Practical Law

…where should I start?

If you are a construction lawyer or a commercial manager who needs to understand how the changes to Part II of the Housing Grants, Construction and Regeneration Act 1996 (Construction Act 1996, also known as the HGCRA 1996) will affect construction contracts, this Ask the team gives you the basics, based on PLC Construction’s materials. In particular, we suggest a draft agenda that can be used for a training session.

While the needs of any public sector, in-house or private practice team will vary, this draft agenda should draw out some of the lessons to be learned as Part 8 the Local Democracy, Economic Development and Construction Act 2009 (LDEDC Act 2009) comes into force.

When do the changes take effect?

We anticipate you might remind attendees of this most basic of information in a covering email or meeting request:

• The changes to the Construction Act 1996 take effect on 1 October 2011 in England and Wales and 1 November in Scotland (the effective date).
• The changes to the Scheme for Construction Contracts (England and Wales) Regulations 1998 are set out in the Scheme for Construction Contracts (England and Wales) Amendment (England) Regulations 2011 (and the Scottish and Welsh equivalents). They also take effect on the effective date.

Other resources from PLC Construction

For a summary of our resources on the changes to the Construction Act 1996 and the Scheme for Construction Contracts 1998, see Getting ready for the Construction Act 1996 changes.

DRAFT AGENDA

Suggested pre-reading

You might ask attendees to have a look through these notes before the meeting. If they are able to read them online, they can click through on the various links to get more information, depending on how much time they have available and how much they need to know:

• On payment, Practice notes, Payment in construction contracts: Scheme for Construction Contracts 1998 and as amended and Payment in construction contracts: Construction Act 1996.
• On adjudication, Practice notes, Adjudication using the Scheme for Construction Contracts 1998 and as amended and LDEDC Act 2009: adjudication.

Hard copy mark-ups of Act and Scheme

You might ask attendees to print and bring along a copy of these mark-ups of the:

• Construction Act 1996.
• Scheme for Construction Contracts 1998.

Agenda for meeting

Overview

Consider using our slideshow to give an overview of the changes. You may download and adapt the slideshow to suit your needs.

Payment

• The differences and similarities between the old and new regimes on payment.

Perhaps use our flowcharts to work through the materials in a different way to the suggested reading. (Note that you can click straight through from our slideshow to a flowchart.)

• Discussion.

Perhaps select a couple of the FAQs that are most relevant to your team, for the basis of a discussion.

Adjudication

• Oral and partly oral contracts: avoiding or minimising the risk of adjudication of a dispute under an oral contract.

Consider what best practice to adopt (or to advise your clients to adopt) in connection with oral (or partly oral) contracts. The fact that oral (or partly oral) construction contracts may be adjudicated, if they are entered into after the effective date, is yet another good reason to keep good site records.

• Discussion.

Perhaps select a couple of the FAQs that are most relevant to your team, for the basis of a discussion.

Agreed actions

• Should you change site procedures or pro forma records?
• Do you use “subject to contract” on all appropriate pre-contract letters, minutes and forms?
• Do you need to change any standard letters of advice, or any client (or site manager) guides to adjudication?
• Can you update any purely non-contentious precedents? (See, for example, Standard clauses, Amendments to JCT Standard Building Contract to comply with Construction Act 1996 (as amended) and LDEDC Act 2009: payment, suspension and adjudication clause for professional appointment.)
• Should you order any amended standard form contracts?