Embed Size (px)
Citation preview
BCIPA
“The new rules of engagement”
Matt Bradbury, Partner
IPWEAQ SW Branch Conference
16 May 2014
Hierarchical nature of contracts
Principal
Contractor
Principal’s Representative/Superintendent
‘This is a payment claim pursuant to theBuilding and Construction Industry
Payments Act 2004’.
The magic words
Rationale for the introduction of BCIPA
• State government view
• Hierarchical chain of contracts
• Cash flow
• Adjudicator’s determination isenforceable as a judgmentdebt
BCIPA: One way traffic
Principal
Head Contractor
Subcontractor Subcontractor Subcontractor Subcontractor
Current procedure for recovery of the claimedamount
The contractor makes a payment claim
The principal submits a payment schedule
Adjudication application
Adjudication response
Adjudication determination
Key changes proposed
• QBCC not Authorised Nominating Authorities will:
– administer the Act
– monitor performance
– appoint adjudicators
• Timeframes
– payment claim can only be served within 6 months after the construction work was lastcarried out or related goods and services provided (not 12 months as is current)
– unless contract provides otherwise (i.e. to reflect DLP)
• Introduction of complex claims model
– claims greater than $750,000
– claims for latent conditions
– claims for time related costs
– additional timeframes provided
Key changes proposed cont…
• Ability to include additional information in adjudication response
• Change in the definition of business day
– Increased blackout period
– 3 business days before Christmas and up to 10 business days after New Year’s day
Service of the payment claim (by Claimant)
Standard claims(estimated 85% of
claims)Current legislation
Large or complex claims($750K or latent condition
or time related cost)
Later of period under thecontract or within 12
months after work lastcarried out
Later of period underthe contract or within 6months after work last
carried out
Later of period underthe contract or within 6months of work last
carried out
Earlier of period underthe contract or within 10
Business Days afterpayment claim served
Earlier of period underthe contract or within 10
Business Days afterpayment claim served
Earlier of period under the contractor within 15 Business Days after
payment claim served, if thepayment claim was served >90 daysafter entitlement to do so (reference
date). If the payment claim wasserved >91 days after the referencedate, 30 Business Days after this
service
Service of the payment schedule (by Respondent)
Adjudication application lodged (byClaimant with Authorised
Nominating Authority who appointsadjudicator)
Later of 5 Business Daysafter adjudication applicationreceived or 2 Business Daysafter Adjudicator’s Acceptance
received
Adjudication response served (by respondent to adjudicator and claimant)
Adjudication application lodged (byClaimant with QBCC who appoints
adjudicateor)
Later of 10 Business Daysafter adjudication applicationreceived or 7 Business Daysafter Adjudicator’s Acceptance
received
Later of 15 Business Daysafter adjudication application
received or 13 BusinessDays after Adjudicator’s
Acceptance received
Adjudication Decision
10 Business Days after the adjudicatorreceives response or longer ifagreed by both parties
10 Business Days after the adjudicatorreceives response or longer ifagreed by both parties
15 Business Days after the adjudicatorreceives response or longer ifagreed by both parties oradjudicator extendsby a further10 Business Days if only oneparty agrees
Current legislation Proposed legislation
0
500
1000
Dec
isio
ns
Rel
ease
d
Year
Queensland Statistics
DecisionsReleased
Queensland Statistics
Year DecisionsReleased
FY 04/05 32
FY 05/06 289
FY 06/07 467
FY 07/08 529
FY 08/09 999
FY 09/10 887
FY 10/11 674
FY 11/12 731
FY 12/13 721
GFC
Queensland Statistics – year to date
• 1 July 2013 to date – 555 adjudication applications were lodged, with 383decisions being released
• 1 July 2013 to date – average adjudication fee charged is $5,649
• Minimum adjudication (decision) - $460
• Maximum claim – circa $700,000,000
– WICET
Applications by region
Region MTD YTD YTD PreviousYear
Brisbane 32 285 333
Cairns 3 30 35
Gold Coast 4 49 53
Mackay 2 40 55
Maryborough 1 11 6
Rockhampton 6 42 43
Sunshine Coast 2 28 20
Toowoomba 8 35 29
Townsville 0 35 43
Claimant statistics
Claimant statistics MTD YTD YTD Prev Year
Consultant 3 29 20
Head Contractor 2 5 39
Contractor 12 119 119
Subcontractor 38 365 383
Supplier 3 36 56
Common traps
• Superintendent’s response – contract v BCIPA
– clause 42 AS2124 – payment certificate
– section 18 – payment schedule
– no payment schedule = DCM
Tips when dealing with BCIPA
• Administrative procedures
– ensure that staff handling invoices are aware of the Act (accounts, receptionists,project managers)
– have invoices with the BCIPA endorsement referred to a nominated individual forconsideration
• Registered office
– payment claims can be served on a registered office
– could be at company’s accountant
Tips when dealing with BCIPA
• Principal’s representative/superintendent
– ensure that superintendent is aware of the Act and implications
– remember though that payment claims, payment schedules, adjudicationapplications and adjudication responses are not validly served if served onsuperintendent
Tips when dealing with BCIPA
• Act immediately
– tight time frames
– may need to engage experts to assess the payment claim
– preparation of a well drafted payment schedule can resolve the dispute
– review the payment claim to ensure it has been validly made
– cannot include new matters in the adjudication response that were not includedin the payment schedule
– assess whether there are contractual options available that can run concurrentlywith the statutory process
Contact
Matt Bradbury
Partner
T +61 7 3233 8972
Disclaimer: This presentation covers legal and technical issues in a general way. It is not designed to express opinions on specificcases. This presentation is intended for information purposes only and should not be regarded as legal advice. Further advice should beobtained before taking action on any issue dealt with in this presentation.
