The New Construction Act - A Guide to the Changes
Transcript of The New Construction Act - A Guide to the Changes
-
8/3/2019 The New Construction Act - A Guide to the Changes
1/24
2011
2011
The New Construction Act
LOCAL DEMOCRACY, ECONOMIC DEVELOPMENT
AND CONSTRUCTION ACT 2009
THE NEW CONSTRUCTION ACT
A GUIDE TO THE CHANGES
FC Construction
-
8/3/2019 The New Construction Act - A Guide to the Changes
2/24
2011
2011
The New Construction Act
Today:
Reviewthechanges Consider what they mean for Mansell
anditsbusiness
AmyMorleyPartner
FreethCartwrightLLP
-
8/3/2019 The New Construction Act - A Guide to the Changes
3/24
2011
2011
The New Construction Act
Somecontext... Housing Grants, Construction and
Regeneration1996(theOldAct). Amended by Local Democracy, Economic
Developmentand
Construction
Act
2009
(the
NewAct).
NewSchemeforConstructionContracts. No opting out for qualifying constructioncontracts.
-
8/3/2019 The New Construction Act - A Guide to the Changes
4/24
20112011
The New Construction Act
When:
Appliestoallcontractsenteredintoaftertheeffectivedate. 01October2011(EnglandandWales) 01November2011(Scotland)
Contracts that are entered into before theeffectivedatewillcontinuetooperateundertheOldAct.
-
8/3/2019 The New Construction Act - A Guide to the Changes
5/24
20112011
The New Construction Act
Summaryofchanges: Adjudication:
Oralcontracts; Costs;
SlipRule. PaymentNotices:
Section 111 Withholding Notices arereplaced;
PaywhenCertifiedunenforceable; NewPaymentNoticeregime; Introduction of Notified Sum for
payment.
-
8/3/2019 The New Construction Act - A Guide to the Changes
6/24
20112011
The New Construction Act
Section110APaymentNotice Payment Notice required in respect of any
payment.
Contract must nominate who will serve theNotice:
Payer;
SpecifiedPerson; Payee.
Noticemustbeservedwithin5daysoftheduedate.
-
8/3/2019 The New Construction Act - A Guide to the Changes
7/24
20112011
The New Construction Act
Section110APaymentNotice Mustsetoutthesumdue. Must set out the basis on which it is
calculated.
Whatdoes
calculated
mean.
Notice required even if the amount is0.
The amount identified in the NoticebecomestheNotifiedSum tobepaid.
-
8/3/2019 The New Construction Act - A Guide to the Changes
8/24
20112011
The New Construction Act
NopaymentNoticeserved? The New Act provides for a party receiving
paymenttoserveaDefault Notice. WhataretherequirementsofaPayeeNotice
indefault? Mustidentifythesumdue. Setoutthebasisonwhichitiscalculated. Incentivetoserveearlyduetopostponement
ofthefinaldateforpayment.
-
8/3/2019 The New Construction Act - A Guide to the Changes
9/24
20112011
The New Construction Act
PayeeNoticeindefault Ifthepayeeisrequiredtoserveanapplication
thenaseparatePayeeNoticeindefaultisnotrequired.
Silentbutdeadly... The amount identified as due in the
application becomes the Notified Sum forpayment.
Unless:
APayLessNoticeisserved
-
8/3/2019 The New Construction Act - A Guide to the Changes
10/24
20112011
The New Construction Act
PayLessNotice NotifiedSummustbepaidcomewhatmay. UnlessaPayLessNoticeserved. Noticemustsetoutthesumdueandthebasis
onwhich
it
is
calculated.
Thisbecomesthenotifiedsumtobepaid. AbatementandSetoffbothcovered. ItisnotaWithholdingNotice. Nogroundsforwithholdingtobeprovided?
