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
Appeal deadlines in arbitration – Court of Appeal provides guidance on when an award is “rendered”
15/09/2025
Clear language is essential when drafting an arbitration agreement – ambiguous wording can lead to unforeseen consequences.
Record numbers of visa sponsor licences revoked for rule breaking
12/09/2025
The UK Immigration policy is moving towards a restrictive system: record numbers of businesses are now banned from employing skilled foreign workers.
Retention reform: A potential turning point for UK Construction?
29/08/2025
Retention is a long-established form of performance security and feature of UK construction contracts. With a consultation underway, we look at what changes may come into force.
