Building & Construction News Alert: Important changes to the current payment claim and adjudication process
Extensive amendments to the Building and Construction Industry Payments Act 2004 (Qld) (BCIPA) were announced by the Queensland Government earlier this month. All members of the building and construction industry should familiarise themselves with these proposed reforms, which will significantly impact the state of play in building and construction projects if they are adopted by Parliament.
The proposed amendments flowed from recommendations made by Mr Andrew Wallace, a barrister with experience in the industry, following his review of industry stakeholder feedback which revealed that changes were needed to restore equity and improve the functioning of the BCIPA system.
Some key amendments are summarised below:
- Authorised Nominating Authorities will be abolished, and one central Adjudication Registry will be established within the Queensland Building and Construction Commission to register and appoint adjudicators.
- A composite scheme will be established to acknowledge that the ‘one size fits all’ approach is not appropriate. Claims will fall under the ‘composite scheme’ if they involve sums greater than $750,000, latent conditions or time related costs.
- Timeframes for making and responding to all payment claims will be extended, with additional extended timeframes being granted in claims which fall under the composite scheme.
- Respondents to claims will be able to provide information in the adjudication response which was not included in the payment schedule.
When will these reforms affect you?
The proposed amendments to BCIPA have been approved by Cabinet and the Government has indicated that they will be debated in Parliament in mid-2014, with changes likely to come into effect on 1 September 2014.
If the amendments are accepted, only contracts entered into after the amendments come into effect will be subject to the new BCIPA system. All adjudication applications made on or after 1 September 2014 however must be made to the new Adjudication Registry, rather than an Authorised Nominating Authority.
All members of the building and construction industry should consider how these reforms could affect their business and be prepared to alter their established practices regarding payment claims and adjudications.
We anticipate that a Bill detailing the proposed legislative changes will be released in the coming months, and will provide you with updates as the reform process progresses.
Tony Mylne, Partner
Jasmine Blight, Solicitor