星空传媒

Sir Michael Latham鈥檚 review of the operation of the Construction Act has been passed to construction minister Nigel Griffiths.

The review of Part 2 of the Housing, Grants, Construction and Regeneration Act 1996 was announced in the March 2004 Budget. Latham was charged with producing the report and chairing a review group drawn from construction industry members. The two task groups established to provide initial reports have completed their assignment and these will inform a consultation document that the Department of Trade and Industry will issue later in 2004.

On adjudication the report identifies issues and suggests improvements that include:

• preventing the practice of one party requiring that the referring party pay both parties鈥� legal costs irrespective of the adjudication outcome;
• a reinforcement of the requirement for impartiality;
• the prohibition of trustee stakeholder accounts;
• clarification of the requirement for a contract to be in writing.

For payment requirements, proposals include:

• improving the effectiveness of the right to suspension;
• limiting the right of cross-contract set-off.

Griffiths welcomed the report stating: 鈥淚 am pleased the review has shown that the law, in general, works well even though it has raised some areas to reinforce standards of fairness and effiiency for the supply chain in the construction process.鈥�

The review follows lobbying of the Government by the Specialist Engineering Contractors鈥� (SEC) Group to identify possible amendments to the Act to tackle any unreasonable delay to payments through the supply chain. It was closely involved in the review process.

In the next phase of the review, the Department of Trade and Industry will develop a consultation paper. The Government is expected to conduct a full consultation exercise on suggested areas of reform to the Act during October/November 2004, with a consultation on proposed changes due to take place in early 2005.