12 Sep 2014

BCIPA - amending legislation has been passed, so start preparing for the new regime

The Bill to overhaul the Queensland Building and Construction Industry Payments Act 2004 has returned to Parliament and has been passed, though with a number of amendments made to the original Bill that was tabled on first reading.

The Bill had been expected to be passed and in force by now, but it was delayed for further public consultation by way of a Parliamentary Committee. That process resulted in the Committee supporting the passage of the Bill but making 18 recommendations for amendment, only some of which have been incorporated into the Bill in its final form.

Adjudication: the Bill maintains the establishment of a single adjudication registry administered by the QBCC which is responsible for the appointment of adjudicators. This is perhaps the most controversial aspect of the Bill as it sees the abolition of the role of authorised nominating authorities.

Contracts covered by the amended Act: the QBCC's appointing role and other functions start at the commencement of the amended Act (to be fixed by Proclamation), but the other revised processes of the Act (discussed below) only apply to contracts entered into after the commencement of the amended Act.

Standard vs complex claims: the Bill as passed retains the original Bill's creation of two types of payment claim – standard and complex – with different timeframes applying to each, but simplifies the meaning of complex claims to only those which claim more than $750,000 (exclusive of GST) and does not require a claimant to state in its payment claim whether the claim is standard or complex.

Timeframes: the Bill makes only two changes to the different timeframes and processes for complex claims that were laid out in the original Bill. Now, a claimant must tell the adjudicator if it intends giving a claimant's reply to new reasons in a payment schedule. There is also an effort to clarify when an adjudicator must deliver a decision.

Second chances for payment schedules: the Bill removes an anomaly in the original Bill that, even where a payment schedule is given in response to a payment claim, a respondent must be given a second chance to serve a payment schedule before court proceedings can be started to recover an unpaid scheduled amount.

Policy-making powers of the QBCC: the Board of the QBCC will be able to make policy governing the administration of the Act, including the establishment of criteria and a set of principles for the ranking and appointment of adjudicators.

What's not happening (yet)

The recommendation of the Committee that the amending legislation empower adjudicators to direct the release of securities and retention moneys has been deferred for further investigation and possible future amendment of the Act. The possible establishment of a statutory retention trust fund has also been deferred.

What you should do now

As the Act is expected to commence by the end of the year, it's important that you start looking at your own internal processes to be sure they will comply with the new regime.

For claimants, this means understanding not just the new timeframes and processes, but also the crucial new distinction between standard and complex payment claims. Although they won't need to determine this themselves by stating it in their payment claims, they will still need to take into account the different consequences for each type of claim.

As for respondents, they cannot assume that the longer timeframes will absolve them of the responsibility to deal promptly and properly with payment claims – because they won't.

Claimants, respondents and adjudicators will also need to keep watching developments in this area, as finer details are to be set out in regulations, which will be made soon. We'll keep you posted.

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Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this communication. Persons listed may not be admitted in all States and Territories.