November 2009
The New Construcion Act 2009
In July 2008 proposals were issued to amend parts of the Housing Grants Regeneration and Construction Act 1996 (HGRCA 1996). The proposals were expected to become law in 2009 however at this stage they remain only proposals following consultation.
The amendments are intended to improve the adjudication process by ironing out ‘minor technicality’ issues and removing loopholes in the law. The risks in adjudication are changing - if you are a payee, the risks are reducing, however there are risks for payers in the new regime.
The Construction Act 1996 amendments will include the following:-
- Contracts which are made orally in whole or in part will be subject to the Act. This will result in a need for detailed evidence as to the existence and terms of the contract.
- Provisions dealing with the allocation of adjudication costs (the parties' costs or adjudicator's fees) will be unenforceable unless entered into after the adjudicator's appointment.
- Construction Contracts will require amending for new payment rules, including:
-Payment notification changes to affect paying parties in respect of payment risk.
-'Pay when certified' and other types of clause making payment dependent on the performance of obligations under other contracts, or upon the giving of notice by the paying party not allowed.
If you require any further information, advice or assistance do not hesitate to call Dianne Green or Tony Kay on 0114 276 7074.