Construction contracts act becomes a reality

HAI has welcomed the signing of the Construction Contracts Act by, now former, Minister for Business and Employment, Ged Nash, on April 13th, 2016. The signing gives legal effect to the provisions of the Construction Contracts Act that aim to regularise cashflow for construction companies and reduce costs by providing for rapid resolution of disputes.

Minister Nash stated: “The changes to the way applicable construction contracts will now be drawn up will guarantee payment to sub-contractors at regular intervals during the life of a contract, and in addition, the legislation provides for a statutory adjudication service which entitles parties involved in a payment dispute to seek to resolve the matter through adjudication. This will take place in a short time period – the Act envisages 28 days.” It is intended that the Code of Practice relating to the conduct of adjudications will be published shortly.

Annemarie Harte, Chief Executive Officer, HAI, commented: “This Act will benefit the entire construction industry supply chain, including the builders merchant and hardware sector, by bringing greater certainty to cashflow and streamlining the dispute resolution process. This Act will assist companies in budgeting and investing, thereby encouraging greater growth and competitiveness. I would like to thank the Minister, on behalf of the builders merchant and hardware sector in particular, for making this vital piece of legislation a reality.” The Construction Contracts Act provides, subject to some exceptions, new minimum contractual provisions concerning payment arrangements between the parties to a construction contract. Where payment disputes do arise between the parties to a construction contract, either party will have the right to refer the payment dispute for adjudication, which will be concluded within a set timeframe. Where the parties cannot agree on an adjudicator, the Chairperson of the Ministerial Panel of Adjudicators will appoint an adjudicator from that Panel to the dispute. This follows on from the appointment of Dr Nael Bunni as Chairperson of the Panel of Adjudicators last July, and the subsequent appointment of a Panel of Adjudicators in December.