It is not uncommon for construction contracts to contain provisions which require a contractor to notify a claim for an extension of time or additional payment as soon as practicable and in any event within a specified period of time.

See, for example, the first paragraph of clause 20.1 of the first editions (1999) of the FIDIC Red Book, Yellow Book & Silver Book, which states:

“If the Contractor considers himself to be entitled to any extension of the Time for Completion and/or any additional payment, under any Clause of these Conditions or otherwise in connection with the Contract, the Contractor shall give notice to the Employer, describing the event or circumstance giving rise to the claim. The notice shall be given as soon as practicable, and not later than 28 days after the Contractor became aware, or should have become aware, of the event or circumstance.”

Frequently, such a notice requirement will be linked to a time bar. For example, the second paragraph of the said clause 20.1 states:

“If the Contractor fails to give notice of a claim within such period of 28 days, the Time for Completion shall not be extended, the Contractor shall not be entitled to additional payment, and the Employer shall be discharged from all liability in connection with the claim.”

NB: The second editions (2017) of the FIDIC Red, Yellow and Silver Books contain similar provisions to clause 20.1 quoted above with regard to both claims by the contractor and the employer.

Single and dual condition precedent time bars

It seems clear that in the case of FIDIC Red, Yellow and Silver Books, the contractor’s claim will only be time-barred if he fails to notify it within 28 days (see the second paragraph of clause 20.1 quoted above). This may be described as a single condition precedent time bar.

However, if the second paragraph of clause 20.1 quoted above was amended so as either to delete the words “of 28 days”, or to state that the contractor’s claim will be time-barred if it fails to comply with the first paragraph of clause 20.1 (neither would be an unusual amendment), what would be the effect? Would either such amendment mean that, in order not to have a claim time-barred, the contractor would have to notify its claim as soon as practicable and within 28 days? If the answer is in the affirmative, the provisions would amount to a dual condition precedent time bar.

The Towergate Financial (Group) case


The recent case of Towergate Financial (Group) Ltd and others v Hopkinson and others [2020] EWHC 984 (Comm), which came before Mrs Justice Cockerill DBE, considered the above issues, albeit in the context of a share purchase agreement (SPA) rather than a construction contract. The trial was conducted remotely over two and a half days under the Court’s Covid-19 Protocol, and concerned certain preliminary issues in relation to a time bar in an indemnity provision in an SPA. The indemnity indemnified the purchaser against potential claims by third parties that the seller had mis-sold financial products prior to the date of the sale.

Some aspects of the indemnity provision had already been considered by Mr Justice Leggatt in Towergate Financial Group v Clark [2017] EWHC 2330 (Comm), and then on appeal to the Court of Appeal in Hopkinson & Ors v Towergate Financial (Group) Ltd & Ors [2018] EWCA Civ 2744.

Clauses 6.7 and 5.12 of the SPA

At paragraph 70 of her judgment, Cockerill J set out the time bar provisions in question (which were contained in clause 6.7 of the SPA), stating:

“I reiterate the entirety of the relevant clause first, for ease of reference, striking out the words which are effectively removed by the Court of Appeal Judgment and the sub-clauses which are not apposite to an indemnity.

The Purchaser shall not make any Claims against the Warrantors nor shall the Warrantors have any liability in respect of any matter or thing unless notice in writing of the relevant matter or thing (specifying the details and circumstances giving rise to the Claim or Claims and an estimate in good faith of the total amount of such Claim or Claims) is given to all the Warrantors as soon as possible and in any event prior to:

6.7.1 the seventh anniversary of the date of this Agreement in the case of any Claim solely in relation to the Taxation Covenant;

6.7.2 the date two years from the Completion Date in the case of any other Claim; and

6.7.3 in relation to a claim under the indemnity in clause 5.9 on or before the seventh anniversary of the date of this Agreement.””

