Construction Act - changes proposed by Government
July 28th, 2008 by GilesA draft Bill has been published by the Government to amend the Construction Act. This follows a long period of consultation within the industry and comes some 12 years after the Housing Grants, Construction & Regeneration Act introduced legislation affecting construction contracts in the UK.
Many of the clauses are designed to improve conditions for specialist and subcontractors, allowing them more easily to refer payment disputes to adjudication. The draft clauses would:
- Remove the requirement for the construction contract to be in writing in order for the Act to apply.
- Allow an adjudicator to overrule a clause in a contract that imposes an unreasonable burden on one of the parties with respect to the adjudicator’s costs. (It is not unknown for a contract to deter references to adjudication by the contractor by making him bear all the costs, regardless of the outcome.)
- Prohibit terms in a contract that make an interim payment decision – e.g. by a contract administrator- binding on the parties. Thus all disputes about stage payments could be referred to adjudication.
- Revise the statutory payment framework, including allowing the contractor to give a payment notice if the payer fails to do so.
- Allow a party that exercises its statutory right to suspend performance for non-payment to recover reasonable costs and expenses incurred when exercising this right.
For more information and the full text of the Bill go to: The Construction Act Review
Or for construction contracts visit the main site.