The Construction Act is changing

I am sure that I was not the only person for whom the announcement in the Queen’s speech that a “Construction Contracts Bill” would be published in draft during the forthcoming Parliamentary session came out of the blue.

I have been fairly close to this initiative since it was originally launched in the Budget speech back in 2004, when Sir Michael Latham was appointed to manage the consultation process. The objective then was to have a package of amendments to the Construction Act implemented and on the statute book by early 2006.

Among others, I represented TeCSA on the Construction Umbrella Bodies Adjudication Task Group under the chairmanship of Graham Watts. The meetings and the consultations came and went. By the end of 2007, most of us were tearing our hair out or had given up.

It seemed that the process was, despite all the hard work put in, by so many, sliding into oblivion under the combined weight of legislative red tape and a lack of real pan-industry consensus on anything other than the most obvious things.

So what package of changes can we now expect to find its way into the promised Construction Contracts Bill? Eagerly, as suggested in the email announcement from the Department for Business, Enterprise and Regulatory Reform, I surfed into the relevant government website and found the following illuminating clarification:

It seemed that the process was sliding into oblivion under the combined weight of legislative red tape and a lack of real pan-industry consensus

 

“Improving cash flow through construction supply chains, and where appropriate, encouraging parties to resolve disputes by adjudication rather than by legislation.”

That was as illuminating as it got!

So, not much more to say in terms of substance until we get the draft Bill and the yet further consultation document promised. Is this just another false dawn?

I don’t think so and that is because of the significance of “consensus” in the process. Since we are now looking at primary legislation, rather than the use of the Regulatory Reform Order procedure where consensus is essential, although cross-industry consensus for the measures would no doubt be helpful, the fact is that from a technical perspective it is no longer a prerequisite of getting these measures through.

No doubt therefore some pretty intense political lobbying will be going on behind closed doors to influence the composition of the final package. A couple of predictions: expect the adjudication proposals to provide for one uniform set of rules and procedures (none better than the TeCSA ones in my impartial view). And, whereas it looked as if changes on payment would never see the light of day, I think we will now be seeing fairly radical changes to the payment provisions being made.