The New Act
The Local Democracy, Economic Development and Construction Act 2009
The Construction Act 2009 came into force on the 1st October 2011, and will apply to all construction contracts on or after this date. This legislation has brought significant changes to the current regime in respect of payment and adjudication.
The introduction of this new legislation follows an extensive period of consultation by the Government on improving payment practices in the construction industry.
Below are the main changes that are likely to affect you, and the implications they may have:
The main change related to adjudication is that the scope of the Construction Act has been widened to include oral contracts. This gives parties to an oral contract the right to refer a dispute to adjudication. The advantage of this change is that it will remove jurisdictional challenges based on contracts not being in writing, or evidenced in writing.
However this change may create further disputes in proving that an oral contract exists, what terms were agreed by the parties and by whom.
Avoiding a situation where no contract is concluded will be imperative.