Construction Contracts Bill 2010 - An Update

Author:Ms Susan Bryson
Profession:Mason Hayes & Curran
 
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Minister Brian Hayes passed the bill through the second stage of the Dáil on 3 May 2012. The bill has been passed without any amendments to the form which was introduced at first stage. The Minister has however indicated that he intends to introduce a number of committee stage amendments dealing with the following:

Thresholds

As currently drafted, the legislation only applies to private contracts in excess of €200,000 and public contracts in excess of €50,000. The Regulatory Impact Analysis identified that the majority of disputes adjudicated in the UK have a contract value of between €10,000 and €50,000. On that basis the Minister accepts that the thresholds imposed by the bill are too high. The Minister has indicated that the amendment will either reduce or remove these thresholds.

Supplies

The bill in its current form excludes all supply contracts (unless installation forms part of the contract). The Minister acknowledged that similar legislation in other jurisdictions does not exclude supply contracts. The Minister holds the view that the inclusion of all suppliers would result in an unduly onerous process which could create a barrier to entry for smaller enterprises. The Minister recognises the merit of including bespoke suppliers but is concerned that it may be difficult to define what is meant by bespoke suppliers. There does not appear to be a commitment at this stage to introduce an amendment to include suppliers.

Binding Adjudication

Section 6(12) of the bill is considered the biggest flaw in the bill. It provides that the award of the adjudicator will not be binding if referred to arbitration or other proceedings are issued. The explanation for this section (which is not contained in similar legislation in any other jurisdiction) is the need to protect the tax payer. It is recognised that as drafted, the bill favours the payer and there is a need to strike a balance between ensuring the efficient operation of the construction industry and the...

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