The new ‘Construction Act’ came into force on October 1st, 2011 and is likely to have significant implications for contractors, employers and property professionals alike.
Previously the provisions of the Housing Grants Act only applied to contracts in writing, but this has been replaced by the new Act which applies to contracts that are wholly/partly in writing or wholly oral. How is an Adjudicator going to consider evidence about a wholly oral contract (within the 42 day deadline?). We believe the extension to oral contracts is inappropriate and unworkable in relation to what was intended to be a speedy summary procedure.
Under the new Act It is now unlawful to include terms within the contract that fetter the discretion of the Adjudicator to award his own costs. Such terms will now only be effective if, at the very least, they allow the adjudicator power to apportion his fees and expenses between the parties.
The Act also introduces new rules about payment notices which have particular benefits for contractors at the expense of employers. If the contractual procedure for the certification of payments breaks down, the contractor will now have a statutory entitlement to issue his own notice specifying the amount he believes he is entitled to be paid. If there is no withholding notice from the employer the amount specified by the contractor becomes due for payment. This provides an added protection for contractors which does not exist in the current scheme.
For examples of construction claims our construction litigation solicitors have acted on, see our Construction Dispute Resolution page.
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