The Scottish Parliament has passed the Contract (Third Party Rights) (Scotland) Bill. A date has not yet been fixed for it to come into force but it is likely to be early in 2018.
Parties to a construction contract now have a clear choice. They can continue with the traditional approach of using Collateral Warranties to create rights in favour of third parties; or they can use this new legislation to give enforceable rights to those third parties without the need for separate contracts. Which route is adopted will depend on the circumstances of each project. Either way, the existence of a choice is welcomed.
As a lawyer who has just obtained the 188th Collateral Warranty on a Scottish construction project (with more still to procure!), I can appreciate the attraction of such a choice in future projects. Much will depend on the attitude of those who will be relying on the rights created to protect their interests in a construction project. However, the new legislation provides a framework for an alternative where there is still room for contractual flexibility, with the added possibility, indeed probability, of attractive time and cost savings.
Written by
Related News, Insights & Events
Building safety in Scotland: Legislation comes into force on 6 January 2025
The Act was introduced by the Scottish Government to reduce the risk to life from unsafe cladding on high-rise homes.
Letters of Intent in construction projects: Practical insights
Letters of intent (LOI) are widely used in the construction industry. Here we explore what LOIs are, their role in the industry and how they can be used effectively.
Burness Paull strengthens energy and infrastructure expertise with appointment of new partner
03/12/2024
Burness Paull has strengthened its offering for clients in the energy and infrastructure sectors with the appointment of Scott Duncan.
