Do changes to the Construction Contracts Act affect you?

Litigation

From 1 September 2016 the Construction Contracts Act will extend to new categories of construction professionals. This article provides information as to the changes and how they might affect you.

The Construction Contracts Act was changed significantly in 2015 but some of the reforms were staggered to come into effect over 2016 and 2017.

Previously, the Act generally only applied to physical construction work, however from 1 September 2016 design, engineering and quantity surveying will now fall within the definition of “construction work” under the Act.

This is significant as designers, engineers and quantity surveyors will now be subject to the provisions of the Act, including the prohibition on conditional payment provisions, the payment claim/payment schedule regime, and the fast track dispute resolution process, known as adjudication.

So what does this mean for you?

If you are a designer, engineer or quantity surveyor (or are contracting with these sorts of consultants) then it is critical that you are familiar with the payment provisions in the Construction Contracts Act, including the implications of the payment claim/payment schedule regime.

It is also important that your terms of engagement are updated to reflect the application of the Act.

If a dispute arises on a project then the adjudication process will be available to resolve the issues. Given the fast track nature of adjudication, it is important to be familiar with its operation and how it can be used effectively.

The sorts of matters that could be subject to adjudication include allegations of breaches of contract or disputes about whether a consultant has exercised all due care and skill, which can be very complex. We would therefore recommend seeking advice at an early stage if a dispute appears likely.

Please feel free to contact our Construction and Development experts for further information or advice on any of the matters referred to in this article.

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Copyright © Cavell Leitch. All rights reserved. Redistribution is only permitted with express written permission. For enquiries please contact us. This article by its nature cannot be comprehensive and cannot be relied on by clients as advice. It is provided to assist clients to identify legal issues on which they should seek legal advice. Please consult the professional staff of Cavell Leitch for advice specific to your situation.