A Commencement Order has been published which will bring into force on 1 November 2011 sections 139 to 145 of the Local Democracy Economic Development and Construction Act 2009. Together with the Commencement Order referred to in our e-update of 1 July, commencement dates for Scotland have now been set for all sections of that Act which relate to construction contracts.
The chosen date is surprising. The date for bringing these same sections into force in England is 1 October 2011, and we were expecting the same date for Scotland.
In England only, a draft of the Regulations amending the Scheme for Construction Contracts has also been published. These are due to come into force on 1 October 2011, but will apply only to construction contracts entered into after that date. The amending Regulations alter the adjudication and payment provisions of the 1998 Scheme.
Also in England only, the draft Exclusion Order has been published, which will also come into force on 1 October 2011. The Order provides that the ban on conditional payment arrangements (such as pay when certified arrangements) will not apply to first tier subcontracts in PFI schemes, i.e. the contracts between the SPV and Contractor. For these first tier contracts, it will still be possible to make payment to the contractor conditional on, for example, the issue of certificates in the top tier contract between the Authority and SPV.
The Exclusion Order does not go so far as to exclude such contracts from the effects of the other provisions of the Act, and it does not make provision in relation to Contractor to Subcontractor contracts, in respect of which the ban on conditional payments will remain.
View the Scottish Commencement Order.
View the draft Scheme.
View the draft Exclusion Order.
Disclaimer
The material contained in this article is of the nature of general comment only and does not give advice on any particular matter. Recipients should not act on the basis of the information in this e-update without taking appropriate professional advice upon their own particular circumstances.
