Proposed changes to Construction Contracts Act

On Thursday, 22 September 2016, the Construction Contracts Amendment Bill 2016 (WA) (the Bill) was introduced into Parliament.

The changes to the Construction Contracts Act 2004 (WA) have been proposed following an independent statutory review of the Act. The proposed amendments, amongst other things, seek to improve security of payment for subcontractors and make the adjudication process more flexible and accessible.

The Bill is part of a series of reforms aimed at improving the regime under the Act. In addition to the currently proposed amendments, Minister L’Estrange stated that there will be a second set of reforms to be introduced at a later stage and that “This legislation will also be complemented by a Code of Conduct for contractors and the establishment of a compliance unit within the Department of Commerce to monitor compliance with the code”.

Key amendments will include the following:

  • A significant increase from 28 days to 90 business days (effectively 124 days) in the time to apply for adjudication. Some adjudication applications concern complex issues and are not as straightforward as others. This amendment should provide applicants, even in complex matters, a reasonable time within which to prepare and lodge their applications once a dispute has arisen;
  • Reducing time for payment from 50 days to 30 business days (effectively 40 days). Contractors will receive monies owed pursuant to a construction contract about 10 days sooner than previously (if their construction contract contains payment terms greater than 30 business days);
  • The introduction of “claims recycling”. This process will allow for previous payment claims to be included in subsequent payment claims: a contractor need not worry if they have missed the first opportunity to adjudicate a disputed payment claim;
  • Changes to the process for enforcement of adjudication determinations. Currently, leave of the Court is required in order to enforce a determination as a judgment or order of the Court. The amendment seeks to have adjudication determinations made enforceable as an order of the Court simply upon the filing of a certified copy of the determination together with a supporting affidavit verifying that payment is due and owing.

For more information on the Bill and its progress through Parliament, please visit the WA Parliament’s website: