Financial constraints, health and safety advancements, the movement of people and a skills shortage are but a few of the headlines which have had significant impact on what is constructed, where and by whom. Who knows what effect Brexit will have on the industry as a whole, but that is a matter for another day. Birthdays and Brexit discussions do not mix.
Since its original inception the Act has faced some changes on the way, some more radical than others:
In 2003 one of the operations included in the definition of construction operations was changed from "telecommunications apparatus" to "electronic communications apparatus." What constitutes an insolvency event for the purposes of section 113 was tidied up in 2002. However, most of the changes happened in 2011 with the coming into force of the Local Democracy, Economic Development and Construction Act 2009.
- The Secretary of State's ability to exclude types of construction contract other than contracts with residential occupiers under clause 106 was repealed being replaced with section 106A a separate power to account for the various devolved administrations.
- Previously, the Act only applied to agreements in writing giving rise, as one might expect, to a great deal of wrangling over what an agreement in writing is. The relevant section was repealed and the Act applies, just as well to written and unwritten contracts (although the latter is of course sometimes more challenging to give effect to).
- Adjudication provisions however need to be in writing failing which the relevant Scheme for Construction Contracts apply. At the same time a slip rule was introduced permitting an adjudicator to remove a clerical or typographical error arising by accident or omission.
- So called "tolent" clauses were rendered ineffective
- The payment provisions in the Act were amended with a restriction on what is and is not an adequate payment mechanism. Payment Notices were introduced with a notice of intention to withhold payment rebranded a pay less notice. In the absence of a notice of intention to pay less, the notified sum is due and payable.
Anecdotally the appropriate gift for an 11th anniversary is steel, but surely a change, to take account of industry recommendations and the raft of case law arising from the Construction Act was just as welcome.
What next for construction, and in particular the Construction Act?
We have blogged about Peter Aldous' proposed Bill to make provision about the protection of retention deposits. This is seen as the last piece in the jigsaw of implementation of the recommendations of Sir Michael Latham in his report. It also came at a very important time for the construction industry supply chain, shortly before the demise of Carillion. In his speech to the house Mr Aldous recognised the risk of insolvency saying "If one of the larger construction companies were to fail, the consequences for SMEs and their supply chains could be disastrous." According to his speech £8billion cash retentions remained unpaid over the prior 3 years. I don't think its takes much to acknowledge the burden that that must place on small businesses in the supply chain, and a brief observation of the impact on the supply chain following recent insolvencies of significant players tells its own tale.
Sir Aldous' identified a proposed solution, along the lines of the statutory tenancy deposit schemes, in effect ring fencing retention monies to allow release at the appropriate time, without the need for enforcement.
The Bill is due its second reading on 15 June 2018. A link to monitor progress is as follows here.
We have been here before so we watch with interest whether this commendable, and long over due, proposed amendment to the Construction Act is actually effective. If so, then this could be just what the industry, or in the words of Sir Latham the team, needs.
Happy Birthday HGCRA. As an industry changes its legislation needs to too. In 20 years time will a pay less notice be called something else? I'm not one for crystal ball gazing but constructing the team, partnering, dispute avoidance, fair payment practices and all of the other aims and provisions of the Act are just as important now as they were at its inception. I'm sure those interests and goals will be relevant for years to come.
Should you have any construction related queries our team would be more than happy to assist. Please contact Jonathan Seddon, Lisa Dromgoole, Mimi Stewart or Alyson Cowan in the first instance.
Now that the team is constructed, what about constructing that cake….