The Queensland Government have announced a number of proposed changes to the Building and Construction Industry Payments Act 2004. The main changes are focused on the adjudication process, timeframes in which progress claims can be made and opportunities for respondents to provide reasons for withholding payment. These changes are not in effect, however, will commence on a date to be proclaimed.
Currently, if a claimant proceeds to adjudication, the claimant selects an Authorised Nominating Authority (ANA) who then refers the matter to an adjudicator. However, these changes will replace the ANA with the Queensland Building and Construction Commission who will appoint adjudicators based on their knowledge and experience.
Timeframes from claimants and respondents
The timeframe in which a payment claim can be served has reduced from 12 months to 6 months. This means that a claimant can only serve a payment claim within 6 months of when the last works were carried out in respect to the construction contract (unless the contract provides a longer period).
The changes have introduced a dual model regime which allows respondents more time to respond if it is a large or complex claim (defined as claims more than $750,000). If it is a large or complex claim, the respondent will have 15 business days to provide a payment schedule in response to the payment claim. Note that for all other claims the respondent has 10 business days to respond which is currently the timeframe set out under the Act for all payment claims. These timeframes will be extended to 30 business days if the claim for a progress payment is served more than 91 days after the reference date.
For an adjudication response, a respondent will have 10 business days instead of 5 business days to respond. If it is a large or complex claim the respondent has up to 15 business days to provide an adjudication response and may be granted an additional 15 days if the adjudicator allows.
Additional opportunity for respondents to provide reasons for withholding payment
Currently, a respondent can only provide reasons for withholding payment in the payment schedule and may not raise any new reasons in the adjudication response. Under these reforms, the respondent will be allowed to include reasons for withholding payment in an adjudicator response which were not raised in the payment schedule. Subject to this, a claimant will have a right of reply however, the time in which a claimant has to respond to the new reasons raised is yet to be provided.
How will contracts be affected?
If the contract was entered into before 1 September 2014 then these changes will not apply and the contract will continue to be regulated under the current provisions. These changes will only affect contracts entered into after this date.
Any adjudication applications made on or after 1 September 2014 will be appointed by the Adjudication Registry within the Queensland Building and Construction Commission, rather than the Authorised Nominating Authority.
Our Solicitors at CTI Lawyers will be able to assist you and your staff in understanding the proposed amendments to the Act. You can contact CTI Lawyers on (02) 9744 1099 or email your enquiry to [email protected].