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ArticlesAmendments to the ‘Construction Act’ introduced to ParliamentOn Friday 5 December 2008, the ‘Local Democracy, Economic Development and Construction Bill’ (the ‘Bill’) was published. The Bill intends to amend the ‘Housing Grants, Construction and Regeneration on Act’ (the ‘HGCRA’) of 1996. At the present time, only ‘construction contracts’ as defined by the HGCRA entered into after the Bill comes into force and relating to construction operations in England, Wales or Scotland will be affected. The main amendments proposed by the Bill are; ● Payment regime changes. The Bill only allows three methods in which payments may be made under qualifying construction contracts. ● Changes related to the right to suspend performance for non-payment. It is proposed that there are rights to suspend parts of the works as well as all of the works, and it is also proposed that there should be a right to obtain an extension of time and reasonable costs for both suspension and remobilisation periods. ● Pay-when-certified and pay-what-certified-clauses to be banned. The Bill aims to ban pay-when-certified and pay-what-certified clauses. ● Adjudicators to have the power to correct their decisions. It is proposed in the Bill that an Adjudicator should have the right to correct any clerical or typographical error arising by accident or omission in his decision. ● Pre-adjudication costs agreements to be banned. The intention of the Bill is to ban agreements allocating adjudication costs unless that agreement is made after an adjudication action commences. ● Construction contracts to be in writing requirement to be reviewed. The Bill intends that the scope of the HGCRA will now include for oral and partly oral contracts. The only parts of contracts that will need to remain “in writing” are adjudication agreements providing for rules other than the Scheme to govern adjudications (failing which the Scheme’s adjudication rules will apply). The House of Lords’ first debate on the Bill is set for 17 December 2008, and the Bill is expected to be enacted by the end of 2009. Updates on this matter will be given in future articles. |
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