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Construction Contract Act to Modify Irish Construction Industry

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Construction Contract Act to Modify Irish Construction Industry

July 15
15:35 2016

ConstructioncontractsactresizedSenator Paudie Coffey spoke with the workers of leading construction businesses from Waterford earlier in the week.  Senator Coffey was influential in the debut of the newly accomplished Construction Contract Act over the last five years. The Act will finally come into full effect starting on July 25th.

The primary benefit of the legislation is that it regularises cash-flow for companies as it sets out time-frames for repayments. In addition, it provides for rapid resolution for disputes between stakeholders within the industry working on projects.

CIF Director of Specialist Contracting, Sean Downey, said:

“The construction industry will benefit greatly from the introduction of the Construction Contracts Act. Waterford construction companies are some of the biggest in the sector and these will benefit greatly from the introduction of this act. Many CIF members are keen to learn exactly how it will impact their day to day work.

The Act will be of benefit to the entire supply chain, bringing more certainty and efficiency to dispute resolution and prompt payment. Companies can now plan and budget accordingly, allowing them to invest in future projects. The new rules will also reduce the amount of time and expense wasted on costly disputes. Days lost to disputes on projects between companies are too many and this has a negative impact on the reputation of the entire industry.

Ultimately, this will all have a positive impact on competitiveness within the industry, job creation, and future planning of Ireland’s infrastructural needs. This really is a significant time for our industry, and I would like to personally thank Senator Coffey, Senator Ged Nash, Willie Penrose, Fergal Quinn and the late Brian Lenihan for their hard work in creating this new piece of legislation and following it through over the past seven years.”

The event was held in Waterford IT and hosted by the Construction Industry Federation (CIF) for a select number of employees from three local companies; Suir Engineering, Winthrop and Specialist Technical Services Ltd. The CIF will be running a series of briefings and training programmes for members over the coming months.

Senator Coffey, a former Minister of State at the Department of the Environment, with special responsibility for Housing, Planning and Coordination of the Construction 2020 Strategy told the audience:

“This act has the potential to be transformative for the construction industry. This act aims to regularise the relationship between parties and will facilitate a robust sustainable construction sector that will meet the needs of our growing economy and increased housing and commercial demand. This brings certainty in terms of payment between contractors and sub-contractors and will mean more effective planning and costing for construction companies and the public and private sector organisations executing projects. From July 25th the conditions of this act will apply in construction contracts and this will, I hope, provide a platform for sustainable growth in this critical domestic industry. I would like to acknowledge the role played by the CIF in supporting this act and promoting it amongst its membership.”

New minimum contractual provisions concerning payment arrangements between the parties to a construction contract will benefit a large majority of those companies in the industry. Where payment disputes do arise between the parties to a construction contract, either party will have the right to refer the payment dispute for adjudication, which will be concluded within a set timeframe. The Chairperson of the Ministerial Panel of Adjudicators will appoint an adjudicator where the parties cannot agree on same.

The Government recently appointed Dr Nael Bunni as Chairperson of the Panel of Adjudicators last year and subsequently appointed a panel of adjudicators in December 2015. These trained individuals will engage with all parties in a dispute, reducing legal costs and expensive delays in construction. Most recently, Minister of State for Employment and Small Business, Pat Breen, released a Code of Practice for Adjudicators on the panel.

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