The government released the draft Bill that will amend the Construction Act on the 21st July. The changes could be enacted by Autumn 2009 within the Community Empowerment, Housing and Economic Regeneration Bill but will only apply to construction contracts entered into after the Bill comes into force. The Act (which celebrated its tenth birthday on 1 May) is regarded as a success - at least in entitling parties to construction contracts to refer their disputes to a 28-day adjudication process.

As we forecast (see our Law-Now of 14 May) the Bill reflects the proposals set out in the second consultation paper of June 2007. Analysis of the 71 responses was also released yesterday together with an assessment of the Bill's impact if it is enacted.

The proposed areas of action and inaction were summarised in the attached article in Building magazine last year and the accompanying table.

If the Bill were enacted in its current form, nine out of ten potential Act-avoidance devices identified in the attached article also from Building would survive. The one that does not survive would fall within the draft Bill's ban on pay-when-certified and pay-what-certified clauses. Ironically, the ban would also prohibit such clauses when they are used in good faith in management contracting and PFI/PPP transactions (as they frequently are at present).

The government has asked for feedback on the details of its drafting of the new Bill by 12 September. The various industry interest groups may still lobby on issues not covered by the drafting as the Bill passes through parliament.

As the House of Commons' report last week pointed out, one significant risk for the passage of the Bill is that the Department for Communities and Local Government rather than the Department for Business, Enterprise and Regulatory Reform is sponsoring it.

Interestingly, the government suggests reviewing the proposed changes, once they are enacted, in about three years' time - "to judge whether the expected benefits have been realised". So - there might be only a short respite after the new Act comes into force before we are talking again about amendments.

We are now, though, finally closer to a new Construction Act.

Access the draft Bill, analysis of the responses to the June 2007 consultation paper and the impact assessment by clicking here.

This article was written for Law-Now, CMS Cameron McKenna's free online information service. To register for Law-Now, please go to www.law-now.com/law-now/mondaq

Law-Now information is for general purposes and guidance only. The information and opinions expressed in all Law-Now articles are not necessarily comprehensive and do not purport to give professional or legal advice. All Law-Now information relates to circumstances prevailing at the date of its original publication and may not have been updated to reflect subsequent developments.

The original publication date for this article was 23/07/2008.