Part II of the Housing Grants (Construction and Regeneration Act) 1996 sets out provisions to ensure that payments are made promptly throughout the supply chain and that disputes are resolved swiftly. The 1996 Act was amended by Part 8 of the Local Democracy, Economic Development and Construction Act 2009 to close loop holes within its provisions. The government undertook to review the effectiveness of the 2009 Act 5 years after it came into effect in October 2011. The results of the review are expected soon.

LPA 66 describes the provisions of the above acts, and how their requirements are intended to be implemented in practice. The key points covered are;
• the definition of construction contracts which are covered by the Act;
• the core provisions of the Acts, including the right to interim payments, the right to be informed about the amount due, disallowing pay when paid clauses, the right to suspend performance for non-payment;
• payment notices, the client must issue a payment notice within five days of the date for payment, even if no amount is due, or the supplier’s application for payment can be treated as if it is the payment notice;
• pay less notices, the payer must pay the notified sum unless he issues a pay less notice in the manner required by the Act; and
• implied mechanisms, if the contract fails to provide an adequate mechanism for determining the due date and the final date for payment then the Act will imply one.

It is anticipated that the government review will highlight the following issues;
• inflated interim applications, where the payee issues a payment notice there is a temptation to use an inflated value as there is no requirement for the notified sum to be a proper value; and
• the form and content of a valid payment notice, there has been much litigation over what constitutes a valid payment notice.

LPA 66 – Overview and Review of the Construction Act Payment Provisions can be downloaded here.

LPA prepared by Zita Mansi, Associate, BLM
Article prepared by David Hutchinson, AGS Honorary Member

This article was featured in the July/August 2018 issue of the AGS Magazine which can be viewed here.

The Reservoirs Act 1975 was set up to provide a legal framework for the creation, operation and maintenance of large raised reservoirs with a capacity in excess of 25,000 m3 above the lowest level of the downstream land (soon to be reduced to 10,000 m³). The Act and its associated Statutory Instruments provide a legal and administrative framework for the construction and management of reservoirs in a manner which reduces to an acceptable level the risks associated with the escapes of water from reservoirs. The preamble to the Act gives a legal statement of the objectives of the Act as to make further provision against the escapes of water from large reservoirs but in simple terms, this has been taken to be a requirement to ensure that the dam and reservoir are as safe (against an escape of water) as reasonably possibly for the persons and property downstream within reasonable economic considerations.

A key element of the Act is the requirement that the design, construction and management of large raised reservoirs must be under the direction of qualified civil engineers who have been peer reviewed as having appropriate levels of qualification and expertise. The Act requires these engineers to be on various panels, managed by DEFRA/EA, with different panels for strictly defined types of reservoirs (impounding/non impounding/service) and levels of expertise for varying duties.

The creation of a reservoir requires a panel engineer (the Construction Engineer) who is appointed to oversee the reservoir creation, to issue certificates at specific milestones during construction and remain responsible during the first filling and the early stages of use for between three to five years after the initial certification.

Subsequently, all existing reservoirs are required to be under the continual supervision of a Supervising Engineer; must be inspected by a higher level of panel engineer at a frequency not exceeding ten years or more frequently after construction in some instances; must have certain works carried out under the control of such engineers; information and monitoring records must be maintained at specified frequencies in certain formats; and works recommended in the interests of safety, (ie against the escape of water) must be carried out within certain timescales. There are also requirements if the reservoir is to be raised, abandoned, discontinued or if major works are to be carried out. The duties are carried out by various levels of panel engineer depending on whether the reservoir is impounding surface flows, non-impounding or a service reservoir, although in recent years, the latter two levels of panel engineer have essentially withered and the majority of experienced engineers are now on the All Reservoirs Panel who can carry out works for any reservoir. There is also a panel of generally younger engineers (the Supervising Panel) who have less experience and expertise but are able to carry out the generally annual, essentially visual, visits to the reservoir to observe and report on any changes.

