NBS topic areas

Keep up to date with industry developments

NBS solutions|

Products and services for all construction projects

NBS Create

NBS Create - our groundbreaking new specification tool. Authored by our in-house experts to make sure your time specifying is fast and efficient, saving you time and money.

The LDEDC Act 2009 and NBS. What's happening in 2011?

Readers may be aware that Commencement orders have now been issued in England and Scotland, to bring Part 8 of the Local Democracy, Economic Development and Construction Act 2009 (LDEDC) into force later this year. We have received a number of queries asking what NBS is doing about this, so Technical Author Roland Finch sets out the latest position.

What is this Act all about?

Firstly, we must look back to the Housing Grants, Construction and Regeneration Act 1996 (often referred to as the "Construction Act".) Among other things, this legislation introduced, for certain construction contracts (as defined), a right to Adjudication, together with a regime for payments. Procedures for both are set out in statutory schemes, which will supersede the contractual arrangements in contracts which do not comply with that Act.

The LDEDC Act is the result of the government's long awaited review of the legislation and the way it operates in practice. Following lengthy consultation, the new Act, which amends part 2 of the earlier Act, received Royal assent in November 2009, but its provisions have not yet been brought into force, partly because of the 2010 general election.

What does the Act do?

For Adjudication, there are number of changes, including the removal of the "in writing" requirement, for contracts to be covered by it, as well as a new statutory slip rule and liability for the costs of the adjudication.

There are also several changes to the procedures and format for payment and withholding notices, the right to suspend for non-payment and the abolition of pay-when-certified clauses.

The Act gives Ministers powers to draw up a scheme showing a 'standard' method and timetable to be followed in each case.

What does this mean for contracts?

The Act has statutory effect. That means, subject to some exceptions, it will take precedence over existing contract provisions in these areas where the contract does not comply with the legal requirement. In the 1996, Act, 'Pay when paid clauses' were outlawed and in the 2009 Act this has been extended to 'pay when certified'.

If the contract terms don't comply with the statutory scheme, then the scheme will take precedence.

What are the publishers doing?

As you might expect, the various publishers of standard contract forms do not all have the same approach or timetable.

JCT: At the moment, JCT seem to be most advanced with their preparations, having already announced that they will be reprinting the majority of their standard forms, to incorporate the changes due to the Act, and also the Terrorism Cover amendment that they published in 2010. SBCC have advised us that they intend to follow the same path, although the Commencement order for England has a date of 1st October, but in Scotland it is a month later. (At the time of writing there is no date for Wales or Northern Ireland, but this should be resolved shortly)
NEC3: NEC are considering an addendum, similar to the Y(UK)2 which they issued in response to the 1996 Act
ICE: The Institution of Civil Engineers have indicated that they are not currently supporting ICE contracts – they have expressed a preference for NEC contracts (see above)
JCLI: JCLI contracts are based on JCT MW, so we expect them to be updated in a similar way
RIAI/ Irish Department of Finance. The Act does not apply to these contracts so no changes are envisaged at this time
IET/ IMechE: MF1 has recently been updated, but not to take account of new legislation
NFDC: We are not aware of any current plans to update.

Further details of all these publications can be found by visiting www.ribabookshops.com.

What is the effect on NBS content?

This new legislation represents a fundamental change for many of the contracts, and as such it will need to be incorporated across the NBS product range. We include Preliminaries sets for some contracts from each of the publishers listed in our NBS Building, NBS Landscape and NBS Engineering Services products as well as NBS Scheduler while NBS Contract Administrator contains administration forms for use with affected Contracts.

It's also worth remembering that the law will even apply to contracts that are not being updated, including JCT 2005 and JCT '98, which is still supported by NBS Contract Administrator, for example.

This means a huge task for our Technical Authors to review and update existing NBS clauses and guidance. It is our intention to make all the changes as soon as possible, although obviously this will depend on the contract publishers' own schedules.

Watch out for online updates, and if you have any queries, please feel free to contact us.