The Queensland construction industry now has three months to get ready for the new BCIPA regime, following the changes to the payment claim and adjudication scheme in Chapter 3 of the Building Industry Fairness (Security of Payment) Act 2017 made this week.
The new regime will apply to payment claims made after its commencement, meaning that existing construction contracts will also be subject to it. As there are some significant changes being made to the existing process, including timeframes and the form and substance of payment claims, you will need to review all contracts and processes now to be ready for the start of the regime, which is currently planned for 17 December 2018.
What are the latest changes?
In the end, the amendments made to the new regime were few – the most important is to the time for responding to a payment claim, which is now the earlier of the time the contract says a payment schedule must be given or 15 Business Days (rather than 25 Business Days) after receipt of a payment claim. Some tweaks were also made to adjudicator training provisions.
The new BCIPA regime in brief
Many of the provisions from the existing BCIPA regime carry over, but there are important changes made to payment claims, payment schedules and the adjudication process which are aimed at reducing delays by respondents and streamlining the adjudication process.
Two of the more important changes are the removal of the requirement to endorse a payment claim as being made under the Act and the inclusion of an obligation to always provide a payment schedule (except for a reasonable excuse). That means that every payment claim which is served by a claimant must be responded to as required by the legislation and may be the subject of an adjudication application (unless the claim is paid in full on time).
The concept of standard and complex claims is retained, but:
- claimants are given a longer time to make an adjudication application;
- "second chance notices" (for the service of a payment schedule) are abolished. Where a payment schedule has not been served and the claimed amount has not been paid in full, an adjudication application can be made without any further notice, but a warning notice must be given before the commencement of court proceedings to recover the unpaid amount;
- the existing ability of a respondent to a complex claim to include new reasons in an adjudication response is removed; and
- the number and length of submissions for adjudication applications and responses may be limited by regulation.
Measures aimed at ensuring compliance with the legislation have been introduced, so financial penalties can be imposed for a failure to provide a payment schedule or pay an adjudicated amount. QBCC licence-holders also risk disciplinary action.
Getting ready for the BCIPA
By 17 December, you'll need to:
- be familiar with the changes being introduced and their impact on your operations;
- consider contract terms and processes to deal with the introduction of the PBA; and
- review processes in light of the changes to the payment claim and adjudication scheme – such as training your team to recognise and appropriately escalate a payment claim, and comply with timeframes.