Gerry O’Sullivan (above) Vice Chairman of the Disputes Resolution Standing Committee at the Society of Chartered Surveyors Ireland says: “The SCSI welcomes the Construction Contracts Bill as it will outlaw the paid when paid defence, which has long been outlawed in the UK. This is the key reason main contractors will give for failure to pay, particularly where they have written standard forms of subcontract in place. The defence under those standard subcontractors is upheld by law. But it effectively destroys cash flow which is the life blood for any small SME in the industry.
“Of course the Society also welcomes the imposition of a standard payment procedure,” continues O’Sullivan. “The Society always recommends the use of standard contracts and subcontracts that spell out specific periods and times for payment, mean of establishing the proper valuation of works completed in accordance with agreements and proper timely notification of any counter charges. Once set procedures are in place, the parties should have recourse to a prompt means to enforce payment. Certificates under RIAI forms of contract are treated by the courts as tantamount to payment cheques. So extending the benefit to all should improve matters for those at the coalface of the construction industry. The major downside is that the current draft of the Bill appears to intend to place a limit on the contract value to which the Act will apply (though the published limit we understand will be amended) and seeks to distinguish between public and private clients. Neither option we believe is fair and reasonable as essentially it is making ‘large’ exceptions to the rule and treating some parties as more equal than others. Finally, the current draft of the Bill has not got an effective dispute resolution clause and until that matter is addressed the Bill will, in our view, be ineffectual as ultimately matters would still have to be resolved through the court,” concludes O’Sullivan.