Monday 23 October 2017

Bill to enforce ethos of 'pay now, argue later'

Laura Noonan

Laura Noonan

The new Construction Contracts Bill working its way through the Senate would have a major impact on how the industry's disputes are handled, according to legal firm William Fry.

The new laws would lay down a framework for any issues on payments outstanding to be resolved within just 42 days, even if the dispute takes longer to settle.

"This could arguably save companies from going out of business," said William Fry partner Owen O'Sullivan, pointing out that the shortest disputes take between three and six months to be resolved in the Commercial Court.

Fellow partner Jarleth Heneghan said the 'pay now, argue later' principle was already being used to good effect in the UK and was likely to be "welcomed" in Ireland.

"As things stand, companies can withhold payment as a bartering tool with a view to facilitating a settlement," said Mr Heneghan.

"Adjunction (the legal term for 'pay now, argue later') gets behind that."

The lawyers said the new rules, which will be compulsory, could benefit the company that's being forced to pay up and the company that gets its money in a timely manner.

Mr Heneghan said that while he couldn't be precise on when the new rules would kick in, there was a "considerable head of steam" behind the laws.

The move to 'pay now, argue later' comes amid a surge in the volume of business disputes going to mediation instead of litigation.

Irish Independent

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