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CLG urges Act change - CLG urges Act change
00:00 18 Aug 1999
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by Kathy Watson
The Constructors Liaison Group has urged the Government to consider wide-ranging changes to the Construction Act after uncovering major abuses by contractors.
The group which represents specialist contractors, wants wider-ranging powers given to adjudicators, and a guarantee of their impartiality after uncovering examples that they were being retained by contractors at the start of contracts.
It also wants the Government to end the requirement that interim payments should only apply for work lasting longer than 45 days, after its research showed avoidance was taking place.
On the payment side, it seeks greater clarification on the due date for payment and final date when payment should be made, urging a limit of 17 days. And it requests a ban on contractual provisions which dilute the effect of the Construction Act.
In addition, CLG wants supply-only activities to be included under the Act, since off-site fabrication is a major thrust of the Government's drive to improve productivity under the Movement for Innovation.
Rudi Klein, CLG's legal adviser, said members were generally happy with the Act. "Things were far worse without it, they say, but we need to make the Act better."
When the Act came into force on 1 May 1998 as the Housing Grants, Construction and Regeneration Act 1996, construction minister Nick Raynsford promised a review after two years. He invited the industry to monitor and alert him to abuses.
As a result the CLG invited the University of Northumbria to conduct an independent survey on its behalf. The group also analysed over 50 standard and bespoke subcontracts issued since May 1998. It found a number of bespoke contracts contained clauses at variance with the Act, that most contracts made payments subject to activities higher up the contractual chain, such as pay-when-certified and only 26 per cent made reference to adjudication. Pay-when-paid clauses persist in 10 per cent of contracts.
The group found evidence of what it calls "widespread attempts to delay referral of disputes to adjudication" by using the engineer as the arbiter of whether a dispute exists. It says this contravenes section 108 of the Act, as adjudicators do not have the power to sort out whether there is a dispute.
It also complains that the contracts it has reviewed show the powers of the adjudicator are being weakened by delays in paying disputed monies to the successful party. Disputed monies are being put in a trustee stakeholder account until the dispute has been settled or resolved by adjudication or litigation. Or they are being deferred to a much later date.
As an example, the group says some bespoke subcontracts require payment to be deferred until after practical completion of the main contract which could be some years ahead for early trades such as piling and steelwork.
It also complains that some bespoke contracts insist that the referring party to adjudication is responsible for all the adjudicator's fees and costs, which could deter companies from using adjudication. The Department of Environment, Transport and the Regions is promising to respond to the CLG's report later this month. by Kathy Watson
The Constructors Liaison Group has urged the Government to consider wide-ranging changes to the Construction Act after uncovering major abuses by contractors.
The group which represents specialist contractors, wants wider-ranging powers given to adjudicators, and a guarantee of their impartiality after uncovering examples that they were being retained by contractors at the start of contracts.
It also wants the Government to end the requirement that interim payments should only apply for work lasting longer than 45 days, after its research showed avoidance was taking place.
On the payment side, it seeks greater clarification on the due date for payment and final date when payment should be made, urging a limit of 17 days. And it requests a ban on contractual provisions which dilute the effect of the Construction Act.
In addition, CLG wants supply-only activities to be included under the Act, since off-site fabrication is a major thrust of the Government's drive to improve productivity under the Movement for Innovation.
Rudi Klein, CLG's legal adviser, said members were generally happy with the Act. "Things were far worse without it, they say, but we need to make the Act better."
When the Act came into force on 1 May 1998 as the Housing Grants, Construction and Regeneration Act 1996, construction minister Nick Raynsford promised a review after two years. He invited the industry to monitor and alert him to abuses.
As a result the CLG invited the University of Northumbria to conduct an independent survey on its behalf. The group also analysed over 50 standard and bespoke subcontracts issued since May 1998. It found a number of bespoke contracts contained clauses at variance with the Act, that most contracts made payments subject to activities higher up the contractual chain, such as pay-when-certified and only 26 per cent made reference to adjudication. Pay-when-paid clauses persist in 10 per cent of contracts.
The group found evidence of what it calls "widespread attempts to delay referral of disputes to adjudication" by using the engineer as the arbiter of whether a dispute exists. It says this contravenes section 108 of the Act, as adjudicators do not have the power to sort out whether there is a dispute.
It also complains that the contracts it has reviewed show the powers of the adjudicator are being weakened by delays in paying disputed monies to the successful party. Disputed monies are being put in a trustee stakeholder account until the dispute has been settled or resolved by adjudication or litigation. Or they are being deferred to a much later date.
As an example, the group says some bespoke subcontracts require payment to be deferred until after practical completion of the main contract which could be some years ahead for early trades such as piling and steelwork.
It also complains that some bespoke contracts insist that the referring party to adjudication is responsible for all the adjudicator's fees and costs, which could deter companies from using adjudication. The Department of Environment, Transport and the Regions is promising to respond to the CLG's report later this month.
