Although welcoming the Government’s proposals to improve payment in the construction industry, the Electrical Contractors’ Association (ECA) believes an opportunity has been missed.
The proposals announced by Industry and the Regions Minister Alun Michael, follow a review of the Construction Act that aimed to improve the payment framework within the construction industry. In particular the new proposals include:
• Introducing a requirement that certification of the sum due, by one of the contracting parties or a third party becomes an essential feature of contractual payment mechanisms.
• Removing the section 110(2) requirement for a payer notice.
• Introducing a right to apply for payment where a certificate is not issued by the due date.
• Making certain payment mechanisms including pay-when-certified clauses ineffective.
The Government believes its proposals will improve the fairness of how construction contracts are agreed and operated.
Commenting on the Government’s proposals, David Pollock, ECA Director said: “The ECA is pleased to support the Government’s review of the Construction Act and will continue contributing to the development of proposals that both ensure fair payment practices occur throughout the supply chain, and address anomalies within the adjudication process. Many of the key issues that concern ECA members have been identified by the Government. It is important now to see how these will be taken forward as proposed amendments to the legislation.”
He continued: “Although it comes as no surprise, I am disappointed that the opportunity has been deferred to consider the implications of the recent judgement over what constitutes ‘a contract in writing’. There appeared to be widespread industry support for addressing this matter. Currently, considerable doubt exists over whether the Act applies in particular situations or not. There is still time to do something about this.”