There is a vital need for the Construction Contracts Act to enter into force as quickly as possible which will bring much needed protection to building contractors.
Sub-contractors are a vital and often overlooked part of the construction industry. They are those small and medium enterprises (SMEs) in the construction industry providing such services as installing plumbing, tiling, windows or electricity. Since the financial and economic crash of 2008, thousands of sub-contractors working in the construction industry lost their jobs as a result of the actions of certain construction companies who either could not, or would not, pay them. It was distressing to see so many viable SMEs go under because they were left high and dry by property developers and construction companies who simply did not pay them for their work.
One of the difficulties within the construction industry is that when certain items such as plumbing, windows or electricity cables had been installed in a building, they cannot be legally removed even if such services and materials were not paid for. While large contractors or developers could sell off the entire property developments to pay off their debts, the sub-contractor they employed would often not see any payment at all.
Cash-flow for SMEs is of course vital and during recent years many smaller construction companies went under simply because larger construction companies/developers did not pay them for their work.
In 2010, I introduced the Construction Contracts Bill in to the Seanad in order to put an end to such unacceptable payment practices and with the wider aim of creating an improved business culture in the industry. Also, my Bill aimed to reduce the need to go to court to resolve these disputes, which has the effect of reducing the pressure on our already over-burdened courts system. In this respect, the legislation aimed to introduce a new adjudication mechanism where disputes can be resolved in a straightforward and less expensive manner. Indeed, I believe this model could have a much wider application in other areas of business in the country, especially in the SME sector.
In designing the legislation, I consulted with legal experts not only in Ireland but also internationally including New Zealand, Australia and the United Kingdom in order to distill their expertise to produce the best law possible. Not only was the law a concrete (no pun intended!) example of the work that the Seanad could do, real credit must also be given to the government for supporting the introduction of the law.
I was delighted to see the Bill enacted by the Government and signed into law by President Higgins over one year ago when it became law or an "Act".
However, the law has yet to have any effect, as while it has been signed and sealed, a "commencement date" needs to be set for it to enter into force. Therefore, the law is still not providing crucial protection to contractors for non-payment of the work that they have carried out. It is time for this act to now become law.