The Constructors Liaison Group has urged the Government to consider wide-ranging changes to the Construction Act after uncovering major abuses by contractors.
The group which represents specialist contractors, wants wider-ranging powers given to adjudicators, and a guarantee of their impartiality after uncovering examples that they were being retained by contractors at the start of contracts.
It also wants the Government to end the requirement that interim payments should only apply for work lasting longer than 45 days, after its research showed avoidance was taking place.
On the payment side, it seeks greater clarification on the due date for payment and final date when payment should be made, urging a limit of 17 days. And it requests a ban on contractual provisions which dilute the effect of the Construction Act.
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In addition, CLG wants supply-only activities to be included under the Act, since off-site fabrication is a major thrust of the Government's drive to improve productivity under the Movement for Innovation.
Rudi Klein, CLG's legal adviser, said members were generally happy with the Act. "Things were far worse without it, they say, but we need to make the Act better."
When the Act came into force on 1 May 1998 as the Housing Grants, Construction and Regeneration Act 1996, construction minister Nick Raynsford promised a review after two years. He invited the industry to monitor and alert him to abuses.
As a result the CLG invited the University of Northumbria to conduct an independent survey on its behalf. The group also analysed over 50 standard and bespoke subcontracts issued since May 1998. It found a number of bespoke contracts contained clauses at variance with the Act, that most contracts made payments subject to activities higher up the contractual chain, such as pay-when-certified and only 26 per cent made reference to adjudication. Pay-when-paid clauses persist in 10 per cent of contracts.
The group found evidence of what it calls "widespread attempts to delay referral of disputes to adjudication" by using the engineer as the arbiter of whether a dispute exists. It says this contravenes section 108 of the Act, as adjudicators do not have the power to sort out whether there is a dispute.
It also complains that the contracts it has reviewed show the powers of the adjudicator are being weakened by delays in paying disputed monies to the successful party. Disputed monies are being put in a trustee stakeholder account until the dispute has been settled or resolved by adjudication or litigation. Or they are being deferred to a much later date.
As an example, the group says some bespoke subcontracts require payment to be deferred until after practical completion of the main contract which could be some years ahead for early trades such as piling and steelwork.
It also complains that some bespoke contracts insist that the referring party to adjudication is responsible for all the adjudicator's fees and costs, which could deter companies from using adjudication. The Department of Environment, Transport and the Regions is promising to respond to the CLG's report later this month. by Kathy Watson
The Constructors Liaison Group has urged the Government to consider wide-ranging changes to the Construction Act after uncovering major abuses by contractors.
The group which represents specialist contractors, wants wider-ranging powers given to adjudicators, and a guarantee of their impartiality after uncovering examples that they were being retained by contractors at the start of contracts.
It also wants the Government to end the requirement that interim payments should only apply for work lasting longer than 45 days, after its research showed avoidance was taking place.
On the payment side, it seeks greater clarification on the due date for payment and final date when payment should be made, urging a limit of 17 days. And it requests a ban on contractual provisions which dilute the effect of the Construction Act.
In addition, CLG wants supply-only activities to be included under the Act, since off-site fabrication is a major thrust of the Government's drive to improve productivity under the Movement for Innovation.
Rudi Klein, CLG's legal adviser, said members were generally happy with the Act. "Things were far worse without it, they say, but we need to make the Act better."
When the Act came into force on 1 May 1998 as the Housing Grants, Construction and Regeneration Act 1996, construction minister Nick Raynsford promised a review after two years. He invited the industry to monitor and alert him to abuses.
As a result the CLG invited the University of Northumbria to conduct an independent survey on its behalf. The group also analysed over 50 standard and bespoke subcontracts issued since May 1998. It found a number of bespoke contracts contained clauses at variance with the Act, that most contracts made payments subject to activities higher up the contractual chain, such as pay-when-certified and only 26 per cent made reference to adjudication. Pay-when-paid clauses persist in 10 per cent of contracts.
The group found evidence of what it calls "widespread attempts to delay referral of disputes to adjudication" by using the engineer as the arbiter of whether a dispute exists. It says this contravenes section 108 of the Act, as adjudicators do not have the power to sort out whether there is a dispute.
It also complains that the contracts it has reviewed show the powers of the adjudicator are being weakened by delays in paying disputed monies to the successful party. Disputed monies are being put in a trustee stakeholder account until the dispute has been settled or resolved by adjudication or litigation. Or they are being deferred to a much later date.
As an example, the group says some bespoke subcontracts require payment to be deferred until after practical completion of the main contract which could be some years ahead for early trades such as piling and steelwork.
It also complains that some bespoke contracts insist that the referring party to adjudication is responsible for all the adjudicator's fees and costs, which could deter companies from using adjudication. The Department of Environment, Transport and the Regions is promising to respond to the CLG's report later this month.
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