Time for a makeover?

1 May 2008 was the 10 year or tin, if you prefer, anniversary for the starting date for the Housing Grants Construction and Regeneration Act 1996. What a mouthful. I still cant get my head around the title and prefer to call it the Construction Act along with the thousands of us who work in this wonderful industry.
 
 

1 May 2008 was the 10 year or tin, if you prefer, anniversary for the starting date for the Housing Grants Construction and Regeneration Act 1996.  What a mouthful.  I still can’t get my head around the title and prefer to call it the Construction Act along with the thousands of us who work in this wonderful industry.

 
We all know how the Construction Act has revolutionised our industry but did you know that the Construction Act is about to have a pre-med followed by surgery to make its body more appealing to the masses?  So what can we expect to see from the improved Act?
 
The first review of the Construction Act was announced in the March 2004 Budget by our current Prime Minister.  Following the announcement, consultation paper proposals appeared in March 2005.  Further proposals were issued in January 2006 and a second consultation paper was issued in June 2007 giving interested parties until September 2007 to comment.  A lot of clever people have expended thousands of brain hours in the process.
 
One can only speculate on what changes are going to be made but here is my best guess on the major changes we can expect to see in the new shiny version of the Construction Act when it appears from the recovery room. 
 

Contracts in writing

 
The dreaded section 107 of the Act is likely to be pruned heavily to defeat the “no contract in writing” arguments that I see in many of the adjudications on which I am appointed. There is even a possibility that the scope of the Act will be extended to encompass oral contracts. 
 

Final and conclusive certificates

 
Contract provisions which prevent a party from challenging the value of an interim or final certificate are likely to be outlawed.
 

Bridgeway Tolent provisions 

 
Contract provisions which oblige a Referring Party to pay all costs, including the Adjudicator’s fees and expenses and legal costs of the Responding Party regardless of the Adjudicator’s decision, are likely to be banned.
 

Pay when certified

 
Although “pay when paid” provisions are currently void, it is highly likely that the relevant provisions in the Act will be extended to encompass the “paid when certified” provisions which have crept into sub-contracts to link payments to sub-contractors to main contract payment certificates. 
 
A tightening up of the Construction Act has to be a good thing and we await a first sight of the new model with excitement but a certain degree of trepidation. 
 
Peter Vinden is a practising adjudicator, mediator, expert and conciliator. He is Managing Director of Vinden and can be contacted by email at pvinden@vinden.co.uk