June-July 2011 Legal update


CONSTRUCTION ACT CHANGES – IMMINENT!


Does this affect me? This affects everyone.


What is happening? The Housing Grants, Construction and Regeneration Act 1996 (the “Construction Act”) has been amended by Part 8 of the Local Democracy, Economic Development and Construction Act 2009. When? October 2011. What does this mean? Everyone will need to review their t&cs, change processes and train staff on the new procedures. (JCT, NEC and other bodies will be issuing new standard forms).


What are the main changes?


A new payment regime with new notice requirements. Withholding notices will be replaced with “pay less notices”. If the Payer fails to issue a “payment notice”, the party seeking payment (“Payee”) can issue its own notice and applications for payment will count. Warning: if you fail to issue a “pay less notice” the Payer will have to pay the amount requested.


Construction contracts no longer have to be in writing for adjudication to apply. Contracts which are informal and wholly or partly oral or partly written can be referred. Expect more adjudication disputes and emphasis on employees’ witnesses.


Pay-when-certified clauses that link payment to other contracts will not be enforceable. A sub-contractor’s entitlement to payment will not be able to be linked to or become due when the main contractor’s application for payment has been certified by the employer. This will include release of retention.


Parties will have a greater entitlement to suspend performance if they have not been paid. A party will be able to suspend part or all of its obligations (as well as being entitled to recover its time and reasonable costs and expenses for having to suspend performance of the works). This is a powerful tool.


Where can you get more information? Anna-Liisa Walden, Senior Associate, Tel: 0845 2091354 (Annalisa.walden@clarkewillmott.com)


Or sign up for one of our training sessions! (See below) HOW TO WIN AN ADJUDICATION


Actions before you sign the contract: Read the dispute resolution clause - too many people do not. Is there an Adjudicator already nominated? If he has been nominated by the other party, is he truly independent and impartial? Are there any clever tricks with the costs of the adjudication? Now is the time to get rid of them.


When the dispute is brewing: Ensure you get your paperwork in order. Print off all relevant and helpful emails and get a witness statement from anyone who can help you convince the adjudicator. There is no great magic about this; just the person’s name, qualifications, role on the project, what they say happened and a Statement of Truth (Google this for the exact words).


When the adjudication starts: If you are the claimant, the key is not to rush. Make sure the two crucial documents (the Notice of Adjudication and the Referral) are completely ready otherwise you may end up “ambushing” yourself. The Referral needs to be all the relevant evidence as a narrative, cross-referenced to documents that help prove your case.


As responding party: the key is not to panic! The Adjudicator will probably offer you a week to respond – ask for more time, you will often get it. Raise legal jurisdictional challenges to ‘muddy the waters’ (if there are any). Try and be the one to get the “last word” in – who knows it may be the one that convinces the Adjudicator – good luck! Stephen Clarke.


Adjudication – We make it as painless as possible to recover your money


Are you owed money on a construction project? Have you been put off by the likely legal costs?


Limit your legal cost with our FIXED PRICE ADJUDICATION REVIEW.


An experienced construction lawyer from Clarke Willmott will check for any jurisdictional or other legal issues which may affect the claim recovery. You will then receive a report with the prospects for success and advice for the best way to proceed. This report will cost £900 plus VAT only.


In the event that you decide to proceed then we will provide you with:


• •


A fixed price for the adjudication and


Depending on the merits; discuss a reduced fee with a ‘success fee’.


Interested? Contact: Stephen Clarke, Partner & National Head of Construction on 0845 209 1303 or Stephen.Clarke@clarkewillmott.com


“New” Construction Act Sessions


Course Leader – Robin Gupta – Chartered Engineer and Solicitor


Contents: oral contracts; payment requirements; payment notices by Payer; payment notices by Payee; Pay less notices; pay when certified; suspension of performance.


The new Scheme for Construction Contracts; JCT 2011 and NEC3 revisions.


14 September, 6 & 20 October at Clarke Willmott LLP (Bristol, Taunton & Exeter).


Book your place at £200 + VAT (or 3 for the price of 2).


Email Robin at robin.gupta@clarkewillmott.com or call 0845 209 1302


WHAT ARE FEED-IN TARIFFS? FITs are a per KiloWatt/hour payment for listed renewable electricity installations guaranteed for 20 or 25 years to encourage wind, solar and biogas projects.


What is the Renewable Heat Incentive? The RHI has similar principles as FITs for different technologies.


FIT Review 2011 – The Government recently fast tracked a review of FITs and arrested large scale solar development and new rates are effective from August 2011. Instead, the Government is encouraging small scale renewable projects.


RHI Implementation – Businesses should be able to apply for RHI from July 2011. Domestic heat installations will wait until Autumn 2012.


How we can help you? – Subsidies can be complex and additionally proposed projects may benefit from the Renewables Obligation Scheme if large enough. Our renewable energy specialists can assist with all energy issues including development, construction and banking legal advice to make your renewable energy projects a success.


Priscilla Hall, Head of Renewable Energy, T: 0845 209 1435 E: Priscilla.Hall@clarkewillmott.com


South West Building & Construction 5


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