Housing Grants, Construction and Regeneration Act 1996 (HGCRA 1996) meaning

This Checklist reviews the entitlement to suspend under the Housing Grants, Construction and Regeneration Act 1996 (HGCRA 1996), and the matters that ought to be carefully considered before any party opts to suspend carrying out its obligations and duties under a construction contract. Is there a general common law right to suspend a contract? No. At common law, a party to a contract has no general right to pause or withhold ongoing performance of contractual duties when the other party is in breach, unless the breach is sufficiently serious to constitute a ‘repudiatory breach’, thereby permitting the innocent party to rescind or bring the contract to an end (see Practice Notes: Termination of a construction contract—Common law termination and Repudiation of contract). How does the right to suspend arise in a construction contract?...

Created in collaboration with 4 Pump Court. This Checklist highlights several principal matters a responding party ought to review on receiving a Notice of Adjudication. That review includes assessing whether grounds exist for a jurisdictional objection—if they do, the responding party must take particular actions so as not to forfeit its ability to advance the objection (either within the adjudication or later at enforcement). Further direction on jurisdiction can be found in Practice Notes: Grounds for a jurisdictional challenge in an adjudication and Making a jurisdictional challenge. Are there possible grounds to dispute the adjudicator’s jurisdiction? Initial points to consider include: the contract: is there a contract between the parties to the adjudication and has it been properly identified in the Notice of Adjudication? See Practice Note: The Notice of Adjudication (What should the Notice of Adjudication contain?) have the correct contracting parties been stated in the Notice of Adjudication? entitlement to adjudicate: ...

This checklist flags matters often needing attention before a party refers a dispute to adjudication. It also points to detailed, in-depth guidance on the various topics and identifies the relevant provisions of the Housing Grants, Construction and Regeneration Act 1996 (HGCRA 1996) where appropriate, as well. Legal matters Confirm there is a lawful basis to refer the dispute to adjudication, including whether it has crystallised and falls within the class of disputes that may properly be adjudicated. Entitlement to refer a dispute to adjudication The referring party must hold a legal entitlement to refer a dispute to adjudication. That entitlement may arise under statute, under the contract, or by an ad hoc agreement between the parties. Accordingly, consider the following: Is there a statutory right—does the parties’ contract meet the definition of ‘construction contract’ under HGCRA 1996, s 104 and is it not otherwise excluded from its scope? See Practice Note: What is a construction contract under the...

Bellway Homes Limited v Surgo Construction Limited [2024] EWHC 10 (TCC) What are the practical implications of this case? In adjudications governed by the Housing Grants, Construction and Regeneration Act 1996 (HGCRA 1996), a party is permitted to place only one dispute before the adjudicator (HGCRA 1996, s 108(1)). Where more than one dispute is advanced, the adjudicator has no jurisdiction to proceed (Fastrack v Morrison). This decision is the first to address whether a payee’s interim payment claim that proceeds on two alternative footings—(i) the true valuation of the works and/or (ii) entitlement to the sum applied for because no valid payment or pay less notice was served (often termed a ‘smash and grab’ claim)—should be treated as a single dispute. The court concluded that it is one dispute, with the consequence that an adjudicator has jurisdiction to consider both bases within the same reference. The outcome will be of real importance to parties engaged in interim payment contests, as it confirms that valuation and notice-default arguments...

KCL issued its third—and concluding—Adjudication Report in November 2024, collating findings from responses to two questionnaires: one directed to Adjudicator Nominating Bodies (ANBs) and a second to individuals involved in statutory adjudication. In this piece, Joseph Hale and Jennifer Fitzmaurice, a partner and professional support lawyer at Eversheds Sutherland, consider the report and what the future might hold for statutory adjudication in the UK. What key themes and trends does the Adjudication Report identify? The findings depict a dispute resolution process that is widely used and popular, clearly organised and well-structured, rapid and comparatively low-cost. ANBs recorded the highest level on record in the past year for adjudication referrals, at 2,264. Moreover, because the notion of ‘disputes’ has been broadly construed by case law since the Housing Grants, Construction and Regeneration Act 1996 (HGCRA 1996) took effect, parties can address issues during their projects, spanning everything from: inadequate contract administration (the principal source of disputes at 50%) inappropriate contractor selection (accounting for only 1%...