The Act has operated well but the number of panel engineers has dropped substantially over the last 20 years or so and is now threatening to be inadequate for the operation of the Act as intended. There are also concerns about the adequacy of the experience of some of the recent appointees. An applicant to any of the panels is required to demonstrate their capability and experience and is generally interviewed by a panel of their peers who are already on the relevant or higher panel. Areas of inadequacies of knowledge and expertise are probed and a recommendation made as to whether the applicant is considered suitable or not. If a rejection is recommended, comments are usually given as to the perceived weaknesses and areas of inadequate expertise. Applicants are then required to address these issues and encouraged to reapply after a year or two.

Reservoir engineering depends substantially on a “feel” for the subject as much as strict engineering knowledge. It relies on an ability to consider and apply the interacting disciplines of geotechnical, hydrogeological, hydrological, hydraulic and environmental engineering in addition to the impacts of vegetation, animals and climate. Consequently, this knowledge and expertise can only be acquired by sufficient training and experience. This has become increasingly difficult in recent years with the tendency for design and construct contracts to be used, lack of site experience both in the UK and overseas and cost cutting within the industry. There has also been the introduction of separate and varying legislation for Wales and Scotland to complicate the situation and the creeping effects of ever increasing bureaucracy. Additionally, applicants previously had to be fellows of the ICE and to have had relevant design and site supervision experience. This has not been maintained and has widened the pool of applicants, but this has resulted in a reduction in the levels of experience and expertise in some instances.

The average age of the panel engineers has also increased with time with many having retired in the last few years and numerous others similarly due to leave the panels in the near future. This has resulted in the numbers on the All Reservoirs Panel falling by about 25% to about 30 in the last four years and by a somewhat greater amount from the formation of the panels in the mid 1980s when reservoir legislation was significantly amended by the 1975 Act. The reduction in the Supervising Panel has been more alarming with a reduction to a current level of about 150 engineers from three times this number in the mid 1980s. Concurrently, there has been a steady increase in reservoir numbers within the Act as numerous flood, amenity, farming and environmental reservoir schemes have been created.

Thus there is a looming problem of inadequate numbers of qualified engineers to carry out the required duties, and this will also impact on the training of future potential applicants to the panels. There is now little opportunity for UK engineers to gain experience of site work and to work on the larger, typically major water supply, schemes. No such large schemes have been built in the UK for several decades whilst overseas work is now typically staffed by local engineers. There also appears to be an issue that many of the younger engineers do not have the breadth of broad education and engineering experience or the appreciation of the complex issues involved for reservoir creation. The appreciation that reservoir creation is an evolving design and construction process, as are most projects involving a substantial geotechnical element, appears to be less accepted these days. Similarly, there have always been some panel engineers who have not always adequately considered the geotechnical issues sufficiently, together with the impacts of the relevant bio-engineering, vegetational and animal issues and this blinkered approach now seems to be more prevalent.

The opinion of the AGS is that there is a looming problem with the future numbers and quality of people on the various panels of engineers. With fewer experienced panel engineers, more reservoirs to be managed, the deterioration of dams under the effects of age and lack of maintenance, and the impacts of climate change and human activity, reservoir safety is likely to be compromised in the future. Action is required to improve the training and guidance for the younger engineers who are ultimately aspiring to All Reservoir Panel status.

A joint letter regarding the declining numbers of Panel Engineers was sent from the AGS and BDS to Professor Lord Robert Mair, President of the Institution of Civil Engineers and Professor David Balmforth Chair of the ICE Reservoirs Committee. The letter can be viewed here. A response to the letter from Professor David Balmforth Chair of the ICE Reservoirs Committee has been received and can be viewed here.

Article prepared by Chris Hoskins, AGS Honorary Member and reviewed by the AGS Loss Prevention Working Group.

This article was featured in the July/August 2018 issue of the AGS Magazine which can be viewed here.