BCIPA The new rules of engagement Matt Bradbury, Partner IPWEAQ SW - - PowerPoint PPT Presentation

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 the Building 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 is

enforceable as a judgment debt

BCIPA: One way traffic

Principal

Head Contractor

Subcontractor Subcontractor Subcontractor Subcontractor

Current procedure for recovery of the claimed amount

Thecontractor makes a paymentclaim Theprincipalsubmits a paymentschedule 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 last carried 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

• r time related cost)

Later of period under the contract or within 12 months after work last carried out Later of period under the contract or within 6 months after work last carried out Later of period under the contract or within 6 months of work last carried out Earlier of period under the contract or within 10 Business Days after payment claim served Earlier of period under the contract or within 10 Business Days after payment claim served Earlier of period under the contract

• r within 15 Business Days after

payment claim served, if the payment claim was served >90 days after entitlement to do so (reference date). If the payment claim was served >91 days after the reference date, 30 Business Days after this service

Service of the payment schedule (by Respondent)

Adjudication application lodged (by Claimant with Authorised Nominating Authority who appoints adjudicator)

Later of 5 Business Days after adjudication application received or 2 Business Days after Adjudicator’s Acceptance received

Adjudication response served (by respondent to adjudicator and claimant) Adjudication application lodged (by Claimant with QBCC who appoints adjudicateor)

Later of 10 Business Days after adjudication application received or 7 Business Days after Adjudicator’s Acceptance received Later of 15 Business Days after adjudication application received or 13 Business Days after Adjudicator’s Acceptance received

Adjudication Decision 10 Business Days after the adjudicator receives response or longer if agreed by both parties 10 Business Days after the adjudicator receives response or longer if agreed by both parties 15 Business Days after the adjudicator receives response or longer if agreed by both parties or adjudicator extends by a further 10 Business Days if only one party agrees

Current legislation Proposed legislation

500 1000 Decisions Released Year

QueenslandStatistics

Decisions Released

Queensland Statistics

Year Decisions Released 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 383

decisions 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 Previous Year 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 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 for consideration

• 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, adjudication applications and adjudication responses are not validly served if served on superintendent

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 included in the payment schedule – assess whether there are contractual options available that can run concurrently with the statutory process

Contact

Matt Bradbury Partner T +61 7 3233 8972 E mbradbury@mccullough.com.au

Disclaimer: This presentation covers legal and technical issues in a general way. It is not designed to express opinions on specific

• cases. This presentation is intended for information purposes only and should not be regarded as legal advice. Further advice should be
• btained before taking action on any issue dealt with in this presentation.