The provision of workplace services has been shaken up by a landmark judgment in the High Court. All construction and services companies will now be protected from non-payment when they enter into long-term maintenance contracts.

The Housing Grants, Construction and Regeneration Act 1996 (also known as the Construction Act) provides contractors with statutory payment procedures and speedy methods of dispute resolution. Up till now there has been uncertainty as to whether the Act applies to maintenance or service contracts, potentially leaving contractors financially vulnerable.

This has widespread implications for clients and contractors due to the large number of services that are affected, including maintenance to: heating systems; fire protection; lighting; ventilation; power supply; drainage; sanitation; water supply; air conditioning; ventilation; and security or communication systems.

It is not yet clear whether hybrid contracts will be affected, such as if a contractor provides a building maintenance service as well as a non-maintenance service (for example, catering). It is likely that contractors providing a mixture of services for a client will be protected by the Construction Act, but this will be a matter for the courts to decide.

John Cleaveley of Garretts Solicitors, who successfully represented Powerminster Ltd in their dispute with Nottingham Community Housing Association, will review the case and its implications for workplace managers in the August issue of Facilities Management Legal Update.