.  There's only going to be specific circumstances in which that can increase or that can change, and those will be set out quite clearly in the contract.  Okay, next slide, please.  So the disadvantages,  Well, the client clearly has some degree of reduced control because the designers … so its main parties who were originally engaged, transfer across to the contractor.  That contractual relationship doesn't exist anymore.  I mean, we do make sure that the client has a continued contractual relationship with those people that have transferred because we'll make sure there's a warranty from those transferred parties back to the original client, but really, one of the biggest risks is actually the potential for reduced quality.  I mean, it's no … it's very well known that contractors have low profit margins and that can often result in some sort of price engineering try in, because, you know, ultimately, a main contractor will be trying to get the job done, not only on time, but as cheaply as possible within the remit of what he can actually do under the contracts.  So we just need to keep an eye on that throughout the development cycle, throughout the phases of the development.  But there are ways you can mitigate that.  It's not like a client transfers all responsibility over and then doesn't have any contact with the designers.  That's absolutely not the case, and there will typically be some form of design review procedure in place.  So the client may … the original consultancy appointments may well set out services that will be provided back to the client from the consultant once the appointments have transferred to the contractor, or there may be separate client monitoring team appointments put in place to deal with that process.  Okay, our next slide, please.  So this is the final procurement group I wanted to talk about today.  You're probably looking at this and thinking this looks very different to the other two, and it is very different.  Again, you know, you have your client at the centre, the procurer of the development, but the key feature here is that there isn't a single build contract so you don’t have one building contract like you do with traditional design and build procurement.  What happens here then is that, at the beginning, when the client decides that it wants to use construction management, it will engage a construction manager who is a services provider consultant, and they have an organisation and management role only.  The construction manager will go out to the market and arrange for the client to enter into its consultancy appointments, but also a range of trade contracts.  And for complicated projects, which CM is often used for, you will have potentially dozens and dozens of trade contractors, and each of those trade contractors will be responsible, many of them for design and build, some of them just for works.  But what you effectively have here is many, many contracts where the contractor is responsible for work.  So you don't just have one contractor who is responsible for the works, there will be many.  And that does come with certain advantages and disadvantages.  If we just move on to the next slide, we can go through those. So, the advantage is that with construction management you do get a good degree of flexibility.  You can get an early start on site, you don't need everybody there at the beginning, you can just get your early packages in so if you need to do some tiling works or some boring or something, you can get those packages on site early but not incurring costs elsewhere with other packages.  And repeat users can build up long-term relationships and when we say this, the thing is, with with construction management, many trying to use it will be repeat users of that procurement and they will … there are certain key players that are very … typically, we use this a lot and we'll contract if it will work on a construction management basis.  So the advantages of the clients continuing direct relationship is control.  It's direct payment.  It's in control of their payments, it's not passing money down at all.  It has those direct relationships.  This can in turn reduce the cost.  If we just move to the next slide.  The issue, of course, is the … the biggest risk with construction management is that you have several different packages, works packages, and therefore you're relying on one package to complete on time so that the next can start, and if something goes wrong, well, there's a delay.  There is a real potential for knock on effects, delays, almost like a domino effect across all trade contracts, and that does happen and it needs to be managed very carefully.  And that's why, as the slide says, it requires action an involvement by an experienced client.  It's not for those who are inexperienced in construction, yeah, it's very … it just requires a lot of experience.  And also you don't have your … there's no single point of responsibility, so that has the same disadvantages as I mentioned earlier.  But, you know, construction management can be very well utilised.  It's very good for bespoke projects.  So if you're building high-end residential, it may be that actually construction management is appropriate because you need those specific types of services or very specific types of luxury products that can be sometimes more easily utilised through this type of procurement.  Next slide, please.  Yeah, that is actually … so that's the end of my piece on procurement.  Obviously we'll take any questions at the end, but I'll now hand over to Ben to discuss planning.  

