Hopes high for adjudication review
Hopes are high that industry pressure for a change in the Construction Act will result in removal of the need for contracts to be ‘in writing’ before coming under the adjudication regime. BCSA is among the industry groups that has been pressing for this change.
BCSA Legal and Contractual Affairs Director Marion Rich said: ‘People may be wondering what is happening with the Construction Act review, whether it has been forgotten or just disappeared. In fact, it is still going on and at the time of NSC going to print, we are awaiting draft legislation which was promised earlier for “the turn of the year”, which we interpret as meaning any time up to the end of February.’
The review process has been a slow and long drawn out one, since first announced in the Chancellor’s budget in March 2004. A first consultation was held in 2005 and the results published in January 2006 by DTI. In this document, DTI let the industry know its thinking on possible changes to the legislation.
DTI at that stage had decided not to take forward proposals for a change to the requirement for a construction contract to be evidenced ‘in writing’ before it could come within the Act. ‘This was a problem caused by the Court of Appeal’s interpretation in RJT Consulting Engineers Ltd v DM Engineering (Northern Ireland) Ltd, that all the terms of the contract had to be in writing,’ says Mrs Rich. ‘Until then, it had been thought that the ‘writing’ just had to establish the existence of a contract.’
Since then, the industry has been awaiting further developments from DTI. Mrs Rich said:’There has been some indication about DTI’s thinking on adjudication and “writing” and a great swell of opinion from the industry seems to have persuaded DTI to change its views on this, but otherwise, DTI are playing their cards very close to their chest.’
Final proposals and draft legislation are expected by the end of February. This is to be followed by one final period of consultation with the industry before the draft legislation goes ahead. BCSA will alert members for opportunities to contribute to the next stage of consultation.