H Is For…Housing Grants, Construction and Regeneration Act 1996.
Snappy title this month. Don’t worry you’ll be forgiven if it doesn’t sound like the most exciting article on the blog.
Despite the title, this Act is possibly one of the most important in the world of construction. Also known as the Construction Act, one of its main aims was to ensure prompt payment and resolve disputes faster.
Applying to all construction contracts, (and since the 2011 revision, this also includes those not in writing) the Act is what gives folk a statutory right to adjudicate regardless of what the construction contract says.
28-day statutory Adjudication is the most common form of dispute resolution in the UK. The 28-day process, whilst often referred to as rough justice, has a number of benefits over traditional forms of dispute resolution.
For a start, the process is often cheaper than other methods. Whilst the 28-day deadline can be extended in certain circumstances, you are likely to receive a decision much faster than you would in litigation or arbitration. And that should mean less time spent racking up legal and expert fees.
The decisions handed down by an adjudicator are ‘temporarily binding’. In practice, this means you pay now – argue later. This helps keep cash flow moving, making it less likely that parties will become insolvent part way through the project.
Even when decisions are challenged, the courts tend to support the position of the adjudicator. This only tends to change if there are very clear jurisdictional challenges or there has been a clear breach of natural justice.
If you are looking for some practical tips for preparing for adjudication, take a look at this video from our #ConstructionCast series.