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Construction Act With legislative amendments having come into force on 1 October, Rob Home explains how current and new projects will be affected
The amendments to the Housing Grants, Construction and Regeneration Act 1996, as introduced by the Local Democracy, Economic Development and Construction Act 2009, came into effect on 1 October (the 2011 amendments). This amending legislation has been under consultation for so long that many believed that it would never be brought into effect even though it received royal assent in November 2009.
Despite the long periods of discussion, the amendment to the Construction Act 1996 and the attendant scheme for construction contracts was not finalised until the summer.
Although the 2011 amendments have been under discussion for a while, the consequences have not been fully resolved. As expected, the amendments do not have retrospective effect, which could have been disastrous for long-term projects where risk profiles could have substantially changed, and generally favour those lower down the contractual ladder.
The amendments, similarly to the original 1996 Act, are forward looking. Although, on the surface, that simplifies matters, as with the 1996 Act, a short-term disjoint arises on larger projects where the procurement period spans 1 October. This issue should be addressed in framework and term contracts that span that date.
What causes problems in the 2011 amendments? The changes affect the two central areas of the 1996 Act: dispute resolution through adjudication and payment.
Changes to adjudication
The changes to the adjudication process include some tinkering with what a construction contract must contain (for example, a provision allowing an adjudicator to correct typographical errors) and what it may not (provisions...