Construction Contracts Act 2013 Briefing to Engineers Ireland Roads and Transport Group. Robert Rooney

Transcription

1 Construction Contracts Act 2013 Briefing to Engineers Ireland Roads and Transport Group Robert Rooney 12 OCTOBER 2016

2 What we ll look at today Aims and application of the CCA Payment provisions Adjudication

3 Why are we here? Poor cashflow in construction industry Serial insolvency Industry credit reliant on lowest tiers Perception of better approach in UK Enter Sean Gallagher and Feargal Quinn

4 Construction Contracts Act 2013 Pillars of the CCA (1) regulate payment cycles (2) introduce a more effective dispute resolution mechanism PAYMENT PAYMENT PAYMENT

5 Does the CCA 2013 apply? What s in» After 25 July 2016» Written or oral agreements» Broad definition of construction operations» Includes design, project management and advice on decoration or layout» whether parties to a construction contract attempt to limit or exclude its application or where the applicable law is Irish or otherwise. What s out» valued under 10,000 (but valued when?)» employment contracts» supply only contracts» owner occupier projects where dwelling has 200m² floor area» PPPs (top tier only)

6 Payment Construction Contracts Act 2013

7 What s changed since July?» payment claim notices» responses to payment claim notices» implied payment terms» rights of suspension for non-payment» outlaw of pay when paid clauses

8 New obligation Adequate mechanism for» interim payments and final payment» dates of payment cycles Danger if you don t» Schedule to CCA will apply» Loss of control» Loss of clarity

9 The new regime - timing Payment Claim Date» Date on which a payment claim is required to be made Payment Claim Dates» First - 30 days after commencement date» Regular - 30 days thereafter» Final - 30 days after date of final completion

10 Notices: contractor s and yours Payment Claim Notice» The amount claimed, even if zero» Period, stage or activity to which the payment relates» Basis of calculation» Subject matter of the claim Payment Response Notice» No later than 21 days from Payment Claim Date (not notice date!!)» Must be issued if payment contested» Must specify: Amount to be paid (even if zero) Reasons for difference in amounts Details of a claim (if that s why there s a difference)

11 Late response the consequences If the matter is not resolved by the Payment Due Date then the payment due must be paid. No guidance on what is the payment due or who decides what payment is due. Arguable - if there is no Response to the Payment Claim Notice, then» lose right to contest» amount due and payable» debt» suspension of works

12 New contractor rights Introduces suspension right for non-payment» 7 days notice Suspension contract v statute» Query one statutory suspension mechanism better than two potentially conflicting mechanisms? Pay-when-paid clauses prohibited (save for specific insolvency situations)

13 Key actions Ensure adequate mechanism for date and valuation Know your dates Issue payment response notice Prepare for spotlight

14 Dispute resolution Construction Contracts Act 2013

15 Dispute Provisions What has brought us here?» ineffective dispute resolution What s the change?» adjudication pay now, argue later What s the implication?» greater emphasis on administration, to avoid and manage disputes

16 Mandatory tight timelines Notice + 5 days Appointment Referral Reply Decision + 7 days days days + 7 days Payment

17 Adjudication your role Lead advocate Or alongside legal representative Compiling documentation» Contract» Correspondence in order» Internal records, diaries After the decision» 7 days to pay» Temporarily binding decision to litigate or arbitrate

18 Adjudication - Readiness Most of the initial work in adjudication is carried out by the referring party» But you can be ready Identify the signs Identify the dispute early Ensure that copies of relevant correspondence and documentation are available

19 Going forward Focus on administrative processes Be alert If in doubt, check

20 QUESTIONS