The bill was amended at report stage in the House of Lords following Lord Hacking’s representations on behalf of the CIC.
The bill enables third parties to a contract to enforce its provisions under certain circumstances. In the case of construction contracts, a third party might be a subcontractor or the owner of a builder that is affected by the main contract but not a party to it directly.
Consultants were concerned that they could increase the risk of their being held liable for faults that had nothing to do with them. The amendments secured by the CIC means that third parties may enforce a contract only if that contract expressly says they can; or if the contract “purports to confer a benefit”, such as payment, on them.
The council is to prepare guidance notes for the industry on the implementation of the act. CIC chairman Graham Watts said: “This is an excellent example of listening government and it’s a pity that it is an exception rather than the norm.”
