Fairer Payment Rules Welcomed

New rules governing payment processes and adjudication for the construction industry should help to reduce the number of claims for non-payment of bills, says leading independent legal firm Tods Murray, by creating a level playing field for both contractors and their employers.

The changes to the Housing Grants, Construction and Regeneration Act 1996 (brought in by the Local Democracy, Economic Development and Construction Act 2009) however do require an extensive review of standard forms and other contracts.

Alistair Kennedy, solicitor with the firm’s construction team welcomes the changes, but does warn that they could take some getting used to because they herald a significant re-balancing of power.


He said: "The new Act aims to make the payment process fairer as both parties – employer or contractor – can initiate an invoice or payment notice to ease or generate cash flow.

"For this to happen the terms of construction contracts will have to change to comply with the new regulations, and getting used to these new terms could take time for some. However, with these mechanisms established within the contract, matters of non-payment can be dealt with proactively, rather than seeing them escalate into adjudication or a courtroom battle."

At the same time, new rules have also been introduced to make the adjudication system fairer and faster, by banning contractual clauses that stipulate that the costs will fall exclusively on one party by default.

Alistair continued: "Overall, the new Act offers up a fairer contractual approach so that no one party holds all the cards, and it should be welcomed."

(GK)