Developers 1, subbies 0 | Comment

Tracking progress: What happened to the Construction Act review adjudication proposals
Mar-05	Jan-06
Consultation paper proposals	Analysis of responses - proposals to take forward subject to further consultation
Amend the scheme to allow stage payments to be made for off-site materials and work on them in advance of their arrival of site.	Not to be proposed as a change to the act. Better suited to guidance.
Parties to adjudication should bear their own costs, unless they agree after referral of the dispute that the adjudicator should decide liability for costs. This will ban clauses in contracts that require the referring party to pay his own and the other party’s costs, win or lose. The adjudicator should continue to decide liability for his fees.	Re-proposed.
Prohibit the use of trustee stakeholder accounts (which suspend the effect of adjudicators’ decisions pending litigation or arbitration) other than when the payee is insolvent.	Clauses providing for trustee stakeholder accounts to be invalid even when the payee is insolvent.
Provide the adjudicator with the right to overturn “final and conclusive” certificates and decisions where these are of substance to interim payments only.	Re-proposed.
Empower adjudicators to decide finally aspects of their jurisdiction, namely: is there a construction contract under sections 104 and 105? Was there a dispute? Was I properly appointed?	Not to be proposed as a change to the act. Better suited to guidance.
Entitle the adjudicator to payment when he stands down due to lack of jurisdiction.	Re-proposed.
Extend adjudicators’ immunity under the act to claims by third parties.	Not to be proposed as a change to the act. Better suited to guidance.
Require adjudicators to be independent (in addition to existing requirement of impartiality).	Not to be proposed as a change to the act. Better suited to guidance.

What happened to the Construction Act review payment payment proposals
Mar-05	Jan-06
Consultation paper proposals	Analysis of responses - proposals to take forward subject to further consultation
Amend section 110(1) of the act to require that payment mechanisms include terms on: what amounts constitute the payment; when a payment is to be assessed; how amounts are to be determined; the period of time that should elapse from the assessment date before the final date for payment; what information is to be communicated between the parties.	Amend section 110(1) to require a statement of what is due in a certificate issued by one of the contracting parties or a third party. Where the contract does not provide for certification of the sum due, it is determined by an application for payment from the payee.

Give the payee the right to submit a payment application at any time while obliging the payer to pay only that which is due under the contract.	Re-proposed.

Remove the requirement in section 110(2) of the act to serve a notice within five days of a payment becoming due.	Re-proposed.
Require all section 111 withholding notices to state the remaining amount that the payer intends to pay after withholding the amount notified.	It is not necessary to redefine the content of withholding notices under section 111.

Retain the exception to the ban on pay-when-paid clauses in cases of upstream insolvency.	Re-proposed.
Pay-when-certified clauses should require each upstream certificate to identify the subcontract works valued by the certificate and provide for each certificate to be copied to the payee.	Pay-when-certified clauses should be invalid (presumably not in the case of upstream insolvency). This may require primary legislation given the widespread use of pay-when-certified clauses. In the meantime there may value in guidance on when the courts would be likely to view the use of such clauses as an inadequate payment mechanism under the act.

Pay-what-certified clauses should require each upstream certificate to value each subcontract works package and provide for each certificate to be copied to the payee.	Pay-what-certified clauses should be banned under proposal 1.
Introduce a right to reimbursement for the costs of suspension and remobilisation and provide additional time for remobilisation under section 112 of the act.	Re-proposed.
Make contractual provisions on cross contract set-off ineffective except where there is a close relationship between the contracts concerned.	Not to be proposed as a change to the act. Better suited to guidance.
Amend the scheme to allow stage payments to be made for off-site materials and work on them in advance of their arrival of site.	Not to be proposed as a change to the act. Better suited to guidance.