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Peter’s legal advice forum

BB&D welcomes our new resident lawyer, Peter Blake. Every issue, he will be offering the best legal advice to help you adhere to the latest legislation in building and developing.

Hello readers! As businesses involved in construction risk handicapping themselves commercially unless they get up-to-speed with the latest legislation, I have teamed up with BB&D to help advise on the latest legal issues. I look forward to working with the magazine for the next few issues, and if you have any questions, do feel free to send them to the editor Rebecca, and she will forward them on to me.

Development and Construction Act 2009 (‘the Act’) and the amended Scheme for Construction Contracts (‘the Scheme’), which came into force on 1 October this year. Both are aimed at easing cash flow throughout the supply chain via a new payment regime, and offer an amended, more widely applicable, adjudication procedure for resolving disputes. Therefore, failure to comply with either of these could prove costly in both time and money. This new legislation


represents the biggest shake-up in recent years for the sector and will not only affect employers and contractors, but also sub- contractors, consultants and others undertaking work in the supply chain. For anyone who provides or

procures construction services, but especially those involved with making or processing payment applications and whose daily work will be most directly affected, so it is vital that the Act is understood and complied with. Under the Act, compulsory

changes to the payment process,

his month, I am discussing the Local Democracy Economic

which are now necessary to fulfil the requirements of contracts, are likely to catch many people out. It is therefore imperative that staff are trained to ensure they avoid the pitfalls. Errors that may arise with

untrained personnel include: failure to appreciate the significance of issuing a payment notice; ignorance of the payee’s default notice provisions that trigger payment obligations even where no payment notice or certificate has been issued; serving an old-style withholding notice instead of a new pay less notice; failing to appreciate that a payee’s default notice will determine the amount due and will postpone the final date; failing to issue a pay less notice in time payment; failing to set- out the basis on which the sum stated to be due is calculated, and, losing the chance to influence the amount of payments by not serving a payment notice or pay less notice because the sum due is zero. Such errors could prove costly

and time-consuming and, without training, are more likely to occur. Also, resolving any disputes that subsequently arise will take time and, more importantly, cost money. In some cases, the cost is likely to be greater due to changes in the adjudication process, which have now been incorporated into the new Act as well as the Scheme. These changes are aimed at making the process more accessible and effective; the main change being that adjudication can now be made on contracts which are oral or partly oral, as well as on written contracts. If there is no written adjudication provision or the contract does not comply with the new law, the Scheme will

Compliance to the Act is key if the construction supply chain is to be successful and without legal complications

“This new legislation represents the biggest shake-up in recent years for the sector and will not only affect employers and contractors, but also sub-contractors, consultants and others undertaking work in the supply chain”

apply automatically. No matter how informal the contract, the new payment provisions will apply and should be observed.

See you next month! 

Peter Blake is head of construction and a Partner at law firm Prettys. As a lawyer with over 20 years’ experience of construction law, Peter regularly advises clients on a range of contractual and other legal issues. As well as being instrumental in Prettys’ operation of the National Federation of Builders’ helpline, Peter regularly presents to the construction industry on legal topics. | British Builder & Developer | 23

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