Improvement needed to construction payment terms

21 June 2007
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22 June 2007 | Siobhan Cameron

Suppliers to the construction industry are likely to benefit from legislative proposals for payment and contract terms.

Payments in the building sector must be made clearer and payment disputes settled by formal adjudication, according to the Department of Trade and Industry. Further, it recommends making suppliers' existing rights to suspend delivery in cases of non-payment more effective.

The advice follows the launch of a three-month consultation launched on Wednesday by the DTI, in conjunction with the Welsh Assembly Government. It plans to improve prompt and fair payment practices by building on existing legislation.

It is estimated amending and clarifying the existing payment deals could save the construction industry and its clients £5.4 million in administration time and costs.

The government also plans to encourage suppliers to take payment disputes to court by extending to oral contracts legislation that applies to written deals. The plans would also ensure costs involved are fairly allocated.


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