The amendments to the Building and Construction Industry
Payments Act 2004 (which took effect on 15 December 2014) were
intended to provide contractors with an extended Christmas
"cease fire" period to address subcontractor ambush
claims, and extra time to respond to subcontractor claims over
On first reading, contractors may have thought that these
amendments automatically afford them some respite from BCIPA claims
during the industry's annual Christmas shutdown. However, a
closer look at the amendments shows that the respite is only
available to contractors who have made the requisite changes to
In particular, contractors should keep in mind the
Avoiding end of year ambush claims
Firstly, if your subcontract does not expressly adopt the
definition of "business day" from BCIPA, it will not have
the benefit of the Christmas "cease fire period" which
now extends from 22 December to 10 January, each year.
Get more time to respond to large claims
Secondly, where a subcontractor lodges a complex payment claim
(ie one over $750,000), the time for a contractor to lodge a
payment schedule can be as long as either:
15 business days, if the claim was served 90 days or less after
the reference date, or
30 business days, if the claim was served more than 90 days
after the reference date.
However, if your subcontract provides that you must lodge a
payment schedule within 10 business days (and the odds are that it
does), then you will be obliged to act within that limited
The BCIPA amendments can make a contractor's life easier by
relaxing the timeframes for response to certain subcontractor
claims. However, those relaxations are only likely
to be available if your subcontract contains the necessary
During the course of the year, you will be letting subcontracts
under which the work will extend over the next Christmas period.
The necessary amendments will need to be made at the time you enter
into the subcontract. With the appropriate subcontract wording, you
will be able to enjoy the Christmas break without having to worry
about subcontractor ambush claims.
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.
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