The abolition of the contracts "contracts in writing' rule in the 2009 Construction Acts: potential implications for UK adjudication

Abstract

Purpose – The UK construction industry has been at the forefront of finding efficient, cost-effective and fair methods of resolving disputes. Therefore, to ensure the 1996 Act is more effective in achieving its intended objective, the new Act came into force on the 1 October 2011 in England and Wales, and 1 November 2011 in Scotland. The purpose of this paper is to explore one of the most important amendments in the new Act, the abolition of the “contract in writing” rule. The extent to which the UK industry is aware of the likely implications of the abolition of the “contracts in writing” rule in the new Act on the adjudication has not been empirically explored – which is the core raison d'être of this paper.

Design/methodology/approach – A web-based, online questionnaire survey method was employed to collect data. Descriptive analysis was used to analyse the data obtained from the 102 completed and usable questionnaires for inference and conclusion. This research employed t-tests to compare means of small to medium-sized enterprises (SMEs) and large organisations.

Findings – The findings suggests that the UK construction industry is well aware of the abolition of the “contracts in writing” rule in the new Act and the industry perception is that it is good for their business. The survey revealed that the amended rule in the new Act would significantly increase number of adjudications, number of hearings before the adjudicator, assessment of witness evidence, costs of the adjudication process, and timescale of an adjudication process. The three most important challenges to the adjudication process with the amended rule in the new Act include: assessment of wholly oral or partly oral contract terms that were agreed, availability of evidence, and availability of information. There are no significant statistical variations between the responses of the SMEs and large organisations.

Practical implications – The paper concludes that the new Act will have significant impact on the UK adjudication. Therefore, the UK industry urgently needs to adopt and become accustomed to quite significant changes in the new Act. It is advised that an industry-wide awareness-raising programme on the new Act needs to be developed and deployed.

Originality/value – The paper improves understanding and awareness of the construction industry professionals regarding the likely implications of the abolition of the “contracts in writing” rule in the new Act on the adjudication.