Realm Construction Ltd v ISG Construction Ltd [2024] SAC (Civ) 12 What are the practical implications of this case? Construction agreements often allow a payer to make deductions or set-offs from interim sums payable to the recipient, for amounts the recipient owes the payer (such as liquidated damages). The scope of the payer’s entitlement to deduct or set off is governed by the contract’s wording, and these withholdings frequently trigger disputes. Consequently, arguments about deductions recur frequently in relation to interim payments. This judgment offers useful guidance on a court’s approach to interpreting a clause that permits deduction or set-off. Key takeaways include: this decision is an unusual instance of the court adopting a reading it viewed as better aligned with commercial common sense and the legal context of the bargain (namely, the policy objectives of the Housing Grants, Construction and Regeneration Act 1996 (HGCRA 1996)), rather than the literal meaning of the words...

MF/2 MF/2 sits within the IET and Institution of Mechanical Engineers’ suite of Model Forms. It is intended for domestic (UK) or international agreements dealing solely with the supply of electrical, electronic or mechanical plant, and its full name is MF/2 Model Form of General Conditions of Contract for use in connection with home or overseas contracts for the supply of electrical, electronic or mechanical plant. The core terms have remained unchanged since 1999, save for amendment slips addressing the Contracts (Rights of Third Parties) Act 1999 (C(RTP)A 1999) and proposals to align it with MF/1 revision 5. Depending on the contractor’s scope and site characteristics, MF/2 can amount to a contract for ‘construction operations’ and fall within the Housing Grants, Construction and Regeneration Act 1996 (HGCRA 1996). It contains no adjudication provision and its payment terms do not satisfy those statutory controls—such provisions would need to be added by adapting comparable wording from MF/1. See Practice Notes: What is a construction contract under the HGCRA 1996? ...

This Practice Note examines when the Housing Grants, Construction and Regeneration Act 1996 (HGCRA 1996) is engaged on UK energy projects and highlights practical issues that can arise. It should be read together with Practice Note: What is a construction contract under the HGCRA 1996? The HGCRA 1996 applies to all construction contracts, as defined in the Act, across the following jurisdictions: England Wales Scotland When drafting a contract, parties should assess whether the on-site works fall within the scope of the HGCRA 1996 and, if so, ensure the terms are compliant. This discussion frequently surfaces on energy schemes where some or all elements of the works may sit within the statutory exclusions... Does the HGCRA 1996 apply to energy projects? For the HGCRA 1996 to apply, the agreement must meet the definition of a ‘construction contract’ in section 104—being a contract for carrying out (or arranging for, or providing labour for the carrying out of) ‘construction operations’ as set...

Slip rule An adjudicator may, within a reasonable period after handing down their decision, put right any accidental error or omission. Commonly described as the ‘slip rule’, it operates where the adjudicator’s mistake is an inadvertent slip that fails to capture their first intention. Though this principle was implied by common law in the absence of any contrary agreement, it is now set out expressly in section 108(3A) of the Housing Grants, Construction and Regeneration Act 1996 (HGCRA 1996). Section 108(3A) was introduced by the Local Democracy, Economic Development and Construction Act 2009 and applies to contracts entered into on or after 1 October 2011 in England and Wales, and on or after 1 November 2011 in Scotland. Under HGCRA 1996, s 108(3A), a contract must contain a written term permitting the adjudicator to correct their decision so as to remove a clerical or typographical error arising by accident or omission...

