Liam Twomey (Fine Gael)

It is interesting to ask ourselves why this Bill is an issue now and why it has not cropped up in the past. Subcontractors have been telling me horror stories for years. I refer to the case of a subcontractor who informed me he walked off the site of a development where he was working because he was not being paid properly. This was several years ago when things were still relatively good. Next, he found that a former employee, who had initially started working on the same project with him, took up the job of finishing off that project. One wonders whether the former employee believed he would be treated any differently than his former employer by that developer. Such sharp practice has been going on for years.

However, sometimes when it comes to the world of business there are two sides to every story. All too often, one person's sharp practice is another person's practical business solution. I recall hearing a story years ago of a leading retailer which ordered a significant number of dinner sets for a promotion. When the promotion was not going well, the contract was re-examined by the retailer and, on the basis of that re-examination, the retailer was able to get out of the contract following a measurement of the plates provided for the promotion. That retailer is now one of the largest in the country and the company providing the plates went broke. Sometimes, that is the way business unfolds. I recall when my father was involved in business in the 1980s. He had to set a new precedent in retention of title law when a liquidator refused to pay him for products he supplied to a factory. The case went as far as the High Court. The liquidator was at no loss one way or another. However, if we had lost the case my father's business would have gone broke. It has always been very difficult to be involved in business in this country.

We must question why we are discussing such legislation now. Basically, the reason is billions of euro have evaporated from the value of property and property development in the country. I am unsure whether we can do much about the fact that a project has gone bankrupt. I do not believe certain firms will be able to pay anyone. Certain banks will not be paid because properties have gone into NAMA. Certain developers will not get paid and, unfortunately, certain subcontractors will not be paid.

There is a role for such legislation and when we, as legislators, are exposed to it we should take it on board. One cannot legislate for trust. Unfortunately, this is frequently the problem with many such cases; there is a breakdown of trust. One strong point in the legislation is the idea of adjudication and how we can make adjudication work between contractors and subcontractors. The key point is that it is faster and cheaper. The Minister of State appears to dispute this but I believe he is well-informed on legislation in the UK, where they have overcome many of these problems with regard to the costs involved and ways around legislation that would have occurred in other jurisdictions. This could be a very useful process in examining how the adjudication process works. Litigation is not a solution for many subcontractors, even at this time. Many contractors have very loose contracts. The prospect of legal costs means it is often easier for a subcontractor to write off his or her losses than to pursue a solution through the courts. A good and tight adjudication process might allow subcontractors to secure proper payments from principal contractors.

We must also consider matters from the perspective of contractors. During the construction boom the vast majority of contractors were reasonable with their subcontractors. The purpose in using subcontractors is often to avoid the legal obligations involved in employing people in the normal way. A certain amount of sharp practice is always to be expected in this regard. There is no doubt that many smaller subcontractors were abused by bigger contractors who were able to play off smaller firms against each other. One cannot legislate for something like this, as it is simply the way business works. What we need are supports for smaller subcontractors in order that they will not be ripped off in the future. The Minister of State should give a lead in this regard.

This is good and necessary legislation. I understand the Minister of State's opinion that it may run into problems when it is the subject of wider consultation. However, the principle of the legislation is excellent. In particular, adjudication and how it could work in this jurisdiction to resolve conflicts between contractors and subcontractors is something we should examine carefully. We should deal with that issue in five months time. By that time I hope the Minister of State will have overcome some of the other problems to which he referred.

Some of our difficulties arise from the fact that billions of euro have evaporated from the value of property. There is no way around this problem. Whether in good or recessionary times, it is very hard to legislate for those who play foot-loose and fancy free with their employees or subcontractors.