Professor Rudi Klein has been a leading campaigner and advocate for the interests of construction subcontractors, combatting payment abuse in particular, for as long as most of us can remember.
He led the industry’s efforts to secure legislation in 1996 – the Housing Grants, Construction & Regeneration Act (better known as the Construction Act) – to outlaw some of the worst commercial practices, such as pay-when-paid clauses, and subsequently lobbied successfully for amendments to improve the Act. He is credited with achieving the statutory right of suspension of work for late or non-payment.
He also advised other jurisdictions on their own versions of the Construction Act and drafted the 2013 Irish Construction Contracts Act for the late Senator Feargal Quinn, member of the Irish Parliament.
He is regarded as the leading UK authority on the use of project bank accounts (PBAs), which ensure that payments for subcontractors are protected in ring-fenced accounts from losses due to upstream insolvencies. His efforts have seen an increasing use of PBAs with their being mandated for UK government departments and agencies, and by all the devolved administrations (subject to certain conditions). Following the collapse of Carillion he renewed his efforts promote the use of PBAs by drafting a private members’ bill for Debbie Abrahams MP that sought to mandate the use of PBAs for all public sector projects over £500,000 value.
Over many years he has led calls for reforming the use of retentions in the construction industry. In 2015 he worked with Lord Aberdare in the House of Lords to persuade the government to review the practice and drafted a private member’s bill for Peter Aldous MP to introduce change.
Although leaving the SEC Group, Professor Klein will continue to support the industry in an advisory capacity through his private legal consultancy.
Of his organisation’s achievements over the years, he said: “I had a very small team but we were always keen to deliver on a number of priorities that would be of tangible benefit for the majority of firms – mainly SMEs – in the industry. I also had an incredible amount of support from my chairman, Trevor Hursthouse OBE and from the late Lord O’Neill who died in August after having been president of SEC Group for over 15 years.”
Trevor Hursthouse said: “Rudi’s determination to cut through the seemingly endless industry reviews, reports and often ignored recommendations and deliver tangible outcomes which bring real benefit to the industry is self-evident. Operating a business in the industry for more than 40 years, I recognise the value he has delivered, especially to SMEs. Working with him as part of SEC Group, I applaud his commitment to his role as CEO and the exceptional work he has done to promote necessary change across the industry.”
David Frise, chief executive of the Building Engineering Services Association (BESA), said: “Nobody could have fought the good fight on behalf of SMEs with greater passion and commitment over such an extended period than Rudi. His burning desire to see right prevail and for hard pressed contractors to receive their due payments has never let up and he has demonstrated his brilliant and innovative legal brain on countless occasions to try and redress the balance in their favour.
“Late payment and unfair working practices continue to blight the industry and put the future of many vital businesses at risk, but the situation has improved immeasurably thanks to Rudi.”
On the 25th Anniversary of SEC Group, Lord Adonis, past chairman of the National Infrastructure Commission, said: “The achievements of SEC Group in improving the commercial practices for SMEs in the UK’s construction sector are impressive. If there is one body……which has made a difference that body must surely be SEC Group.”
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