And in accordance with the [ insert [ ‘Scheme for Construction Contracts 1998’ OR relevant adjudication procedure chosen by the parties ] ] Between: [ Name of party 1 ] (the Referring Party) and [ Name of party 2 ] (the Responding Party) Introduction By virtue of the Housing Grants, Construction and Regeneration Act 1996 (HGCRA 1996), together with [ [ ‘the Scheme for Construction Contracts (England and Wales) Regulations 1998’ (‘the Scheme for Construction Contracts 1998’)’ OR the alternative adjudication procedure selected by the parties ] ], this document concerns the dispute set out below. The Parties and Addresses for Service The Referring Party is [ Full Name of Party 1 ] (‘[ Abbreviated Name of Party 1 ]’) of [ address ]. The Referring Party is [ set out brief description of the work it undertakes, including the relevant type of work for the present dispute ]. The Responding Party is [ Full Name...

What is adjudication? You have asked us to set out what adjudication involves and how the process commonly unfolds, in the context of [ [ your proposal to enter into a construction contract with ] [ insert name of the counterparty ] OR [ in anticipation of adjudication proceedings between ] you and [ insert name of the counterparty ] ]. Adjudication is a mechanism intended to help parties resolve disputes quickly and at relatively modest cost. Pursuant to the Housing Grants, Construction and Regeneration Act 1996 (HGCRA 1996), parties to construction contracts have the right to commence adjudication at any time. The dispute is referred to an adjudicator, who acts as an independent decision-maker. In most cases the adjudicator will be a construction industry professional (e.g. a quantity surveyor or engineer), or a lawyer with construction experience. They will consider the arguments advanced by both parties, and may draw on their own initiative and expertise, before reaching a decision on how the dispute should be determined. The party...

Notice of payer’s intention to pay less than the notified sum Reference: [ insert contract/project reference ] Date: [ insert date ]; To: [ insert recipient’s name ] Due date: [ insert payment due date under the contract ] Date of [ payment notice/application ]: [ insert date of relevant payment notice/payment application ] [ Payment notice/Application ] ref: [ insert reference number ] This notice is issued under section 111 of the Housing Grants, Construction and Regeneration Act 1996 and clause(s) [ insert clause number(s) ] of the contract dated [ insert date ]. Further to the above [ payment notice/application ], [ our OR [ insert payer’s name ] ] intention is to pay less than the notified sum. The amount [ we OR [ insert payer’s name ] ] deem due on service is [ insert sum (A–B below) ]: £ A Notified sum [ £A ] B Deductions [ State ground for each deduction...

Such works may fall under section 105(1)(b) of the HGCRA 1996 Such works may fall within section 105(1)(b), which treats road maintenance as a construction operation covering the construction, alteration, repair, maintenance, extension, demolition or dismantling of works forming, or to form, part of land, including walls, roadworks, power lines, electronic communications apparatus, runways, docks, harbours, railways, inland waterways, pipelines, reservoirs, water mains, wells, sewers, industrial plant, and installations for land drainage, coast protection or defence. Alternatively, section 105(1)(e) catches operations integral to, preparatory for, or rendering complete those works, including site clearance, earth-moving, excavation, tunnelling, laying foundations, erecting, maintaining or dismantling scaffolding, site restoration, landscaping, and providing roadways and other access. No specific authority concerns these works, yet courts have often held that less orthodox activities are construction operations, for example: Baldwins Industrial Services plc v Barr: crane with driver hire held integral, preparatory to, or completing works under sections 105(1)(a) and (e). Some contracts are excluded from being a ‘construction...

Yes, bank holidays are excluded when calculating the time period in an adjudication under the Scheme for Construction Contracts. The Scheme for Construction Contracts (the Scheme) sets out certain default rules governing the entitlement to start, and the practical management of, an adjudication process. Under section 108(5) of the Housing Grants, Construction and Regeneration Act 1996 (HGCRA 1996), the Scheme’s terms are read into a construction contract where it omits, or conflicts with, any of the obligations in subsections 108(1) to (4)...