Construction Legislation Changes: A Glimpse Into The Future

Author:Mr Alan Bissett, Ross Davidson and Adrian Kerr
Profession:Arthur Cox

The Society of Construction Law Annual Conference took place in Leeds on 2 March. The conference title was "The new Construction Act - 6 months on". The purpose of the day was to examine the practical effect in England and Wales of the recently implemented amendments to the Housing Grants, Construction and Regeneration Act 1996. These "Construction Act" amendments came into force on 1 October 2011. In Northern Ireland the same changes will come into force shortly (elements of the Northern Ireland amendments are still subject to consultation). I thought it would be interesting to attend in Leeds to form a view as to what we might have in store for us. The answer, it seems, is a degree of uncertainty and confusion; and ultimately litigation.

The forthcoming amendments to the Construction Contracts (Northern Ireland) Order 1997 have been spoken of in detail by many in the past. I do not intend to rehearse those details here, but by way of refresher the main changes include the following:

The Order will apply to oral contracts as well as written contracts; There is a new "pay less" payment mechanism which replaces the old withholding notice regime; The "slip rule", i.e. the common law right for adjudicators to correct typographical/ manifest errors in their decisions, will be codified; and There is an amended provision on how parties can make agreements as to the costs of adjudication. So how have our neighbours in England and Wales dealt with these changes and what can we learn from their experiences?

Which regime applies to the contract?

As mentioned above, the amendments to the Construction Act came into force in England and Wales on 1 October 2011. Any contract entered into before 1 October 2011 is subject to the old regime. Contracts entered into on or after 1 October 2011 are subject to the new regime. The position will be similar in due course in Northern Ireland. This seems straightforward. However, the challenges we will face will include deciding which regime applies to situations involving letters of intent, contracts with retrospective effect, changing the parties to a contract, changing the terms of contracts, assignment of contracts and framework agreements. These challenges are being faced currently in England and Wales and much reliance is being placed on the case law which was generated when the old regime first came into force. Although legal advice should be sought if there is any doubt, the case law suggests that the...

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