BG:  Thanks very much, Matt.  Cheers for that.  Good morning, everybody.  For those that you've joined the previous sessions, you're probably more likely to have seen my esteemed colleague, Charlie Reid, deal with planning.  My name is Ben Groves and I'm the other balding Senior Associate in the Planning team here at Ashurst.  And today I'm going to talk about planning in the context of post-acquisition.  Quite frankly, we could deal with the whole planning regime under this heading, but before you mute me or sign off, don't worry, I'm not going to deal with that.  I'm just going to canter through a few high level things that I think are worth noting to you in the context of planning post-acquisition of the site.  So, Rory, thanks very much, mate.  So first of all, just in terms of setting the context, what type of acquisition is it?  So have you bought the site with the benefit of planning? If you have, then what you're really looking at is just delivering a planning permission that's already in place.  If not, have you bought the site free from planning?  If this is the case, then you're going to have to go through the whole of the planning regime and the planning process to get a planning permission that you can then deliver.  Although we're talking about post-acquisition, quite a lot of the time you will have sale contracts which are subject to planning.  So obviously the sale won't go through until you've got planning permission.  I raise this now because if you're in that boat, then you will always need to, and this is a point to really consider because clients often forget about this once they've got into the planning process, is that you would have entered into obligations with Dart and planning in your subject planning contract.  That will set obligations in terms of timing, approval rights from the seller, so you need to bear that in mind from the outset because it will have to build into your timetable and what you can and cannot do during the process.  I'll touch on that as I move through the rest of the slides.  So, this is just a high level overview of the things I'm going to be talking about today.  So just talking about what is the development you'd be looking to deliver; what type of application do you think you want to submit; the actual submission of the application; determination of the application by local planning authority; challenge period, which you always need to consider at the end; and then just some high level views as to things you need to think about when you're actually delivering the development.  So, first of all, what kind of development is it?  So you'll probably have an idea of what it is you're looking to develop before you've acquired the site.  But now you've acquired the site, or that you're actually looking at planning properly, you will need to consider this in more detail.  So, first thing first, is planning policy.  So any planning application will be determined in accordance with planning policy, and planning policy is set at both at the national, regional and local level.  So, national, it's the NPPF, the National Planning and Policy Framework.  Regional, so if you're in London, for example, it's the London plan.  And then there's local, so your local plan which would be adopted by your local planning authority.  So, together, these documents will set out the policies for planning in your area and that relate to the site you've bought, and they will give you an idea of what it is you'll be able to get planning for in terms of the use i.e. resi, commercial, employment, or other sort of general concepts in terms of height and design.  So this is these are the documents you will really need to consider from the outset, and you'll need to get your technical team and your planning consultants on board to look at these, to work out exactly what you're likely to get planning permission for.  Of course, you can try and get planning permission for things that aren't … that won't accord with policy, but that's going to be a much more difficult process, so it's always better to know what the planning process from the outset.  Second one, viability.  For some of you, this might have a particular sort of resonance because viability and planning normally refers to affordable housing.  And if you're doing a resi scheme, for example, the amount of affordable housing you can provide is … often relates to the viability of the scheme.  And although that is something that's important and always bear it in mind, in relation to resi schemes, viability here, I just mean more generally as in does the scheme that you're putting together stack up?  Does it commercially work?  And it might seem like an obvious point, but it's obviously something you need to think about at the start.  Site constraints.  So you would have done your DD at the start and, as we discussed under the previous sessions, you'd have looked at site constraints and things like that.  But now you've actually got a scheme in mind, you need to go back through this process and remind yourself what the actual site constraints are.  So, can you deliver the whole of the site within your red line?  Do you actually … do you need to go up quite closely to highway?  Do you need to overlap a highway?  Or actually, do you need to think about stopping highway up all together to increase the limits of your development parcel?  These are all the things you really need to consider at the start.  And, just a point of caution, the things that we do see quite often is that you need to consider this, not just on the ground floor, but obviously if you've got a development that goes up, you need to think about the other layers of development as well.  Because although the ground floor you may not overlap the highway, actually, if you've got balconies or balustrades and things like that which may overlap the highway, you need to consider these from the outset rather than having to realise them once you got your foundation in and then having to sort of deal with them at that stage.  Finally, a self-serving technical team.  You need to get a good technical team on board from the outset.  So this is planning consultants, architects, highways consultants and, of course, lawyers.  