The new ‘Construction Act’ has been postponed.

The new ‘Construction Act’ has been postponed. But don’t waste time, you must now update your terms, or suffer the consequences.

Because the Government is keen to see the application of the new ‘Construction Act’ (The Local Democracy, Economic Development and Construction Act 2009) across the UK as a whole, and as the Scottish and Welsh Assemblies have not yet set a commencement date for the Act, the commencement date for the Act in England has been further postponed. It was originally anticipated that the Act would come into force in April 2011, but it is now expected to come into force at the slightly later date of October 2011. 

So we can all sigh a breath of relief about that. But do not get too complacent. Without wishing our lives away, October will be upon us before we know it, and between now and then you need to ensure that your contracts and subcontracts are amended to suit the commencement date of the new ‘Construction Act’. If you do not attend to this, you could face the situation where a Payee could issue a Payment Notice, and the amount on that Payment Notice would be the amount due. That could be a good thing or a bad thing depending if you are the Payee or the Payer. In either case you will face consequences that you may not be prepared for.

Many of our clients are asking us to upgrade and/or amend their contracts and subcontracts now in anticipation of the application of the new ‘Construction Act’; and you really need to consider doing the same so that you are not ‘left behind’ and left unprepared for the major changes coming our way.

If, as a result of the above, you feel that your contracts or subcontracts need to be upgraded or amended, you need to contact us (i.e. Melbury Construction Consultants Ltd) as we offer a Contract and Subcontract drafting service for many of our clients.

The new ‘Bribery Act’ has been postponed.

The Government has postponed the implementation of the new anti-bribery law to allow for further consultation for how companies can prepare for its demands.

Under the Bribery Act 2010, there are four offences: the two general offences of paying and receiving bribes, the bribery of foreign officials and the failure of commercial organisations to prevent bribery. The Act will raise the maximum jail term for bribery by an individual from 7 years to 10 years, and a company convicted of failing to prevent bribery could receive an unlimited fine.

A survey has revealed that more than one in eight UK companies lack a formal anti-bribery and corruption programme, and does not have a plan in place covering such areas as risk assessment, training, monitoring and investigation.

Those companies are obviously leaving themselves vulnerable to possible future prosecution and really must attend to the introduction of the appropriate and necessary procedures in the relatively short time scale available before the Bribery Act 2010 comes into force.

If you would like any further information on this matter, or if you would like to discuss the steps that you should consider taking, please do not hesitate to contact Melbury Construction Consultants Ltd for specific advice

Liquidations are on the increase.

Unfortunately, it has historically been the case that there is an increase in liquidations as the economy comes out of recession. Therefore, the construction industry will almost certainly be further affected by matters relating to insolvency over the next year or so. The public sector cuts that will come into effect more and more through this year are bound to add to the problems.

Insolvency anywhere in the supply chain from Employer, Contractor to Subcontractor can have a major impact on many parties involved with a construction project (for example, an Employer becoming insolvent may prevent a Sub-Contractor being paid by a Contractor), and therefore it is vital that an understanding of the risks and the rights associated with an Insolvency are understood by our clients.

Because we are seeing the effects of Insolvency all around us, and we have seen some of the big names fall recently (e.g. Rok, and Connaught) Melbury is running free breakfast seminars on this highly complex and little understood area of the law. The seminars will explain what the various insolvency terms (i.e. administrations, receiverships, liquidations, CVA’s etc.) actually mean, and will consider how you can best protect yourself in the event that an Insolvency occurs somewhere within the chain of contracts that you are involved with (through the use of bonds, warranties, and right of title provisions etc.)

If you would like any further information on this matter, or if you would like to discuss the steps that you should consider taking, please do not hesitate to contact Melbury Construction Consultants Ltd for specific advice.