Also, clause 5.12 of the SPA stated:

“Each of the persons giving the indemnity in clause 5.9 should be entitled to require the Purchaser or the Group at the expense of such person(s) to take all such steps or proceedings as such person(s) may consider necessary in order to avoid, dispute, resist, mitigate, compromise, defend or appeal against any relevant claim which will if successful give rise to liability under clause 5.9 …To enable such person(s) to decide what steps or proceedings should be taken, the Purchaser shall disclose in writing to the Vendors and their respective spouses all relevant information and documents relating to any claim or prospective liability … and (if such person so requests) delegate entirely to them the conduct of any proceedings …”

The SPA was dated 5 August 2008, and a disputed notice of possible indemnity claims was given in a letter dated 29 July 2015 (i.e. 7 days before the seventh anniversary of the SPA).

Both parties accepted that clause 6.7.3 incorporated a condition precedent to the purchasers’ entitlement to claim under the indemnity. The disagreement between them was as to whether it was “a dual condition (as soon as possible/7 years) or whether, as the Claimants contend, it is a single condition (7 years)” (see paragraph 62 of the judgment).

The parties’ respective cases

The Claimants’ primary case was that clause 6.7.3 only required written notice to be given of “the relevant matter or thing” “on or before the seventh anniversary”, not “as soon as possible”. They also contended that clause 6.7.3 did not set out a point in time from which the “as soon as possible” timeline began to run.

On their part, the Defendants contended that notice had to be given both (1) as soon as possible from the point in time when there was an identifiable “matter or thing” giving rise to a claim under the indemnity and (2) within 7 years of the date of the SPA.

The Claimants also argued, as a secondary case, that, if the words “as soon as possible and in any event” did apply to a claim under the indemnity, they were too uncertain to create a condition precedent. They relied for this argument mainly on Morison J’s judgment in AIG Europe v Faraday [2007] 2 Lloyd’s Rep IR 267, which concerned a provision in an insurance contract on the insurer’s standard terms, requiring a notice to be given “as soon as is reasonably practicable and in any event within 30 days”. Morison J had held that a time bar of 30 days applied on the basis that requiring notice to be given “as soon as reasonably practicable” was not workable.

The Defendants sought to distinguish AIG Europe on the grounds that it concerned an insurance contract on standard terms rather than a negotiated SPA and had a much shorter time limit (30 days), which could be construed as a more specific expression of the “as soon as reasonably practicable” requirement.

The Defendants argued, in the alternative, that AIG Europe was wrongly decided, referring to the case of Springer v University Hospitals of Leicester NHS Trust [2018] EWCA Civ 436. In that case it was held, with regard to construing a CPR practice direction, that the obligation of a party to inform “as soon as possible and in any event within seven days of entering into the funding arrangement” required that party to inform as soon as possible if this was earlier than within seven days.

Ambiguity vs. clarity

At paragraphs 65 and 66, Cockerill J considered the often-stated proposition that any ambiguity in an exclusion clause should be construed against the party seeking to rely on that clause:

65     The focus of the argument was more on the authorities as to exclusion clauses and conditions precedent. In particular, there was a dispute over those authorities which state that although such clauses where clear will be honoured, where there is ambiguity and/or lack of clarity, that will be construed against the person seeking to rely on the exclusion or condition precedent.

66       Perhaps the key citation is that of Briggs LJ in the Nobahar-Cookson case:

“[9]     … it is well settled that contractual limitation periods for the notification or bringing of claims are forms of exclusion clause …

[16]    Recent decisions about exclusion clauses have continued to affirm the utility of the principle that, if necessary to resolve ambiguity, they should be narrowly construed, including in relation to commercial contracts.

[18]    … the parties are not lightly to be taken to have intended to cut down the remedies which the law provides for breach of important contractual obligations without using clear words having that effect …

[19]    This approach to exclusion clauses is not now regarded as a presumption, still less as a special rule justifying the giving of a strained meaning to a provision merely because it is an exclusion clause … The court must still use all its tools of linguistic, contextual, purposive and common sense analysis to discern what the clause really means …

[21]    … there remains a principle that an ambiguity in its meaning may have to be resolved by a preference for the narrower construction if linguistic, contextual and purposive analysis do not disclose an answer to the question with sufficient clarity.”

