The Construction Contracts Amendment Act 2015 is implementing a number of updates to the Construction Contracts Act 2002 ("the CCA"). The amendments are coming into force progressively between 1 December 2015 and 31 March 2017.
This article will set out the key changes and our analysis on them.
Summary of Key Changes
For all construction contracts arising after 1 December 2015:
Changes from 1 September 2016:
Changes from 31 March 2017:
The amendments do not have retrospective effect.
Our Comment
As is always intended under the CCA, the resolution of construction disputes should be speedy and have binding effect. The disputes resolution forum of the CCA is now given scope to determine matters beyond just payment disputes into issues of rights and obligations.
Parties can now seek a swift adjudication determination on traditionally more complex issues such as contractual interpretation, obligations for contractors to rectify defective work, whether work is within scope of variation, and so on.
Not all construction disputes are made equal. This one-size-fits-all approach under the amended CCA will likely pose challenges for the more complex disputes where more is at stake and where experts and insurers are involved. However, the upshot is that these amendments are much more consumer friendly and play out more favourably for smaller scale construction projects.
Looking Ahead
There will be issues with bringing and defending claims for professional designers, engineers and quantity surveyors under the CCA.
Statutory Trust Regime for Retention Moneys
This new regime will apply after 31 March 2017 for all commercial construction contracts regardless of the date the agreement was entered into.
The purpose of these amendments is to better protect retentions by preventing principals and contractors from using that retention money as working capital. But this regime may create a number of new problems:
Please kindly direct any enquiries to James Turner, Partner, and any member of the Albany Litigation Team.
See our Expertise pages
Construction and Property Disputes
© McVeagh Fleming 2017
This article is published for general information purposes only. Legal content in this article is necessarily of a general nature and should not be relied upon as legal advice. If you require specific legal advice in respect of any legal issue, you should always engage a lawyer to provide that advice.
The Construction Contracts Amendment Act 2015 is implementing a number of updates to the Construction Contracts Act 2002 ("the CCA"). The amendments are coming into force progressively between 1 December 2015 and 31 March 2017.
This article will set out the key changes and our analysis on them.
Summary of Key Changes
For all construction contracts arising after 1 December 2015:
Changes from 1 September 2016:
Changes from 31 March 2017:
The amendments do not have retrospective effect.
Our Comment
As is always intended under the CCA, the resolution of construction disputes should be speedy and have binding effect. The disputes resolution forum of the CCA is now given scope to determine matters beyond just payment disputes into issues of rights and obligations.
Parties can now seek a swift adjudication determination on traditionally more complex issues such as contractual interpretation, obligations for contractors to rectify defective work, whether work is within scope of variation, and so on.
Not all construction disputes are made equal. This one-size-fits-all approach under the amended CCA will likely pose challenges for the more complex disputes where more is at stake and where experts and insurers are involved. However, the upshot is that these amendments are much more consumer friendly and play out more favourably for smaller scale construction projects.
Looking Ahead
There will be issues with bringing and defending claims for professional designers, engineers and quantity surveyors under the CCA.
Statutory Trust Regime for Retention Moneys
This new regime will apply after 31 March 2017 for all commercial construction contracts regardless of the date the agreement was entered into.
The purpose of these amendments is to better protect retentions by preventing principals and contractors from using that retention money as working capital. But this regime may create a number of new problems:
Please kindly direct any enquiries to James Turner, Partner, and any member of the Albany Litigation Team.
See our Expertise pages
Construction and Property Disputes
© McVeagh Fleming 2017
This article is published for general information purposes only. Legal content in this article is necessarily of a general nature and should not be relied upon as legal advice. If you require specific legal advice in respect of any legal issue, you should always engage a lawyer to provide that advice.