Housing Grants, Construction and Regeneration Act 1996
Last amended by Local Democracy, Economic Development and Construction Act 2009 in 2009. Part 8 amended the 1996 Act to extend the right to adjudication to oral construction contracts, reform payment notice requirements, and restrict the use of suspension.
Independent editorial summary — not the official statute text. Read the official version on legislation.gov.uk.
Summary
Part II of this Act (commonly known as the 'Construction Act') revolutionised the UK construction industry by introducing a statutory right to adjudication and a right to interim payment for all parties to construction contracts. It addressed the longstanding problem of late and non-payment in the industry and established adjudication as a rapid dispute resolution mechanism.
Key Points
- Right to refer any dispute under a construction contract to adjudication at any time (s.108)
- Adjudicator must reach a decision within 28 days (extendable to 42 days) (s.108(2))
- Right to stage payments for any construction contract lasting more than 45 days (s.109)
- Prohibition of pay-when-paid clauses except on insolvency (s.113)
- Payment notices and pay less notices required (ss.110–111)
- Applies to construction operations in England, Wales, and Scotland (s.104)
Parts & Sections
Amendments History
2009 — Local Democracy, Economic Development and Construction Act 2009
Part 8 amended the 1996 Act to extend the right to adjudication to oral construction contracts, reform payment notice requirements, and restrict the use of suspension.
Frequently asked questions
- What are the main changes the Construction Act made to the UK construction industry?
- Part II of the Housing Grants, Construction and Regeneration Act 1996 introduced a statutory right to adjudication and a right to interim payment for all parties to construction contracts. These changes were designed to address the longstanding problem of late and non-payment in the industry by establishing adjudication as a rapid dispute resolution mechanism.
- Which regions does the Construction Act cover?
- The Act applies to construction operations in England, Wales, and Scotland. It defines construction contracts broadly to include agreements for carrying out construction operations, arranging for them, or providing labour for the purposes of construction operations.
- Are pay-when-paid clauses allowed in construction contracts?
- Section 113 of the Act prohibits the use of pay-when-paid clauses in construction contracts. The only exception to this prohibition is when the contract is terminated due to the insolvency of the party that would otherwise be responsible for payment.
- How did the 2009 Act change the original 1996 legislation?
- The Local Democracy, Economic Development and Construction Act 2009 amended the 1996 Act to extend the right to adjudication to oral construction contracts. It also reformed payment notice requirements and restricted the use of suspension in construction projects.