The earlier you get your team on board, the better your position you'll be in to get a robust planning application together and the greater your chances are of getting your planning permission granted, and in a form which is implementable and allows you to deliver the development in a timely fashion.  Right, next one.  So you've decided on what your scheme is, generally.  You don't need to think about what type of application you're going to submit.  So there's two types, there's full or outline, that I'm just going to talk about very briefly here.  So full is essentially you are seeking detailed planning permission for everything.  So the benefits of this are that once you've got it, you're pretty much good to go, subject to complying with the usual conditions.  You don't need to come back for any reserve matters or anything like that.  So you're able to press on quickly.  The downside is, is obviously if you're getting detailed planning permission, you need to work out the detail from the start.  So there's the costs and the time at the front end that you need to take into consideration if you're going for a full application.  Outline, so this is basically you'll get planning permissions for the concept.  So the idea, the principle of the development you're looking for will be grants permission, but certain things, reserve matters as they're known, will be reserved and you will then have to come back with details for those.  So those are things like landscaping access and design.  Again, the benefit of this is that you can probably spend less money upfront and then get the principle of the development ticked and granted, and then spend the money afterwards knowing that the principle's there.  The downside, of course, is that there's probably a longer process involved, because you need to work up the outline, you need to get the outline, you need to come back and get your reserve matters.  The other thing just to bear in mind when you're thinking about application, and this is really just when it comes down to timing, is whether your development is going to be EIA development.  So this is essentially certain types of development, due to their size, will require an environmental impact assessment to be carried out.  This is essentially just looking at, and working out, the impact that development might have on the environment.  The reason I note this is because an environmental statement is quite laborious.  It takes quite a lot of time to put together and it can be costly and timely for the developer, so it's something you need to factor in from the start.  In terms of timetabling, you also need to consider it because if you are applying for an EIA development, the application determination will be longer.  So you're looking at 13 weeks rather than the usual 8 weeks.  Right, so submission of the application.  In itself, not technically that difficult.  You normally, you'll get your planning consultants to do it.  The reason I raise it, just as a separate slide, is just going back to this concept of if you've entered into a subject of planning side agreement, you will likely be under various obligations regarding the application process, one of which will be that you probably won't be able to submit an application until you've sent it to the seller for them to approve.  So I raise this just in terms of timetabling, because what often happens is we get through the process, the client's ready to submit the application, and then we realise, "Ah, right, perhaps we're need to get the seller to approve it.  So this is just a sort of a note to bear in mind the background contractual relationship and you need to bear in mind those so that you build it into your timetable so you're not getting to a point where you think, "Alright, we're ready to go" and then realising that you need to go back a step.  Right, so your application's in and it's now about the determination of the application.  So planning applications are determined by your local planning authority.  They will be determined, as I said earlier, in accordance with planning policy.  So you'll submit your documents, you'll have an officer assigned, probably, to your application, and the application will be reviewed internally.  A point to know is that obviously the planning process is a public process, so everything you submit will probably be put online, or should be put online, and would be made available to the public.  This also really goes now for viability assessments as well.  Gone are the days where you would be able to hide behind confidentiality for that so, yeah, the basic premise is that if you're submitting something to a local planning authority, you'd need to expect it will be out in the public domain.  So your application's there, it will be determined by the local planning authority, and you need to be involved in this process the whole way through.  So you need your technical team to be up to speed, liaising with the local planning authority and reacting to any comments that they receive or that the public make.  Once the application has been determined, you will most likely get an officer report which they will have, having looked at the application and determined it on the basis, and they will put together a report which goes to the planning committee and it will give a recommendation as to whether the planning permission should be refused or granted.  And if it should be granted, whether it should be granted subject to conditions.  Again, you want to be very much involved in this process because, as it says there on number 3, planning conditions, the office's report will most likely have, if they recommend planning permission to be granted, some draft conditions which they've included in the office report.  You need to be involved in the process of getting these draft conditions put together.  This is really important because there's no point having a planning permission if you can't actually then implement it.  So you need to be involved in the drafting of the conditions and you need to be liaising with the local planning authority, alongside your technical team, the whole way through so that you understand the conditions that are being imposed, and you know, and you can make sure from the outset that they're going to be conditions that you can actually comply with, in reality, once you've got the planning permission at the other end.  