REUTERS | Luke MacGregor

LDEDC Bill: insolvency amendments back on the table

Since the Local Democracy, Economic Development and Construction Bill 2008 (the Bill) was published last year, a number of amendments to its construction provisions have been proposed (see blog post). At the end of the committee stage in the House of Lords, the Government made it clear that it would not support any of the proposed amendments. In response, all of the amendments were withdrawn or not formally proposed (see blog post).

The Bill is now reaching the end of the report stage (the last day of reading is scheduled for 22 April). However, it seems that those who want changes to its construction provisions – most prominantly, the Specialist Engineering Contractor’s Group (SEC) – are not prepared to let matters lie. Once again, a number of amendments have been proposed by Lords Borrie and Tope and Baroness Hamwee. While some of the detail differs from earlier proposed amendments, identical proposals have been put forward in relation to upstream insolvency and the right for either party to request that the other party provides payment security at any time (in the form of a bank guarantee or bond).

The third reading of the Bill in the House of Lords is scheduled for 29 April 2009. This will be the final review of the contents of the Bill in the House of Lords. Amendments can be made at third reading, provided the issue has not already been voted on at an earlier stage. At the end of the debate, the House decides whether to approve the third reading of the Bill. If it is successful, the Bill will move on to its first reading in the House of Commons.

Given the level of opposition to these amendments so far, it is unlikely that they will form part of the Bill that moves to the House of Commons.

2 thoughts on “LDEDC Bill: insolvency amendments back on the table

  1. The LDEDC Bill has completed its report stage and, once again, the proposed amendments to the construction provisions in Part 8 have either been withdrawn or not moved.

    When withdrawing his amendments, Lord Borrie openly invited someone else to champion his amendments:

    “I hope that I might have some honourable friends elsewhere who will wish to pursue the matter further”.

    This suggests that we haven’t seen the last of the amendments relating to insolvency.

    Some may think that Lord Brett’s comments, on behalf of the Government, are more worrying. He indicated that the consultation period for these amendments is not yet over:

    “…there has been extensive consultation, and that will continue. There will have to be a lead-in time. We are looking at a period of 18 months to allow for extensive consultation to continue — a very broad consensus has emerged on the contents of this legislation — to ensure that everyone is satisfied with how the legislation will operate when it is introduced.”

    The LDEDC Bill now moves to its third reading in the House of Lords, which is scheduled for 29 April 2009, before passing to the House of Commons for its first reading.

  2. As reported in PLC Construction’s Legal update, the LDEDC Bill 2008 has completed its passage through the House of Lords and has moved to the House of Commons for its first reading.

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