The Department of Public Expenditure and Reform published the Construction Contracts Act, 2013 on the 29th of July 2013. The Act is available to view at http://www.irishstatutebook.ie/eli/2013/act/34/enacted/en/html
On the 13th of April 2016 the Minister for Business and Employment signed the ‘Construction Contracts Act, 2013 (Appointed Day) Order 2016’ which gave legal effect to the provisions of the Act. The Order states that the ‘25th July, 2016 is appointed pursuant to section 12(2) of the Construction Contracts Act 2013 (No. 34 of 2013) and that Act shall apply in relation to construction contracts entered into after that date.’
The provisions of the Act have effect on all construction contracts, as defined in the Act and will apply to all construction contracts awarded after the 25th July 2016. The main provisions of the Act are:
• Payment: The Act requires that all construction contracts, as defined under the Act, shall provide for the amount of interim payment and amount of final payment or an adequate mechanism for determining those amounts. The Act also requires that that all construction contracts, as defined under the Act, shall provide for a payment claim date or an adequate mechanism for establishing the date for each amount due, and the period between payment claim date and the date the payment is due.
• Suspension: The Act confers on the executing party under all construction contracts, as defined by the Act, the right of suspension for failure by the other party to pay an amount due in full by the date on which the amount is due. In addition the executing party is conferred with the right to suspend for failure of the other party to pay, in full, an amount due pursuant to the decision of an Adjudicator.
• Adjudication: A party to a construction Contract, as defined under the Act, has the right to refer for adjudication any dispute relating to payment arising under the construction contract.
To reflect the provisions of the Act, amendments have been made to all the Public Works Contracts (versions 1 and 2), Schedules to the Contracts (versions 1 & 2), both Conditions of Engagement, Schedules to the Conditions of Engagement, and associated Guidance Notes.
The notable amendments to the documents include:
• Adoption of certain terms defined in the Act, such as ‘Payment Claim Date’ and ‘Payment Claim Notice’
• The change of units of measurement of time from ‘Working Days’ to ‘Days’ under all payment clauses to facilitate compliance with the Act.
• Amendment to the Suspension by the Contractor clause in PW-CF1 to PW-CF5 to comply with the Act.
• Introduction of statutory Adjudication as an alternative dispute resolution method and the effects a referral to statutory Adjudication has on the existing contractual dispute resolution methods.
• The removal from the Schedules the option for the Contracting Authority to specify payment periods other than ‘monthly’. (The only exception is PW-CF 6 & 7 where the extent of the Works may not extend beyond a single payment.)