As of 1 November 2011 the Local Democracy, Economic Development and Construction Act 2009 comes into force, amending the Housing Grants, Construction and Regeneration Act 1996. The changes will affect construction contracts entered into from 1 November 2011.

The main changes are:

• The 1996 Act now applies to construction contracts even where they are not in writing;
• An adjudicator now has the ability to make changes to his/her decision, insofar as to correct any typos or other errors. Previously, where an adjudicator's decision contained a manifest error it was binding on the parties;
• Any contractual provision relating to the allocation of adjudicator's costs will be ineffective unless:
  (1) it is made in writing, is contained in the construction contract and confers power on the adjudicator to allocate his fees and expenses as between the parties, or
  (2) it is made in writing after the giving of notice of intention to refer the dispute to adjudication;
• New payment provisions have been introduced outlining payment dates must not be conditional upon performance of another contract nor must they be determined on the basis of a notice from the payer to the payee;
• New notice provisions have been introduced stating that the payer must give notice to the payee within 5 days of the due date, specifying the sum due and how it was calculated. If no such notice is given the payee may serve notice of sums due to the payer;
• Having received such notice, if the payer considers that a lesser sum is due, it must serve a counter notice on the payee confirming how much it is prepared to pay and on what basis that amount was calculated;
• Finally, where a party exercises their right to suspend performance due to non-payment, the party in default must pay the expenses incurred as a result of exercising such right.

If you have any questions on the changes introduced by the 2009 Act please feel free to contact our experienced team.