Briefing: The UK Construction Act process plant exclusion

Abstract

The UK Housing Grants, Construction and Regeneration Act 1996 Act imposed mandatory terms upon many construction contracts regulating payment and providing for interim determination of disputes by means of adjudication. Section 105(2) of the Act excluded from this regime certain construction operations at many process and engineering facilities, for example, at sites where the primary activity is power generation. A decision of the Technology and Construction Court, Cleveland Bridge (UK) Ltd v. Whessoe-Volker Stevin Joint Venture, has clarified the scope of this exception. The Court decided that the excluded operations were to be narrowly construed. This may mean that where the contract work includes the supply and assembly of plant, only the operation of assembly or installation of the plant will be excluded from the ‘reach’ of the Act. If the intention at the time of the 1996 Act was that both supply and installation of plant and machinery at such sites was to be excluded then it seems that the drafting may not have achieved that. The 1996 Act has been amended in other respects by the Local Democracy, Economic Development and Construction Act 2009 but not in this respect.