Construction Firms Caught By Increased Regulation

22-12-2006

Half the UK's construction companies have faced the threat of court action in the past 12 months, according to a survey by law firm Pinsent Masons.

The survey of 165 construction companies attending the firm's recent annual construction and engineering law conference also found that 92% of those questioned expected the levels of litigation in the industry to stay the same or increase over the next 12 months.

More than half (58%) cited employment issues as posing the greatest litigation concern. The UK's employment laws have recently witnessed a number of changes in areas such as the Transfer of Undertakings, Disability Discrimination, National Minimum Wage and Working Time Regulations. On 1st October 2006, age discrimination legislation was introduced into UK employment law for the first time.

Around one-third (32%) of companies said the threat of litigation from regulatory changes was a significant concern. Chief amongst these was in the area of health and safety. With the Corporate Manslaughter Bill expected to become law next year, a quarter of firms surveyed expect it to have a significant effect on the construction industry's health and safety record.

"We are now seeing the effects of legislation on an increasing regulated industry," said Richard Laudy, Head of the Construction Sector at Pinsent Masons. "Many involved in the industry feel that it is very much under scrutiny at present because of the forthcoming changes to the CIS. A key challenge for the construction industry is to keep abreast of the various changes so that it can direct its focus on to the opportunities for growth in a buoyant market."

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