Finally, section 106 agreements.  So these are obviously where the lawyers come in, in quite a big way.  Very high level.  Hopefully most of you probably know what section 106 agreements are, but essentially they are agreements entered into by developers and landowners which contain obligations which are required by the local planning authority in order to grant permission and make the development acceptable in planning terms.  Quite commonly, these would be obligations to pay financial obligations, maybe undertake some highways works, and obviously if it's a resi scheme, they will be where the affordable housing obligations are contained.  So, again, as with the draft conditions, you need to be on top of any heads of terms for a section 106 agreement as early as possible.  You need to be engaged at the council regarding what the heads of terms are going to be, and what the obligations are going to look like.  Because, once again, there's no point getting to a committee with a committee report which has a whole host of section 106 possible obligations in there which you're not going to be able to sign up to, or not going to be able to comply with, if and when the section 106 agreement is entered into.  Next slide.  Fine.  So you've hopefully got an officer recommendation for approval, you've gone to committee, committee have approved it.  Then, depending on whether you've got section 106 or not, if you've got a section 106 then most likely you will enter into the section 106 on the same time the planning permission will be granted.  If you have no section 106 and you don't need to wait for that, and your planning permission is granted thereafter.  Once you've got your planning permission, you then have the process of a challenge period.  So a planning permission is obviously a decision by a public body, so it can be judicially reviewed.  The judicial review period is six weeks.  So, quite commonly, people will not wish to do too much in terms of implementing or doing too much work under the planning permission until the challenge period has expired.  Once it's expired, you're free to move on without the risk of challenge being there any longer.  Finally, delivery of development.  So, again, just going to rattle through some sort of high level concepts on this.  So, first of all, implementation period.  A bit of a techie concept, but planning permissions don't last forever.  Most permissions will be granted subject to a condition which says they need to be implemented within three years of the date grant.  So you need to be able to get on and lawfully implement that permission within the time period which, as I said, is normally about three years.  This isn't just a process of quickly putting a spade in the ground because to lawfully implement permission, you need to have lawfully ticked off all of the pre-commencement conditions.  So this goes back to when you were looking at the draft conditions before the permission is granted.  You need to consider all the pre-commencement conditions that are attached to your permission and make sure that you know what they are, how you need to comply with them, and that you have complied with them and discharged them in full before you implement, or before you can lawfully implement, your permission.  If you don't do that, you run the risk of the permission expiring and you being left with no planning permission at the end of it.  So to discharge conditions, as we touched upon, there's obviously the pre-commencement conditions, but you'll most likely have a whole host of other conditions attached to your planning permission, particularly for big schemes.  So you have preoccupation conditions and conditions which require compliance with on an ongoing basis.  So, again, best thing to do, and this is a top tip that a lot of our clients use, is get a condition tracker set up from day dot.  Get the tracker set up, all the conditions there set out clearly, when they need to be complied with, what needs to be done, and who's responsible for complying with each condition.  That way, you're on top of the process, and there's less likelihood of something going wrong.  Community infrastructure levy.  I'm not going to dwell on this long, because it's just a whole talk on its own.  Essentially, this is a land tax.  So if you are granted planning permission and the council has adopted a community infrastructure, a charging schedule, then certain rates will attach to the floor space permitted.  So, quite commonly, resi.  So if you have a resi developments permitted, there will be a flat rate done on floor space, which will create a liability for sale in relation to that development.  It's all pretty sort of techie and it does need to be looked at specifically by your planning consultant and your lawyers to make sure you don't miss any of the deadlines, because there can be pretty harsh penalties for not complying with the notes that need to be submitted or submitting the necessary assumption of liability and commencement notices.  Section 106, as we said, you may or may not have entered into a section 106.  If you have, then like the conditions, get a tracker together early so that you know when your conditions need to be complied with, who's going to comply with them, and therefore you know that they're all going to be ticked off throughout the process.  And that really leads into the last point, paperwork.  Make sure that from the very start of the process, you've got a clear paper trail, particularly post-planning permission.  Whether you're going to look to flip the site later on, or whether it's resi and you're looking to sell off residential parcels, someone will be DD'ing the site at a later stage.  You need to make that process as painful … not as painful, better not make it painful … as least painful as you possibly can.  And the best way of doing that is to make sure that you've got a clear paper trail the whole way through which sets out clearly how you've complied with conditions, the conditions have been discharged, the 106 obligations have been discharged, and that certain other liabilities have been ticked off.  That's everything from me today, and I'm now going to pass you over to James to deal with environment.

