The Queensland Government has announced a number of significant amendments to the Building and Construction Industry of Payments Act 2004 (BCIPA). The amendments are likely to come into effect on 1 September 2014 and will apply to all contracts entered into after that date.

The three key areas of reform are briefly discussed below.

1. Appointment of adjudicators

The amendments will establish a single Adjudication Registry responsible for appointing adjudicators based on their skills, experience, areas of expertise and availability. The establishment of a single Adjudication Registry is intended to eliminate the perception that certain ANAs are “claimant friendly”and remove the potential for what is commonly referred to as“adjudicator-shopping”.

2. Timeframes

 

In recognition that the “one size fits all” concept is not appropriate for large or complex claims, the Government seeks to overhaul the existing statutory timeframes and implement a “dual model regime”. Accordingly, there will be a separate set of statutory timeframes for claims over $750,000.00 or claims for a latent condition or a time related cost.

The table, below, provides a practical summary of amendments to the statutory timeframes.

3.“Ambush” Claims

 

The third and final area of reform allows a respondent to include in its adjudication response all relevant reasons for withholding payment, whether the reasons were raised in the payment schedule or not. The claimant will be given a right of reply to the Adjudication Response.

A respondent cannot currently include in its adjudication response any reasons for withholding payment which were not included in its payment schedule. In practice, this has allowed claimants to make so-called “ambush” claims – the claimant has months to prepare a payment claim and adjudication application, whilst the respondent has just 10 business days to examine the claim and prepare a response which exhaustively states the reasons for default.

Practically, the statutory timeframes will no longer work in favour of claimants.

What does this mean for contractors and subcontractors?

 

It is important that you familiarise yourself with the amendments prior to September 2014 to protect your rights to lodge or respond to an adjudication application under BCIPA, and strengthen your prospects of success at adjudication.

If you wish to discuss anything in this article, or seek assistance as to how best to accommodate for these amendments in your contracts or otherwise, please do not hesitate to contact us. 

 

 

 

Pre-Amendment 

Post-Amendment 

Post-Amendment 

 

All Claims 

Claim < $750,000 

Claim  > $750,000.00 or claim for a latent condition / time related cost 

A. Payment Claim 

 

 

 

Time for claimant to make payment claim after construction work last carried out / related goods and services last supplied 

12 months 

6 months 

6 months

Time for claimant to make payment claim after construction work last carried out or related goods and services last supplied if payment claim is in relation to recovery of a final progress payment (including recovery of retention and/or return of security)

12 months 

The later of the period prescribed in the contract, or 28 days after expiry of defects liability period. If above alternatives are not applicable, within 6 months.

The later of the period prescribed in the contract, or 28 days after expiry of defects liability period. If above alternatives are not applicable within 6 months.

B. Payment Schedule 

 

 

 

Time for respondent to provide a payment schedule if progress payment served less than 91 days after reference date 

10 business days 

10 business days 

15 business days 

Time for respondent to provide a payment schedule if progress payment served more than 91 days after reference date 

10 business days 

10 business days 

30 business days 

C. Adjudication Application 

 

 

 

Time for claimant to serve adjudication application 

10 business days

 

10 business days

 

10 business days 

D. Adjudication Response 

 

 

 

Time for respondent to provide an adjudication response 

5 business days 

10 business days 

15 business days (+ adjudicator can grant up to an additional 15 days) 

 

Contacts

Troy Lewis, Partner
T: +61 7 3135 0614
E: troy.lewis@holdingredlich.com

Stephen Burton, Partner
T: +61 7 3135 0604
E: stephen.burton@holdingredlich.com

Disclaimer
The information in this publication is of a general nature and is not intended to address the circumstances of any particular individual or entity. Although we endeavour to provide accurate and timely information, we do not guarantee that the information in this publication is accurate at the date it is received or that it will continue to be accurate in the future. We are not responsible for the information of any source to which a link is provided or reference is made and exclude all liability in connection with use of these sources.

Follow us on Linkedin & Twitter

Holding Redlich Weekly Brief

To receive invitations to upcoming seminars and articles that may be of interest to you
please click here to subscribe to the Holding Redlich Weekly Brief.

Top

Holding Redlich © + Legal Notices + Site Map + Search + Contact Us +linkedin +twitter