The Housing Grants Construction and Regeneration Act, 1996, (see Section 1.6) introduced for the first time in English Law a requirement that all construction contracts must include certain terms. These include payment provisions as set out in Section 1.6 and also provisions to allow either party to take any dispute to adjudication at any time. Most standard conditions were immediately amended to comply with the law, but for those, which were not so amended, the provisions of The Scheme for Construction Contracts Regulations 1998 will apply. The provisions of the Act apply to all construction works and work associated with construction in the UK such as architecture, design and surveying. There are some limited exceptions such as drilling for oil or gas, supply of materials and erection of machinery as set out in the Act but in effect most construction contracts and related consultancy agreements will be included.
The provisions of the Act require that should a dispute arise under the contract then this dispute can be referred to adjudication at any time and appointment of an adjudicator must follow within 7 days. The adjudicator must act impartially and is given wide powers to ascertain the facts and the law. He must reach his decision within 28 days or a longer period if agreed by both parties.
This period is seen by some as too short for major and complex disputes but appears to have worked well in practice for straightforward matters including technical issues, simple claims and claims for non payment. While most standard forms of contract always had similar provisions, the introduction of adjudication has allowed many subcontractors easier and quicker access to an independent decision on matters affecting them directly.