REUTERS | Herwig Prammer

June 2010 digest: emergency budget, multi-jurisdictional guide and the Scheme

Freddie Mercury from Queen:

“And we have no such thing as a budget anymore. Our manager freaks when we show him the bill. We’re lavish to the bone.”

This month saw the government deliver its emergency budget. If only the country’s economics were as straightforward as being a rock star once was.

As was widely predicted, few of the budget’s announcements were aimed specifically at the construction industry. However, the indirect consequences of many may be substantial. For example, the axe has not yet fallen on most of the government’s capital spending plans (like BSF), but that may change with the October 2010 spending review. Equally, changes to VAT may restrict the amount of privately funded work (and if you are thinking of having work done to you house before VAT rises, this note will help you to choose the right building contract).

Elsewhere, the courts were busy considering unilateral mistake in a building sub-contract; advance payment bondsconditions precedent in a building contract; time of the essence in a payment provision; the test for equitable set-off; the meaning of construction contract; adjudication as a pre-condition to arbitration under the NEC2 contract; and adjudication in Scotland.

June also saw the end of two major pieces of high court litigation, with the parties in the BSkyB and Wembley litigations settling out-of-court.

On the international front, the new edition of the Construction and Projects multi-jurisdictional guide has been published, answering key questions on construction and projects law from the perspective of practitioners in 18 jurisdictions, including dispute resolution in construction contracts.

Finally, the consultation on the Scheme for Construction Contracts 1998 closed this month. No announcement has been made on when to expect the next round of the legislative process, so we still do not know when the changes to the Construction Act 1996 (as set out in the LDEDC Act 2009) will take effect.

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