NI Construction Act Changes

An article by a construction sector specialist has revealed that the UK's Construction Act will receive a face-lift this October.

According to Rupert Choat, the Head of Construction Disputes at CMS Cameron McKenna, changes to the Construction Act will come into force in England and Wales in October.

In Scotland, they will follow on 1 November, but it is unclear when changes to Northern Ireland's regime will occur.

All construction contracts concluded after the changes come into force will be affected.

Mr Choat questions whether the changes will help or hinder the already floundering sector?

The current Act was an attempt to address some of the fundamental problems facing the construction industry, particularly non-payment; subsequently the biggest changes to the act are in the terms of payment.


According to the article, the old trick of 'pay when certified' will be no longer allowed under the new act.

"Indeed the payment structure in the construction contract can now not come under another contract," writes Mr Choat.

Meanwhile Mr Choat explained the payee must make payment by the final date on the 'notified sum'. They can pay less but only if they provide a pay less notification notice by the appropriate date.

It is understood that the Act's changes were supposed to reduce the administrative burden imposed by the notice regime.

Mr Choat said: "There is however little evidence that the original Act's aim of improving cash flow was met. The changes are unlikely to help or justify the cost to the construction industry of overhauling all of its standard forms and associated payment practices, at an already difficult time."

CMS McKenna is legal firm who deals with eight industry sector groups; consumer products, energy, hotels & leisure, infrastructure & project finance, insurance and funds, lifesciences, real estate & construction and technology, media & telecoms.

(LB/CD)