Australia: Key changes announced to the Queensland Building and Construction Industry Payments Act

On 9 April 2014, the Queensland Government announced its intention to amend the Building and Construction Industry Payments Act 2004 (Qld) (BCIPA). The flagged amendments will implement some of the 49 recommendations made in a review of the BCIPA by prominent barrister Andrew Wallace, which was released at the same time.

The amendments have been identified to fall into three key areas of reform. In our view, the most important amendments are:

Key area 1: Adjudication process

• A single Adjudication Registry within the Queensland Building and Construction Commission (rather than the Authorised Nomination Authorities) will appoint adjudicators and monitor their performance.
• There will be an increase in the benchmark for skills and qualifications of adjudicators.

Key area 2: Timeframes for claimants and respondents

• For large/complex claims (defined as claims in excess of $750,000, for latent conditions or time related costs), a respondent will now have:
• • 15 business days for a payment schedule (and longer if there is a delay in submitting the claim)
  • 15 business days for an adjudication response (and longer if the adjudicator allows).
• Payment claims must be made within six months (rather than the previous 12 months) after construction work was last carried out, except:
• • if the contract provides a longer period
  • for recovery of a final progress payment, when the payment claim must be served as provided by the contract (or, if the contract does not so provide, within 28 days of the end of the defects liability period).

Key area 3: Provision of additional information

• A respondent can include reasons for withholding payment which were not raised in the payment schedule (subject to a claimant's right of reply).

We shall circulate a more detailed review of the proposed amendments and their practical implications over the coming months.

Information currently published on the Government's reforms is contained in the Government's fact sheet and more background information can be obtained from the Andrew Wallace Review.

It is currently proposed that the amendments will be legislated by 1 September 2014, affecting only contracts entered into from 2 September 2014 (although all adjudicators will be appointed by the Adjudication Registry from 2 September 2014).

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.