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ARTICLE · 22 MAY 2018

Construction (Retention Deposit Schemes) Bill Published

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In the wake of Carillion's collapse - which was underscored by significant retention losses - a draft Bill proposing amendments to the current rules on protecting retention deposits in construction contracts was published on 23 April 2018.

United KingdomReal Estate and Construction
Louise Shiels
Louise Shiels

In the wake of Carillion's collapse - which was underscored by significant retention losses - a draft Bill proposing amendments to the current rules on protecting retention deposits in construction contracts was published on 23 April 2018.

Summary of the proposed provisions

Whilst the exact details of the scheme are still unclear, the draft Bill proposes to amend the Housing Grants, Construction and Regeneration Act 1996 (the "Act"), with the introduction of a new requirement that retention money must be deposited in a retention deposit scheme.

A retention deposit scheme is defined as a scheme which, "is made for the purpose of safeguarding cash retentions withheld in connection with construction contracts and facilitating the resolution of disputes arising in connection with such cash retention."

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