News » Update on the Construction Contracts Act 2013 2016-02-15

The Construction Contracts Act 2013 was enacted by the Oireachtas on 29 July 2013. It is now over two years since the passing of the Act, not to mention the years preceding the passing of the Act from the date of its initial proposal by Senator Fergal Quinn and Sean Gallagher, yet the Minister still has to sign the order bringing the Act into effect.

Prior to the dissolution of the last Dail the Minister, Ged Nash TD, was asked what the status of the Act was. He advised that the panel of adjudicators under the Act was formed and the Code of Practice was with the Attorney General and that it would be commenced soon. Given that a new government will be formed after the next election, it can only be hoped that this comes to pass.

The panel was formed but this was not without problems at the outset. The Public Appointment Service put a restriction in the application documentation such that a member of the panel would not be permitted to represent parties at an adjudication where another member of the panel was the chairperson of the adjudication. A number of parties objected to this inclusion and these concerns were taken on board. However, it is noted that the Public Appointment Service merely removed the restriction at the end of the process and did not actually readvertise for the panel with the restriction omitted.

Once the operative date of the Act is announced, it is expected that there will be a minimum of a 3-month lead in period, but this could be significantly longer. During this period it will be essential that all parties to construction contracts amend their contracts to take account of the new payment and dispute resolution provisions under the Act.

In addition it will be necessary for contractors, employers and consultants to familiarise themselves with the payment and adjudication provisions of the Act and make provision within their organisations for the matters arising under it. This may seem to be an easy task; however, it is my view from discussions with various parties that a significant number of organisations fail to appreciate the significant implications the provisions of the Act potentially has for their day to day operations. There is a document entitled 'Fail to Prepare, Prepare to Fail' in the publications section of my website, anyone who doubts the implications of the commencement of this Act ought to look over this document as a starting point. There are courses being run on this act and more courses are due to be announced, large organisations should at least send their senior staff to one of these courses, or perhaps run some in-house training.

I expect that given the expense and effort that has been expended on this Act to date, that the Minister will announce an operative date in the near future. If anyone has any queries relating to the Act there are plenty of articles available online and the Act itself is quite a straightforward piece of legislation; however, with respect to the Act itself, on first glance it appears quite straightforward but on closer examination there are many tricky aspects to its provisions and interested parties would be well advised to attend some sort of training or obtain legal advice on the provisions.