The DTI unveiled its proposals to revamp the Construction Act on Wednesday, but there are already questions over whether it will ever be made law.
This is because the changes will be introduced as primary legislation rather than a legislative reform order, which will require it to go through parliament as a bill, rather than being amended by ministers. This will delay the introduction of the changes until at least the middle of next year and could, according to some heads of industry, lead to some proposals being watered down or lost.
Graham Watts, chief executive of the Construction Industry Council, said: “There’s only scope for so much legislation in one parliament and this won’t be high up the pecking order. I’d be very surprised if it was.”
The most significant change is the extension of adjudication legislation to cover contracts that are not in writing. Previously, firms could argue that the act did not apply if there was no agreement on paper.
If the changes become law, it is almost certain that there will be fewer legal challenges to adjudicators’ decisions.
If it is made law, the DTI’s proposals will:
There’s only scope for so much legislation and it’s not going to be high up on the pecking order
Graham Watts, chief executive of the CIC
- Define payment and withholding notices to prevent unnecessary duplication
- Clarify 110 notices, which will mean payees know when and how much they are to be paid
- Ensure the payment framework creates a clear interim entitlement to payment
- Prohibit pay-when-certified clauses.
The changes have received a mixed response. The Specialist Engineering Contractors Group, whose members are most likely to benefit from changes to payment practice, welcomed the consultation.
However, Stephen Ratcliffe, chief executive of the Construction Confederation, said: “The DTI’s payment proposals are likely to increase red tape. Legislating for the minority to the detriment of the rest of the industry is inappropriate and unfair.”
For Bingham’s campaign against the contracts in writing rule, go to www.building.co.uk/archive