REUTERS | Luke MacGregor

It’s go, go, go as the LDEDC Bill gets the green light

Or is it??

In reality, it may be more of a crawl, since the draft Scheme hasn’t even been published yet and the Government is talking about an 18 month consultation period on that. In that time, at the very least, we will have a change of government and, most likely, a different party at the helm. But without changes to the secondary legislation, there can be no ‘out with the old and in with the new’.

In case you haven’t realised what I’m talking about, I’m referring to the amendments to the Construction Act 1996. Last night, the House of Lords approved the slight changes made to the Bill last month by the House of Commons. That means, once the Bill gets Royal Assent (which I have heard may happen this month), at some point in the future, the following changes will affect our industry:

  • No more “in writing” requirements for construction contracts. (Incidentally, I put this on my new year wish list.) While I will be able to deal with a considerable number of extra disputes from parties who are, at present, precluded from adjudicating their dispute because they didn’t get as far as sorting out the paperwork, I also foresee this generating significant submissions on what the terms of the contract are, especially on payment issues.
  • No more agreements on who pays the costs of the adjudication made prior to the start of the adjudication (but I’ll still be able to decide which party should pay my fees, if they include that right in their contract).
  • A whole new payment regime to get to grips with, with new payment notices and an end to withholding notices (as we know them now, at least). This means that everyone involved with construction contracts will have to understand and apply a whole new set of clauses in the standard forms (once those are drafted).
  • Changes to the right to suspend if payment is outstanding.

All of this (and the other amendments I haven’t mentioned), will significantly affect everyone involved in the construction industry, at whatever level. The legislation is intended to make improvements. I hope that those improvements will be worth the costs that will be involved in bringing these changes to fruition.

One thought on “It’s go, go, go as the LDEDC Bill gets the green light

  1. Not everyone is happy with the proposed amendments to the Construction Act 1996, particularly its new payment regime, and we have reported extensively over the last 12 months about amendments that have been proposed, rejected, re-proposed and rejected again.

    It has been reported today that a new lobby group has been formed, the Contractors Legal Group, by the National Federation of Builders, the Civil Engineering Contractors Association, the Scottish Building Federation and the UK Contractors Group. Its aim is to lobby Parliament about the payment provisions.

    Since the LDEDC Bill 2008 (which will amend the Construction Act 1996) recieved Royal Assent yesterday, we anticipated that that lobbying will be aimed at influencing the content of the draft amendments to the Scheme for Construction Contracts 1998, which have not been published yet.

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