Construction update – SOPA legislation an essential service

Apr 20, 2020

As the construction industry sees out the current project cycle before a (hopefully short) hiatus, we are seeing a spike in the use of security of payment legislation to secure much needed cash flow.

Adjudication of claims – which have always been performed from an acceptable social distance – continue. And the security of payment regime seems to be unaffected by the Court closures that have hampered other commercial recovery proceedings.

The County Court, admirably rising to the occasion, is triaging cases that are appropriate for determination on written evidence and submissions. Where short oral hearings are necessary, they are proceeding by video conferencing.

This should encourage an overall quicker determination process and help parties to save costs associated with oral hearings and submissions.

What does that mean for you right now?

Well, along with the usual pitfalls of the security of payment legislation, there are a few questions that businesses should be asking themselves right now:

  • Am I ready to respond to an upcoming payment claim or schedule? (In Victoria you have 10 business days to respond to a payment claim, or less if your contract requires it)
  • If my contract doesn’t allow notice by email, am I regularly monitoring my nominated address (or fax number) for receiving notices such as progress claims?
  • Do the notice provisions of my building contract need to be updated?
  • Do I have ready access to building experts to assist with adjudication applications or responses?

These are all time sensitive questions and preparation will be key to ensuring that you can respond on time, and ensure that cash continues to flow in the right direction.