JN:  Hi, everybody.  Thanks very much and, yep, so just to summarise … or you can move on a slide.  That's me, I'm James, I sit in the Environment team.  An absolute pleasure to speak to you this morning and just to confirm what I'm going to cover here.  We're just going to focus on the most common environmental issues during development.  So it will be a quick walk through remediation, construction noise, environmental incidents, waste and nuisance.  And the purpose of this morning's talk is really just to talk about compliance and potential legal risks associated with each of these issues.  Next slide, please, Rory.  So starting with remediation.  As developers, you'll be aware that given the constraints in the planning system and the UK's industrial heritage, development frequently nowadays takes place on contaminated land.  As a reminder from our early earlier seminars, if you as the developer are the party implementing a planning permission, then the starting position is that you'll be liable for remediation pursuant to planning law.  When it comes to a contaminated site, the role of planning is to ensure that the site is suitable for its new use and to prevent an unacceptable risk from pollution.  It's important to note that the position of planning is not to fully remediate or cleanse the site or to remove all contamination, it's just to get it such that it's suitable for use but there can still be ongoing liability, having implemented planning.  And so to achieve the right level of remediation, the planning system typically goes about this via the attachment of planning conditions to the planning consents, and these usually take a three-stage structure, which is set out on this slide.  The first is site characterisation.  That's basically site investigations, so phase 1 or phase 2 surveys, to understand the extent and the nature of contamination.  Second stage will be the submission of a remediation scheme to the local authority, and following approval, implementation of such a remedial scheme.  And the final stage will be the monitoring and verification of the effectiveness of the scheme that you've implemented.  Again, this typically requires submission of verification reports to local authority so it can be shown that remediation has met the required standard.  The Environment Agency is a statutory consultee as part of the planning process and so where there is contaminated land, while the local authority is not obliged to follow the Agency's recommendations, they will typically be influenced by their view.  To tie this together with some of the earlier points, in particular Matt's piece in relation to construction, there is a significant overlap here with the main construction contract.  So when you're dealing with a contaminated site, you do need to be considering, under that contract, how contamination is managed.  So, in particular you should be questioning who, pursuant to contract, is liable for contamination of the site.  Is it the main developer or a specific remediation or groundworks contractor?  You want to be thinking about the experience that the contractor you've appointed has in successfully delivering this type of remediation project, and whether they are holding a suitable level of insurance.  You also need to be getting your technical consultants to look at the work spec and to understand the standard to which the site is being mediated.  And also from a contractual risk perspective, you need to be considering who will be liable for what's called unforeseen ground condition risks.  So essentially the unknown.  The site investigations, quite often described as cherries on a cake, you drill various boreholes in different areas.  But that's not necessarily going to reveal everything.  So if, during your enabling works, you come across a buried tank or asbestos, how is that liability going to fall.  And as we'll come on to see shortly, there is potential for nuisance type liabilities arising from remediation, in particular, odour, arising from soil treatment.  Next slide please.  The next topic I've got to talk about here is construction.  Noise of the construction frequently gives rise to construction noise which may impact residents or businesses.  That might be the construction activity itself, heavy piling works, or it might be the associated activities, such as early morning deliveries, which arrive typically before seven o'clock.  And we're finding that people are becoming more and more aware of their routes of complaint and legal redress and local authorities have been coming under greater pressure to use their statutory powers.  And in terms of those statutory powers, although it's quite an old piece of law, the Control of Pollution Act is still in force in relation to construction noise.  And this regime specifically addresses, essentially construction uses.  And there are two key provisions within COPPA.  The first is section 60.  And what this does is it gives local authorities the power to serve a notice imposing requirements on the way in which development works are undertaken.  So, if you've run a developer site, you may, at some point, be unfortunate enough to be served with a section 60 notice by your local council.  And, in that notice, the local authority can prescribe certain ways in which the works are undertaken.  So that can include the use, or the prevention of use of certain plant and machinery.  It can specify limited working hours and it can specify specific noise levels arising from the site.  Being served with this type of a notice doesn't mean you have committed an offense, but it sets out the relevant framework within which you must operate.  