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Legal changes bring hopes for fairer payment process

13 October 2011

Changes to the Housing Grants, Construction and Regeneration Act 1996 came into force in England and Wales on 1 October and will become effective in Scotland from 1 November.

As part of the changes, new rules governing payment processes and adjudication for the construction industry should help to reduce the number of claims for non-payment of bills by creating a level playing field for both contractors and their employers. They do however do require an extensive review of standard forms and other contracts.

Alistair Kennedy, solicitor with law firm Tods Murray welcomed the changes, but warned 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...matters of non-payment can be dealt with proactively, rather than seeing them escalate into adjudication or a courtroom battle.’

Further details on the changes are available here.


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