The Clarkson effect? The challenges of farm diversification

Farming diversification could mean ‘Diddly Squat’ without the right legal protections

The popularity of TV shows like Clarkson’s Farm may have shed light on the daily challenges faced by farmers and landowners across the UK, but away from the TV lens, many in the sector have long since understood the need to diversify. From campsites, farm shops and cafes to residential developments and wind farms, construction activities are often centrally important to the diversification of a landowner’s business.

It's important to understand that this type of activity can involve legal and regulatory considerations that must be carefully managed. It’s essential that anyone paying for construction works (or related services such as surveying or consultancy) takes steps to protect their position. 

So, where should you start?

Any type of construction work should always involve establishing a written construction contract that complies with the requirements of the Housing Grants, Construction and Regeneration Act 1996, or ‘Construction Act’. 

The Construction Act sets out compulsory terms that must be included in any contract for ‘Construction Operations’. 

‘Construction Operations’ are very broadly defined and encompass most of the commercial activities described above, as well as routine maintenance on waterways, walls, roads, and even fencing. 

Where no contract is in place, or the contract fails to contain key provisions, the Act implies terms into the parties’ agreement, resulting in uncertainty and obligations that bear little resemblance to those written in black and white.  

Terms required by the Act

• A right for a contractor to be paid in stages where its works last longer than 45 days.
• A clear mechanism to determine the payments due, including clear due and final payment dates.
• A right for disputes to be determined by Adjudication (an accelerated, 28-day dispute resolution mechanism often resulting in unpredictable judgments).
• A right to suspend construction activities for non/late payments.

Landowners need to be aware of their legal obligation to appoint professionals and building contractors who are competent to fulfil statutory roles, including those of Principal Designer and Principal Contractor, for purposes of the Building Regulations and the CDM Regulations. These key roles ensure health and safety during the design and construction of projects and that designs and work are properly planned, managed, and monitored to comply with the Regulations. There are also requirements to notify the HSE about the commencement and completion of works. 

Any client who fails to make these appointments assumes responsibility for undertaking these roles themselves and faces civil liability and even prosecution if they don’t.  

Opportunities to diversify

From offering opportunities to diversify and providing sustainable energy solutions to vital ongoing maintenance, construction is likely to play a key role in many landowners’ long-term plans. Understanding the risks in contracting and the associated statutory duties is crucial to managing risk and avoiding the pitfalls and disputes that can beset even straightforward construction projects.  

For more information on how the construction and engineering team at Muckle can support you, please contact team head Adam Aston: [email protected] or 0191 211 7980.