And then, if you breach terms of that notice, for example, the permitted working hours or the noise levels, then that will constitute an offense, and you can be prosecuted.  So, if you're served with a section 60 notice, you need to be assessing the terms of that notice and whether that unreasonably restricts your works and whether it will impact the project's timetable.  If it does, you've got 21 days to appeal the notice at the Magistrates Court.  And so there is always an imperative to move quickly on this type of statutory notice.  The next key provision is section 61, and we typically see section 61, prior consents, used on much larger development schemes.  And Section 61 provides a route for developers to apply, or prior consent, for noisy works.  And the main upside of obtaining a section 61 consent is that the developer and the local authority establish, in the notice, what is considered reasonable construction noise, for example, permitted hours of work, and the noise levels, before you go ahead and commence that work.  Again, for these much larger projects that run for numerous years, the precise conditions in a section 61 consent can really have a significant impact on timetable.  If, for example, as I've seen, you have construction hours being reduced by a local authority, who is faced with numerous complaints, this can significantly impact delivery timetables, lead to a consequential delay under construction contracts, and increase costs by several millions of pounds.  And so, if you do have this type of unreasonable condition, again, you've got 21 days to appeal this to the Magistrates Court, and your legal team should be structured rapidly.  Next slide, please, Rory.  So we're looking now at environmental incidents.  The type of environmental incidents, give you a, kind of, feel that we see, with a couple of examples seen recently, the spillage of hydrocarbons from an underground tank to surface water.  And we've also seen the discharge of silt laden runoff to a stream, again, from a development site.  Now, from a legal perspective, both of these incidents constitutes an unpermitted and unlawful discharge of surface water under the Environmental Permitting Regime.  Now, to commit an offense, a party has to either cause or knowingly permit what's known as a water discharge activity.  And, broadly speaking, that's really the discharge of polluting matter to surface water.  And it's an offense to do that without a permit.  So those triggers, in terms of legal triggers, are causing and knowingly permitting, just to give you a feel of what that is.  It's, kind of, a common theme throughout Environmental Law offenses.  So causing, really means doing a positive act to bring about pollution.  So that might be the release of silt laden runoff from a … some kind of a pond or lagoon into a stream.  Knowingly permitting, means knowingly failing to prevent something.  So that means, when you are aware of something and you've got the ability to stop it, but you don't.  And so, given the way that these legal triggers are framed, and the number of contractors you might have on site, it can be possible for multiple parties to commit criminal offenses, under the EPR, when environmental incidents occur.  A quick legal note here is that these type of environmental offenses are what we call strict liability offenses, so that means the Environment Agency doesn't have to prove fault or negligence.  They just need to show that the incidents, that's the offence, has taken place.  So the takeaway here is in relation to these environmental incidences that, given the breadth of the drafting and the way these legal triggers are interpreted, it means that multiple parties can be liable.  And so, if you are subtracting works, which is obviously a frequent part of Construction Law, you need to retain a suitable degree of oversight for those who are undertaking activities on your behalf.  Moving onto the waste slide, obviously construction sites can generate a lot of waste, typically, so arise from demolition waste, and also from extraction activities.  And the core waste related legal obligation sits in section 30 full of the Environmental Protection Act, and that's known as the Waste Duty of Care.  In a nutshell, what that means, is that if anybody is handling waste, they need to take all reasonable steps to ensure that a variety of things do not happen.  First of those, is that the waste isn't disposed of unlawfully, that there's no breach of environmental permits associated with the disposal of that waste, and to ensure that the waste is treated, kept, and disposed of in a way which doesn't cause harm to the environment or pollution.  You also need to make sure the waste doesn't escape from your control.  And, specifically, that waste is only transferred to an authorised person.  And, with a written description, that enables the transferee to know enough about the waste to deal with it properly.  So, basically, when you're passing waste on, down the waste chain, the key point here is you need to ensure where that waste is going, and you are handing it over to somebody who is lawfully allowed to receive that waste.  And you tell them clearly what that waste is, such that they know how to dispose of it.  It's a legal offense not to comply with the Waste Duty of Care.  And that is something we see … an offense we see committed quite frequently and prosecuted quite frequently.  If you do breach the Waste Duty of Care, you can be liable on protection to an unlimited fine.  