Peter Fitzpatrick (Louth, Fine Gael)

I welcome the opportunity to discuss this Bill, which was introduced following the demise of the property industry and with its resulting casualties. Quite often these casualties were not just the larger, well-known companies, but the smaller contractors which had neither the resources nor the capital to sustain the loses they were ultimately to endure.

This Bill will predominantly address the problem of non-payment in a balanced manner that would avoid imposing unnecessary regulatory or cost burdens on parties in dispute, the State or others. It will neither impose a cost or risk exposure on the Exchequer or taxpayer by requiring the State to support unpaid businesses or to underwrite their risk of non-payment nor reverse the considerable reforms achieved for the Exchequer in public sector construction procurement, particularly the reformed contracts and terms of engagement for public sector construction projects introduced just a few years ago. The Construction Contracts Bill 2010 was introduced by Senator Feargal Quinn and passed Committee and Remaining Stages in the Seanad on 8 March 2011. The Bill now before that Dáil was developed after several months of work with the Attorney General while keeping in close contact with the Senator.

The purpose of the Bill is to help address the issue of non-payment to construction sector contractors and subcontractors which have completed work on construction projects. The Bill achieves this through providing statutory arrangements for payments under construction contracts, including providing for interim payments. That will reduce a payee's exposure to non-payment. The Bill will also introduce a new mechanism for the swift resolution of payment disputes through a process of adjudication.

The Bill provides for a new statutory right to interim, periodic or stage payments, making clear when the payments become due, their amount and a final date for payment. There would also be a new statutory right for a payee to suspend performance where a "sum due" is not paid by the final date for payment; the prohibition of arrangements that make entitlement to payment conditional on certain events, such as "pay when paid" clauses, which delay payments until the payer has, in turn been paid; and a statutory right for parties to a construction contract to refer payment disputes to adjudication. There would also be a new adjudication procedure to deal quickly with disputes about payments and to result in a binding decision, under which payment, if any, must be made to the party named in the decision. An adjudicator would be selected on an agreed basis, by the parties to a contract, or else to be appointed from a panel to be set up by the Minister. These aspects of the Bill are particularly important and far-reaching, offering a platform for dispute resolution and a mechanism to prevent the escalation of construction and building-related disputes.

During my work I have personally encountered numerous builders, contractors and subcontractors who have come upon great financial and not to be underestimated personal crises as a result of the construction decline. From Laytown to Drogheda, Ardee and my home town of Dundalk, I have spoken with and met copious amounts of small contractors in payment disputes. Perhaps I am in an elevated position to assess and uncover the problem having in a former role run a business that was indirectly related to the construction sector. Perhaps that is why I am continually meeting people who wish to share their difficulties with me. Perhaps my previous role allows me to fully understand the pain and anguish that people are suffering, as I have experienced it myself.

This Bill is not the complete solution and it may be too late for some in the construction sector. However, this Bill is proactive, far-reaching, and most of all, it is a step in the right direction and will provide a channel for the much maligned small contractor to seek recompense. The programme for Government commits to introduce new legislation to protect all small building subcontractors that have been denied payments from bigger companies; this Bill addresses that issue and I have no hesitation commending it to this House.

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