A brief review of the journey to the amendment of the Construction Act

'Everybody has won and we all must have prizes...'

In December 2011 we were completing the update of our industry leading NBS Contract Administrator to ensure that our subscribers had all the contract administration forms required to administer the 2011 edition of contracts that had just been issued. The year 2011 had been a hectic year for the industry in terms of dealing with the new Act, from tracked copies of proposed changes to popular contract forms, to amendment sheets for some other contracts, to the issuance of new editions of contracts and an avalanche of training, the industry was fully occupied with understanding the changes that had come into effect on October 1 2011 in England and Wales and November 1 2011 in Scotland.

It is perhaps important to remember, that away from the flurry of activities about the Act in 2011, these were not wholesale reforms and they were intended to be light touch and proportionate amendments to address specific issues. The amendments targeted the payment and adjudication procedures in the Construction Act.

The journey to the amendments had begun in March 2004, when the Chancellor announced a review of the Construction Act in the Budget:

'Following concerns raised by the construction industry about unreasonable delays in payment, the government will review the adjudication and payment provisions of the Housing Grants, Construction and Regeneration Act in order to identify what improvement can be made'

The initial review was undertaken by Sir Michael Latham in 2004, after that initial review, various industry consultation meetings and stakeholders' events were held, a sounding board comprising of some of the leading names in the industry was also constituted to assist the government department and the result of the consultations were published widely. In effect, the changes that came into force in 2011 had been widely discussed and analysed.

While these were light touch changes, they are expected to improve payment and adjudication significantly. The government has suggested that it should be able to assess the achievements of the desired effects/benefits of the amendments in approximately three years, on our part, we will track the adoption and use of the new Act each year to inform the industry and provide empirical basis for future reviews.

So one year later, where are we? Are payment notices clearer and better? Is adjudication even more effective? Have we all been winners and do we all deserve prizes?

It's time to share the information we gathered from our survey on the Understanding and Use of the Amendments to the Construction Act. Also, now that all of the contract publishing institutions have amended the various standard forms of construction contracts to comply with the new Act, Roland Finch of the C&L team gives an overview of payments under the new Act identifying important watch points. Adjudication was the other area that was amended and the introduction of oral and partly written contracts was probably the most significant change to the Act, Koko Udom takes a look at the journey leading to the admission of oral and partly written contracts and offers practical advice as the industry settles into the new era. We end our Newsletter by taking a look at what 2013 might offer in relation to the new Act and point you in the direction of some resources you should find useful.