And so, again, as with pollution instance, it's important to be aware, when you're subcontracting waste works, to keep a suitable degree of oversight.  To give you a feel of how this arises in practice, we see prosecutions for fly-tipping offenses.  Now you might think, for major contractors, fly-tipping would be unusual, and generally it is, but this happens through the waste supply chain.  So, sometimes waste can be consigned to somebody who then fly-tips it.  So they dispose of it unlawfully at, essentially, a commercial gain.  In that instance, the Regulator is most likely to go after the party who fly-tipped the waste.  However, if they can't find that party, or because of the way they're approaching the offense, they quite frequently seek to investigate the supply chain and how that waste was passed on.  And so, where you're a major developer, if you cannot show that you've got appropriate policies and procedures that you adequately diligenced who was taken in control of that waste, and that you've used the requisite waste transfer notes or consignment notes, then the Regulator may also seek to prosecute you, for passing the waste on to, essentially, somebody who is an unlawful rogue operator.  Final note here, just in relation to waste on construction sites, quite frequently you have a variety of waste types including specific hazardous waste, which can include asbestos, by using made ground, and attaching to that, upper class of hazardous waste, there may be additional legal requirements under [*] with asbestos [*].  Next slide, please Rory.  So considering … nuisance here is my final slide.  Nuisance from construction sites can be caused to residents and businesses in a number of ways.  To give you a feel, the kind of claims we see most frequently are noise, odour, vibration, and the migration of contamination from a development site to adjoining land.  Where nuisances do arise, they're most likely to be addressed through two routes, which I've got on the screen here.  The first, a private tort law claim, so civil nuisance.  And, the other route is regulatory action by local authorities.  Before looking at these in a little bit more detail, it's worth pointing out there are other avenues, depending on the exact situation at the site.  So it could be that if there's still an environmental permit in place, the EA takes action under that permit or there is also a possibility of a wider concept of public nuisance.  But, for our purposes here, these are the two most common routes through which nuisance liabilities rise through construction.  Looking first at civil nuisance, that is concerned with preventing what is called an unreasonable interference with the enjoyment or use of land.  And so, in assessing claims, what the courts would do, is they will undertake a balancing exercise between the rights of the owner of the land, on one hand, to do what they wish to do on their land.  And the right of the neighbour not to have his use or enjoyment of land interfered with.  An example would be a noisy factory next to a residential house.  And so when considering whether an actual nuisance arises, courts will look at a variety of factors, the key factors they look at include duration of the nuisance, the severity of the nuisance, and also the nature of the neighbourhood in which the alleged nuisance is taking place.  It's a relative measure.  So what might be a nuisance in a residential area, might not be a nuisance in an industrial area.  And if claims are brought, and this is where it starts to impact developers from a liability perspective, is if claims are brought, claimants typically seek any injunction to require a nuisance to be abated.  And they typically will also seek compensation, for example, damage to property, or an amenity loss, because they have had to suffer, say noise or odour throughout the duration of construction over a number of years.  And so that's the route, which liability can arise from a developer.  Finally, we've got statutory nuisances under the Environmental Protection Act. Just quickly to say here, that local authorities have a duty to inspect their areas to detect statutory nuisances and, if they find that a statutory nuisance occurs, then they are obliged to serve an abatement notice to require the abatement of that nuisance.  And so, again, this can impact construction costs.  So, overall, as I've just shown over those few slides, construction waste can give rise to a variety of environmental concern and potentially enforcement action or prosecution and legal liabilities for developers.  The takeaway is that everybody on site should be aware of these key environmental issues and how compliance is secured through site operating procedures.  If you do have non-compliances, if you're served with statutory notices, or regulatory inspections occur, then it's important to pull in the correct team, in terms of your operations team and your legal team, to ensure that these issues can be handled appropriately, and that's the end of my section.  Thanks very much for listening, I'm now going to pass back to Rory.  Thank you.  

RM:  Thank you very much James.  I think if we get everyone else back on the cameras.  We've got the … the point you've been waiting for is, are there any really complicated, complex questions for you to struggle over?  Let's see.  So, first one, Ben?  The person asking this question has … they appreciate it's a high level run through that you've given, but, how does the planning permission sit alongside the requirement or need to undertake works on a public highway, which may be required in order to deliver the development.  

