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McDonald welcomes Construction Contracts Bill

3 May, 2012 - by Mary Lou McDonald TD

Sinn Féin Public Expenditure and Reform Spokesperson Mary McDonald TD this morning welcomed the introduction of the Construction Contracts Bill legislation to the Dáil noting it is time now to take this long awaited and desperately needed legislation home.

Deputy McDonald said:

“This legislation is long awaited and desperately needed. It has cross party support and indeed the support of the entire sector from general contractors, architects and civil engineers. However it’s time now to take this legislation home. Political parties need to now work together in amending the legislation to ensure the finished product is a robust mechanism that confronts the accepted practice of non-payment by big contractors in all its guises.

“The thresholds contained within the legislation are too high and are counterproductive. These thresholds do not reflect the type of monies involved for small sub-contractors when it comes to issues of non-payment.

“The legislation's failure to make adjudications binding in the event of arbitration is a real cause for concern. Adjudication is a low cost dispute resolution mechanism and is intended to deliver a result in a short time frame. The legislation as it stands undermines this objective. Arbitration and litigation are time consuming and when it comes to the courts years can go by with little result for sub-contractors.

“The legislation does not include a provision that deals with an instance where a payer fails to respond to a payment claim. When this occurs the amount to be paid should be the amount claimed. This will address the fundamental problem and also give the main contractor an incentive to respond to a payment claim.

“Issues are still outstanding with regards to suspension limits as currently set out in the legislation. The right to suspend work for non-payment cannot be time restricted and a limit of two weeks will not act as a sufficient deterrent for rogue employers. The legislation as it is written defeats the purpose of this provision. It is a completely unreasonable ask of sub-contractors to go back to work after two weeks still unpaid and left to incur further costs.

“The Mechanical and Electrical Contractors Association have estimated that in the case of the six largest construction companies that have gone out of business over the last number of years at least half a billion euro was left owing to sub-contractors.

“In response the association has called for the inclusion of a Trust Clause in the legislation to ring fence monies paid to a main contractor for monies owed to subcontractors. Trust provisions already exist in some of the standard forms of contract operating here in Ireland but are frequently struck out so on this basis a statutory trust provision would be required as applies under Canadian law.

“The scope of the Bill must also be broadened to include goods and products specially manufactured for a project. Products which are integrated into the fabric of buildings such as concrete block walls are irretrievable. Bituminous road materials are a perishable product which must be incorporated into works within hours of delivery. Suppliers of these goods and services need robust legislative protections against those who can’t or won’t pay.” ENDS

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