Chapter 16: Change in Law

STANDARDISATION OF PF2 CONTRACTS PROVISION	SOURCE OF CHANGE WHERE RELEVANT	EXPLANATION OF HOW PROVISION HAS CHANGED THE SoPC4 POSITION
Chapter 16: Change in Law
Chapter 16	Policy	Liability for costs of capital work required in the operational period (for a change in law which was not reasonably foreseeable) should now lie with the Authority.
Section 16.1.1 (Introduction)	Market up-date	Suitable drafting has been inserted requiring the Contractor to comply with all relevant legislation .
Section 16.1.3 (Introduction)	Policy	It is recognised that the Contractor will often not be in a position to price the full cost of prospective changes in law in the operational phase effectively.
Section 16.1.4 (Introduction)	Policy	The general position is that where the change was foreseeable at the time the Contract was signed the risk will lie with the Contractor save that (a) during the construction phase, whether it was foreseeable or not, the Contractor will bear the risk of a General Change in Law and (b) at all times the Contractor will bear the risk of a General Change in Law which does not involve Capital Expenditure.
Section 16.3.2 (Exceptions)	Policy	Some sectors have developed change in law provisions that are suited to their particular circumstances and these may need derogation from the approach adopted in this Chapter. Waste is an example.
Section 16.6.1 (Allocation of Risk)	Clarification	Costs arising from Discriminatory and Specific Changes in Law which were not foreseeable at the time of the signing of the Contract, and whether involving Capital Expenditure or not, should be borne by the Authority during both the construction and the operating phases of the Contract.
Section 16.6.3 (Allocation of Risk)	Clarification	Costs arising from General Changes in Law should, during the construction phase, be a Contractor risk, whether or not the Contractor was or should have been aware of the Change in Law at the time of the signing of the Contract.
Section 16.6.4 (Allocation of Risk)	Policy	General Changes in Law which come into effect during the Service Period and which were not foreseeable at the date of the Contract should be an Authority risk if they involve Capital Expenditure and a Contractor Risk if they do not.
Section 16.6	Clarification	Where there are extended build periods (as with some waste projects) some sharing of construction delays arising from change of law may be suitable.