Developments in relation to Ireland’s Construction Bill

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Developments in relation to Ireland’s Construction Bill

June, 2013
Robert Rooney

Progress on the Irish Construction Contracts Bill 2010 comes sporadically rather than consistently. When passed, it will likely attain a record for the longest period between introduction in the Oireachtas (parliament) and signature by the President. After almost twelve months where the Bill failed to advance, the government published its proposed amendments with just a week's notice before the relevant committee considered them.

The Government proposes that the Bill will now apply to construction contracts with a value in excess of €10,000. The original draft of the Bill differentiated between government and private contracts and had a number of differing financial thresholds. These differences and thresholds will be removed, with the exception of the new €10,000 threshold. One of the most significant amendments is that adjudication will be temporarily binding, as in the UK. The initial draft proposed that an adjudicator's decision would not be binding if the dispute was referred to arbitration or litigation.

The Bill originally sought to outlaw "pay-when-paid" clauses. It is now proposed to water down this protection to allow a kind of "pay-if-certified" clause at Section 3(5). This is an unfortunate development which is perhaps an inadvertent result of the drafting of an unrelated amendment. There are strong hopes that this will be clarified at a future stage.

The Bill also contains requirements for a paying party, who intends to pay less than the amount claimed by the claiming party, to provide a notice to the claiming party setting out its intention to pay less, and the reasons for doing so - a "pay less notice" of sorts. However, the amendments do not provide a remedy where the paying party fails to provide a "pay less notice", meaning that this section of the Bill will be largely ineffective. A suggestion that a contractor's right to suspend for non-mpayment would be limited to a two week period has been removed, but the current draft suggests that a suspension would have to be lifted on issue of a notice of adjudication.

The government amendments show a real intent to legislate for an effective payment regime. The devil, as always, is in the detail and the drafting of these amendments has, unfortunately, opened ambiguities. One hopes that those ambiguities will be resolved at Report stage.

The Dáil committee's considerations were interrupted by a clash with business in the main chamber, meaning that we will have to wait several more weeks for the Bill to clear committee stage. Patience, it seems, is the most valuable of virtues for followers of the Construction Contracts Bill.

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