-
8/3/2019 The New Construction Act - A Guide to the Changes
11/24
20112011
The New Construction Act
-
8/3/2019 The New Construction Act - A Guide to the Changes
12/24
20112011
The New Construction Act
-
8/3/2019 The New Construction Act - A Guide to the Changes
13/24
20112011
The New Construction Act
-
8/3/2019 The New Construction Act - A Guide to the Changes
14/24
20112011
The New Construction Act
Suspension[Section112] Anyorallcontractualobligations Reasonable cost and expenses incurred as a
consequence
ExtensionofTimetocoverremobilisation
-
8/3/2019 The New Construction Act - A Guide to the Changes
15/24
20112011
The New Construction Act
Paywhencertified No longer possible to link performance and
the issue of certificates on one contract topaymentunderanother.
RetentionandSubcontractors.
-
8/3/2019 The New Construction Act - A Guide to the Changes
16/24
20112011
The New Construction Act
Insolvency
Theoneexceptiontopaywhenpaid The right to withhold payment only if the
contractexpresslystatesthisright.
Still required to comply with Noticeprovisions. So must serve a Pay Less Notice if the
insolvency is after the Due Date but beforethelastdaytoserveaPayLessNotice.
-
8/3/2019 The New Construction Act - A Guide to the Changes
17/24
20112011
The New Construction Act
Adjudication
Contractsnolongerinwriting. Section107oftheOldActnolongerapplies. All the case law on what was and wasnt a
contract evidenced in writing no longerapplies.
Moreadjudication? Increased challenges and uncertainty in
dealing with oral/part oral contracts inadjudication.
-
8/3/2019 The New Construction Act - A Guide to the Changes
18/24
20112011
The New Construction Act
Adjudication
The Agreement to refer disputes toadjudicationmustbeinwriting.
IfnotthentheSchemewillapply.
Adjudication Agreement must include a sliprule. IfnoslipruleisincludedthentheSchemewill
apply.
-
8/3/2019 The New Construction Act - A Guide to the Changes
19/24
20112011
The New Construction Act
AdjudicationCosts TheOldActsilentoncosts.
NewAct
says
the
Adjudicator
must
be
able
to
decidewhowillpayhisfees.
Only exception is if an agreement is made inwritingafter thegivingofaNoticeofIntentiontoRefertoAdjudication.
Parties still able to allocate who should paypartycosts e.g.consultantorlawyertime.
So called Tolent clauses only enforceable ifthey refer generically to Referring Party orRespondingParty.
-
8/3/2019 The New Construction Act - A Guide to the Changes
20/24
20112011
The New Construction Act
NoticeProvisionsandcalculatingtimeperiods
Expresscontractual
provisions
on
service:
How?
Where?When?
Expect any tribunal will uphold expressprovisionsinthecontract.
Ifthecontractissilent:TheOldActapplies
-
8/3/2019 The New Construction Act - A Guide to the Changes
21/24
20112011
The New Construction Act
Reminder of the Old Act provisions onService
Method:
Byanyeffectivemeans
Timeruns
from
receipt
Considerhowyouevidencereceipt Recordeddeliveryandfax
Email Outofofficereplies Deliveryfailures
-
8/3/2019 The New Construction Act - A Guide to the Changes
22/24
20112011
The New Construction Act
Calculatingtimeperiods TheOldActprovisions:
When a period of days is specified thentime begins to run immediately after thepoint in action e.g. if Notice of Suspension is to begiven(7daysisrequired)theniftheNoticewasreceivedonMonday the 7 days starts on Tuesday and suspension cantakeplaceonthefollowingTuesday.
BanksHolidaysarenotcounted.
-
8/3/2019 The New Construction Act - A Guide to the Changes
23/24
20112011
The New Construction Act
Materialsavailable: TheNewConstructionAct FCGuidetotheChanges. LegalSurgerydayinyourBusinessUnit. Mansells Subcontract Conditions (amended to provided for
SubcontractorserviceofthePaymentNotice) Mansell NEC Subcontract amendments with update to provide
for the New Construction Act and Subcontractor service of thePaymentNotice.
JCT Design & Build Subcontract 2011 version with bespokeamendments to provide for Subcontractor service of thePaymentNotice.
JCT Standard Building Subcontract 2011 version with bespokeamendments
to
provide
for
Subcontractor
service
of
the
PaymentNotice.
Track changed copy of the Old and New legislation to identifythechangesmade.
-
8/3/2019 The New Construction Act - A Guide to the Changes
24/24
20112011
The New Construction Act
Thankyouforyourtime