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2010 PREVIEW: Courting controversy

The fallout from the blacklisting database, the OFT cover pricing inquiry and new corporate manslaughter legislation will continue to exercise the construction industry this year. CN looks at the biggest legal issues for 2010.

Corporate manslaughter

Cotswold Geotechnical Holdings will next month become the first UK company to face trial under the Corporate Manslaughter and Corporate Homicide Act 2007.

The firm is charged over the 2008 death of geologist Alexander Wright, 27, who was killed when a trench at a residential building site in Stroud collapsed. The trial is expected to last about four weeks. The Sentencing Guidelines Council last October proposed that companies found guilty of corporate manslaughter should face fines “in the millions of pounds”.

It is expected that final guidelines will be published in the spring.

Construction Act

Work is set to continue on secondary  legislation for various sections of the Local Democracy, Economic Development and Construction Act, which was given royal assent late last year.

Section 8 will amend current construction contracts legislation with the aim of “ensuring fairness” and helping to ensure prompt cash flow through supply chains.

OFT cover pricing inquiry

Contractors including Kier and Galliford Try have submitted appeals for the fines levied against them in the Office of Fair Trading’s cover pricing investigation.

Papers had to be filed by late November and firms now have to wait for their cases to be listed with the Competition Appeal Tribunal, which some legal experts say will not happen until the summer at the earliest.

Tower crane register  

The Health and Safety Executive’s new tower crane register will be introduced on 6 April. It will:

  • Require notification of the relevant information within 14 days of examination of the crane;
  • Require cranes already erected when the register comes into force to be registered within 28 days;
  • Place the duty to notify on the employer;
  • Allow electronic notification via the HSE website.

The HSE said improvement notices could be served on firms that fail to comply.

Blacklisting

The blacklisting furore is set to continue well into this year. Several legal claims have been, or are soon to be, launched against contractors found to have used a database set up by the Consulting Association to vet workers.

New regulations – making it unlawful for firms to refuse employment or sack individuals for appearing on a blacklist, and allowing for the pursuit of compensation against those who compile, distribute or use blacklists – will also be tabled in Parliament “as soon as possible”, according to the Government.

 CDM review

The Construction (Design and Management) Regulations, which came into force in April 2007, are undergoing a re-examination due to be completed late in 2010.

From the review, it is hoped the Construction Industry Advisory Panel will be able to show where the regulations have and haven’t been successful so far in order to refine them if necessary.

Long wait expected for investment decisions

While the Government shouts about taxing bonuses and continued spending on education and health to bolster recovery, it whispers that later “cuts” will be needed if the public debt is to be reduced.

There is no detail as to what or when those cuts will be, and those involved in major capital projects will have to wait until the landscape becomes clearer.

Public sector projects account for around 40 per cent of total construction output, and the private sector is unlikely to be in sufficiently good shape to fill the gap, so it is unsurprising that the industry is nervous.

Government departments are feeling the pinch and projects are being quietly shelved, adding still further to the uncertainty. This is difficulty and hard decisions need to be made.

What no one is prepared to say now is what those decisions are and where they will have an impact.

However, what they will mean for the public sector funding of construction and other capital schemes is clear – projects will find themselves on hold.

Martin Cannon is a partner in the construction group at Beachcroft LLP