Cockerill J (see paragraph 72) considered that whilst “the resulting clause is not perfect, it is – in real terms – perfectly clear. There are a few issues with it, but they are ones which any sensible reader can resolve without any difficulty. It is not ambiguous.” She went on to find that the “clause plainly imports a dual condition precedent: as soon as possible and in any event seven years. It is clear, it is grammatical, it is workable” (at paragraph 77).

Cockerill J (at paragraph 120) also stated:

The authorities turn on clarity versus ambiguity. A clause can be clear simply by default of alternative. Here the result is that the clause is actually clear on analysis, and is the more so because the alternative offered lacks the credibility which might indicate ambiguity.”

As regards dual condition precedents in commercial contracts, Cockerill J (at paragraph 84) noted:

It could not be said that having a dual condition precedent was unthinkable, and so the general must give way to the specific: this is because such dual conditions are not infrequently encountered (e.g.: in the CPR: the Springer case being one in point, but also in commercial contracts), and there is no logical or practical reason why they should not exist.”

A further factor which Cockerill J took into account was the apparent “synergy” between clauses 5.12 and 6.7.3 – the fact that the latter provided for notification “as soon as possible” and the former required the purchasers’ participation at the earliest stages of possible claims (i.e. they were required “to take all such steps or proceedings as such person(s) may consider necessary in order to avoid……any relevant claim which will if successful give rise to liability under clause 5.9 …”).

Was AIG Europe distinguishable or wrong?

With regard to the Claimants’ secondary case, Cockerill J distinguished the AIG Europe case on a number of grounds, including: (1) in the present case the 7-year longstop date could not be taken as defining “as soon as possible”; (2) in the AIG Europe case, the 30-day period and “as soon as reasonably practicable” started from the same starting point, which was the uncertain loss date (although Cockerill J also concluded that the uncertainty of the start date was not a factor in Morison J’s reasoning), whereas in the present case it was clear that the 7-year period commenced from the date of the SPA.

Therefore, Cockerill J decided that she did not have to consider whether Morison J’s decision was wrong. However, Cockerill J commented at paragraph 110:

“I see the force in the submission made for the Defendants that the backdrop in terms of the authorities on contractual construction has moved on since that decision was given, and that it appears to be somewhat at odds with the decision in Springer.”

In paragraph 1133, Cockerill J added:

Returning to AIG Europe, I need only say that against the distinguishable background I consider that if one had to choose, I would incline to the view that the approach in Springer is to be preferred as more intellectually robust”.

Cockerill J also gave short shrift to the argument that the point in time from which “as soon as possible” ran was uncertain, noting that, in the previous case, Leggatt J had expressed the view that clause 6.7.3 could “sensibly be interpreted” to mean that it was from the time when there was an identifiable matter or thing giving rise to a claim under the indemnity.

Cockerill J’s conclusion

Unsurprisingly, having found that clause 6.7.3 required notice of a possible claim to be given as soon as possible after there was an identifiable thing or matter giving rise to that claim, Cockerill J held that the Claimants’ notice dated 29 July 2015 failed to meet this requirement. The preliminary issues were therefore determined against the Claimants and their claim for an indemnity failed.


Those drafting and negotiating time bars in construction contracts should pay heed to Cockerill J’s judgment in the Towergate Financial (Group) case. Previously, some practitioners may have thought that where a condition precedent to entitlement to a remedy requires a notice to be given “as soon as possible” (or similar) and in any event within a specified period of time (particularly where the period of time specified is short), the claim will not be time-barred if the relevant notice is given within such specified period of time. However, Cockerill J’s judgment suggests that is not the case, and that instead such a provision may operate as a dual condition precedent time bar, so that a claim given within the specified period of time but not “as soon as possible” may still be time-barred.

If you have any questions on the implication of the Towergate Financial (Group) ruling on construction contracts, please contact Chidi Egbochue.

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This article is for general information purposes only and does not constitute legal or professional advice. It should not be used as a substitute for legal advice relating to your particular circumstances. Please note that the law may have changed since the date of this article.