The Housing Grants, Construction and Regeneration Act 1996 of the United Kingdom (the “Act”) came into force in May 1998. The purpose of Part II of the Act is to reform certain aspects of the construction industry in the United Kingdom and provide statutory rights to contractors and subcontractors, which typically operate from a lower bargaining position than their clients. John Uff, QC, writes: “this is the first attempt to ‘ringfence’ the construction industry for the purposes of special legislation.”2

The Act is intended to apply to construction contracts only to the extent that they involve certain specified construction works to be performed in England, Wales or Scotland. Therefore, certain parts of the activities performed under a construction contract may be governed by the Act while other activities may be subject to other provisions of law. It is often difficult to segregate the works to be performed under the contract to which the Act will apply from other elements of the contract. This segregation becomes even more difficult once a dispute has arisen. The Act is, therefore, difficult to apply and may cause a significant amount of uncertainty for parties entering into construction contracts involving work performed in England, Scotland or Wales.

This article reviews the provisions of the Act which create this complication and the difficulty in the practical application of the Act, using examples

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