subject: Knowing Your Rights [print this page] Some argue that the days of corruption in the construction industry ended in the eighties. Recent history doesn't endorse this. In only the last few years, some of the industrys largest and most prominent main contractors have been fined millions of pounds for rigging bids and artificially inflating prices.
This can be damaging for subcontractors, who regularly face immoral commercial practices, owing to the fact that many are modest businesses without the means or connections to fight their corner. John Huxtable set up the Confederation of Construction Specialists (CCS) and he found that the most recurrent form of abuse that specialists face is the addition of unjust clauses in contracts. Jim Mason, a senior lecturer at the University of West England, found in a study in 2009 that such practices are still widespread.
Termination clauses for the most minor contract breaches added to contracts by main contractors are common place. Main contractors use these to intimidate specialist firms. Other clauses make specialists answerable for all work and property on-site, even after they have left. Main contractors stipulate this so that they can offload responsibility onto subcontracting firms.
Main contractors can hold money for petty breaches of contract and this is an especially exasperating contractual term for subcontractors. Whilst there are serious reasons for withholding money, the arrangement is open to abuse as it grants the chance to limit the cash flow of specialists as a means of leverage. Although legislation has sought to restrict this practice, main contractors use loopholes to get by it.
Such practices are highly unjust and are also exceptionally counterproductive as they poison commercial relationships. It is also hard for specialists to combat them. The specialist who starts proceedings, may have to pay the main contractors and adjudicators costs regardless of the upshot of the case. With limited cash flow relative to their bigger counterparts, this dissuades subcontractors from fighting for their legal rights. If they cause any trouble then subcontractors fear it will stop future contracts.
Small to medium businesses must be protected in any industry. It is necessary that companies have a means to stand their ground and fight for their rights, especially when the bullying of smaller firms by their bigger counterparts has proved commonplace.
A number of companies provide support and training for construction specialists, which includes how to avoid contractual/ construction disputes and issues with main contractors and other large customers. Construction management courses ensure construction specialists are paid fairly, quickly and are not subject to unfair contractual terms.
