Outlook
Despite the general doom and gloom following the budget, the construction industry is showing some signs of recovery. In the north west, the major areas of work remain student housing, infrastructure and publicly funded work and areas such as Knowsley and Sefton have a variety of ongoing and imminent projects. The announcement of the new Enterprise zones to be located at Liverpool and Wirral waters is bound to create new opportunities for developers, contractors and subcontractors in the local market.
Everyone is talking about…
The new localism bill which was presented to parliament on December 13th 2010. It is expected to receive royal assent at the end of 2011 and is currently the subject of much debate in the House of Commons. The intention of the bill, according to the coalition government is to empower local communities and give them control of public finance and accountability to local people, as well as opening up government to public scrutiny. In practice this will lead to more community consultation ahead of the planning applications for property and infrastructure projects. It is expected that the bill is likely to have most effect on developers bringing forward smaller scale developments which are currently subject to the Town and Country Planning Act 1990 and the Electricity Act 1989. Developers should be aware that the new local referendum powers mean that pole will be able to trigger referendums on proposed development, which must be taken into account by local planning authorities in planning decisions. Local councillors will also be able to campaign on certain issues without being accused of bias and the bill will allow local groups to buy assets such as pubs, shops and libraries. Local groups will be able to list assets they are interested in acquiring and offered opportunities to purchase them if they are put up for sale. Developers will need to be very careful to have followed the relevant consultation procedures under the bill before pushing ahead with their project. Watch this space for further updates as the consultation period progresses.
Other Developments
Rumour has it that the long awaited reforms to the Housing, Grants, Construction and Regeneration Act 1996 which are to be enacted by the Local Democracy and Economic Development and Construction Act 2009 are due to be brought into force on the 1 October 2011 and will apply to all construction contracts entered into after that date. This is likely to increase the use of adjudication as it removes the requirements for a construction contract to be “in writing” and will restrict the parties right to agree the burden of the costs of adjudication until after the notice of adjudication is given. Other reforms will introduce a “ slip” rule allowing adjudicators to correct arithmetic and other typographical errors in their decisions. Other important implications of the new act include the attempt to outlaw “pay when paid” clauses, new rules for the contents of withholding notices and an extension of the right to suspend performance of the contract for non payment. This will allow a contractor to claim an extension of time for a valid suspension plus any period of delay suffered as a consequence of that suspension. This may lead to an increased use of this remedy, which at the moment is not a tool often used due to the catastrophic effect on costs for the contractor if he wrongfully exercises a right to suspend
For further information please do not hesitate to contact: sduncan@jstlaw.co.uk
DDI: 0151 282 2872
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