The bill substantially adopts the payment regime proposed in the Reynolds-Vogel report by introducing a new Part I.1. This Part would create a trickle down obligation to pay promptly
Adjudication Process
The bill also adopts the quick interim adjudication recommendation of the Reynolds-Vogel Report by setting out default statutory rules for adjudicating certain disputes. This would see disputes resolved within 60 days. The highlights of this Part are:
•Parties may agree to commence adjudication proceedings for any disputes arising under the contract. However, the Bill specifically lists disputes about:-
a)The valuation of services or materials provided;
b)Payments/nonpayments under the contract, including those affecting the construction pyramid;
c)Amounts retained in fulfillment of set-off;
d)Nonpayment of holdback.
•Parties are free to determine the adjudication procedure in their contract as long as the adopted rules and procedures comply with those in the Bill;
• Bill 142 sets out a strict time line for the adjudication process:
a)The parties are required to agree on an adjudicator within four days of the delivery of the Notice of Adjudication. They cannot name an adjudicator at the time of entering into their contract.
b)If no agreement is reached the moving party shall notify the Authorized Nominating Authority, which shall, within 7 days, appoint one.
c)The party who gave the Notice of Adjudication must, within 5 days after the adjudicator agrees to hear the matter, deliver all the relevant documents relied on for the claim.
d)Generally, the adjudicator has 30 days within which to submit a written determination unless granted an extension, which shall be no more than 14 days.
•The determination by the adjudicator is final, and any resulting payments must be made within 10 days of the award.;
•Generally, parties cannot appeal the determination based on an error of law or fact. They may, however, appeal to have the determination set aside by a court of law if:
a)A party to the adjudication participated under legal incapacity.
b)The contract in question was invalid or had ceased to exist.
c)The adjudicator dealt with matters not subject of the adjudication.
d)There is a reasonable apprehension of bias on the part of the adjudicator.
e)The determination was made as a result of fraud.
•The award from the adjudication remains valid until a determination is made by the courts or the arbitrator.
Lien Rights
The bill also proposes some changes to the lien rights of parties to a contract
•Extension of the time frame within which to preserve a lien-right changed from 45 to 60 days;
•Extension of the timeframe within which to perfect liens from 45 to 90 days;
•If a matter is subject to both a lien and interim adjudication, then the time frame for the preservation of the lien is extended up to 45 days after the dispute is determined;
•Where a landlord with an interest in the improvement done on leased premises agrees to pay all or part of the cost of the improvement, such interest is subject to a lien up to 10% of the amount of the total payment.
4 BLawyerisH/July, 2017