Loss Prevention Loss Prevention Alerts

LPA 66 – Overview and Review of the Construction Act Payment Provisions

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Published February 2018

Part II of the Housing Grants (Construction and Regeneration Act) 1996 (“the Act”) requires all “construction contracts” (as defined in the Act) to contain an “adequate mechanism” to determine what payments become due and when. These “payment provisions”, primarily set out in sections 110 and 111 of the Construction Act and Part II of the Scheme for Construction Contracts (England and Wales) Regulations 1998 (the Scheme”), were intended to encourage simplicity and clarity but were misused in practice. They were amended by Part 8 of the Local Democracy, Economic Development and Construction Act 2009 (“the 2009 Act”) with effect from October 2011 in an attempt to resolve these problems.