BG: Thanks Rory, I knew referencing highways was going to come back and bite me.  So, again, highways could be part of a, sort of, its own section, but very, very high level.  So, if you've got a highway, then you … if you want to do works over it in terms of oversailing the highway or undersailing the highway, you'll need a license from the local Highway Authority.  It is obviously, of course, possible to stop up a highway, therefore create a wider development parcel so that you can build on the land if you actually own the subsoil off the highway.  The stopping up process will depend on the facts of the case and an application can be made if that is something that you think is worth pursuing.  Just in terms of trying to keep this high level, in terms of works on the highway as well.  Obviously you can't just go onto a highway and do works.  If, obviously, if you're looking to create a new access or something like that, to your development, you'll likely need to enter into a 278 agreement.  So that's an agreement with the local Highways Authority to do works on the highway.  So, join in a new bell mouth into the existing highway.  If you've got a big development, or like a big resi scheme, and you're looking to actually build estate roads, then you're looking at a section 38 agreement, and that's essentially just an agreement you enter into at the local Highways Authority which sets out the parameters for the road you're going to build and then allows it to be adopted by the local, Highways Authority.  So it becomes a publicly adopted highway.  And the costs of maintaining it sit within the local Highways Authority.  And that's obviously a route that quite a lot of resi developers go down because they don't want the roads to sit with the management company.  But would rather it sit with the local Highways Authority.  Very, very high level, I don’t think there's much point going into it in any further detail at this stage.  But thank you for that question.

RM:  Thanks Ben.  We'll move on to a different topic now.  So, this is for you, Matt.  Do you think that design and build procurements with the contractor takes all risk approach will continue in the future?  Or will the other forms of procurement you mentioned, or new types of procurement, overtake design and build in popularity and use as well?  

MP:  Thanks Rory.  I mean, I suppose that's quite person of the moment as we … yeah, it's very well known that contractors have really small profit margins and one of the problems with design and build procurement is that it does … some people consider that actually it's a bit of a barrier to innovation.  Because you … we're just putting all of the responsibility on one party, it just means the costs are so tight.  And when we think about the environmental challenges that we have with construction, such as the overuse of concrete or the types of materials.  And the fact that the world is looking to become more efficient with technology etc.  It's difficult to see how that can be achieved within the traditional forms of procurement, including design and build, and I think that we will see a greater need for reliance thing and collaborative, sort of, deeper collaboration between parties.  So we may see the use of multi-party contracts where a lot more risk and reward [*] whereby, there's a, sort of, a pain gain, kind of mechanism within those contracts so that parties can share more equally.  I think that, you know, the industry does need to change and probably will do, will start to change quite soon. 

RM:  Interesting, thank you very much Matt.  And the, finally, moving onto an environmental question, bit of a short question for you James.  So it talks about environmental defences, are these criminal defences.

JN:  Yeah, that's a good point.  And people think about the classification of these offences and the stigma that is attached to them.  Taking a broad brush approach, typically environmental defences are criminal in nature, but over the last ten or 15 years, Environmental Law has gone through, essentially, a transformation where civil sanctions have been slowly introduced.  This is something we saw in different jurisdictions around the world and that's been pulled into the UK regime.  So, I guess, just to summarise the position we're now in, is that, typically, if you're your main environmental defences, the Environment Agency retains the ability to prosecute, i.e. it's a criminal offense, and there can be criminal sanctions.  However, there are now a suite of civil sanctions for most offenses, whereby companies can essentially avoid the stigma of a criminal prosecution, so they can avoid that day in court where they are sanctioned by a judge.  What you need to do is to perform an offense analysis.  So, for each offense that may have arisen, you need to understand whether there is that ability of criminal sanction or civil action.  And if that alternative exists, that typically is something you might like to see where to pursue.  But, in the round, you need to consider that as part of your own strategy, and that's something that we help with, you know, on daily basis with our clients and something we're here to help people with.  

RM:  Thanks, James.  So some potentially worried people must get in contact.  Well, leave it there, as we're on time now.  Thank you all for listening and thank you to the speakers as well.  If you have any other questions, you can see our details, they're up on the screen.  So do get in contact.  And then, just the final plug for our final session in the Development Life Cycle series, which is next week, and it is on the final stage of disposing of this asset that you bought and built out.  And we'll talk about the planning, environmental, tax, finance and construction aspects.  So, please do sign up, all the usual channels will be advertised for Ashurst, and we look forward to seeing you next week, hopefully.  Thanks very much.