REUTERS | Andrew Winning

Construction Act 1996 amendments six months on

I realised the other day that it was a little over six months since the amendments to the Construction Act 1996 came into force. I don’t know about you, but it only feels like five minutes since we were reading about the amendments and how they were going to impact on construction contracts and those involved in the industry, not only on how the Act was changing, but also in terms of the impact on payment and the number of otherwise excluded parties who would now be able to use adjudication to resolve their disputes.

But has life really changed and, from my perspective, has life changed for adjudicators?

Life has changed

I think the answer is probably yes to both questions. I’m sure all those involved in the construction industry have spent considerable time and money on getting to grips with the new payment rules. It will be interesting to see how the new provisions really work in practice.

We didn’t see many cases addressing the meaning of the payment provisions the first time around, and only time will tell if we see more this time. I certainly think there is ambiguity in some of the drafting, and where there is ambiguity, there is always scope for the parties to argue for a particular (but different) interpretation. I anticipate seeing this in adjudications before too long.

Where there is greater change is the end to the “in writing” rule in section 107. I think this is already making a difference. I know adjudicators (including me) are already dealing with contracts that are not in writing or “evidenced in writing”. In some ways the arguments are not dissimilar to before. Now the parties may agree there is a contract, but can’t agree on its terms. Before they may have just denied the existence of a contract in writing or evidenced in writing. At least from an adjudicator’s perspective, the issue is a substantive rather than a jurisdictional one (in the adjudication at least). This adds a different dimension to the adjudication, if only because the adjudicator and the parties are not distracted by the jurisdictional challenge and can focus on the real issues in dispute.

Slipping up on slips

Apart from these issues, I think the one area where people may be caught out is the change to the length of time an adjudicator can correct a slip. If the adjudication proceeds on the Scheme for Construction Contracts 1998 (as amended), then the adjudicator only has five days to make a change. Where there is late identification of slips, I can envisage this may act against parties (especially if the weekend follows shortly after service of the adjudicator’s decision). It is something everyone needs to be alert to, especially as not all the adjudication rules are the same.

Time to bake a cake?

I’m not sure if this all makes it a happy half year birthday or not.

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