Cecilia Keaveney (Fianna Fail)

I am not an expert in this field but my interest was peaked while sitting in the Chair earlier and I asked a few people I know to provide me with some information on it.

I congratulate Senator Quinn because he has come forward with a Bill which will be accepted in the fullness of time, perhaps in the form of a more detailed Bill.

I agree with Senator Alex White that the payment difficulties throughout the system are not exclusive to the construction industry. Many people in my constituency are experiencing significant difficulties in that they cannot fill the orders on their books because they cannot get the money for the raw materials as they were not paid for their last job.

That ties in to one of the issues that is pertinent currently, namely, the unwillingness of the banks to put money into the system and allow viable businesses continue in operation. I commend the Minister for Enterprise, Trade and Innovation, Deputy Batt O'Keeffe, for bringing in representatives of the banking industry today and yesterday to question the reason the money that was put into the system has not found its way down to small and medium enterprises. I know that is a slightly different issue but it is strongly related to the one under discussion.

We know that in good and bad times delayed and an acrimonious flow of cash through the construction supply chain is a major difficulty in the industry. It is leading to insolvencies and unemployment down through the supply chain. That is pertinent now with the banking sector in its current state and therefore the cash flow element is significant.

It is important to examine the example in the United Kingdom. This issue was tackled 15 years ago in the UK with the introduction of the strict provisions on payment in the construction industry. I understand that has been a major success and is one of the factors in minimising the effects of the recession in the construction industry in the UK.

In terms of what we do here, we talk about an island economy and all-island viewpoints on certain issues yet we do not have laws that are mutually reciprocal. That is one of the reasons this legislation is important at this time because there are many people in the construction industry here who have built in the North, and vice versa. The construction industry has become a 32 county Ireland industry. I am aware issues have arisen in Belfast with people who have built and others who were committed to buying but who did not buy. All of those issues highlight the importance of more transparency and unity in our approach to legislation, if it is good legislation. If there has been good practice in the UK, and it appears that is the case, it would be sensible in that context to ensure we move on this issue as fast as possible.

I understand the intention is that the Minister will come back to the House in five months with a Bill having had many negotiations in that time. That is important because whatever we do in terms of Government contracts and trying to stimulate the construction market it is important that everybody, down to the subcontractor, gets paid.

I understand the issue is based around getting payment for work done. I am told the solutions are based on banning the most obvious abuse, namely, pay when paid clauses; requiring contracts to have strict and fair payment provisions; and having enforceable prompt dispute resolution provisions, which is the issue of the adjudication. The Construction Contracts Bill addresses the second and third points and partly addresses the first point.

The adjudication aspect has been well tested in the UK in the past 12 years and it is said to be working well. It was introduced in the Housing Grants Construction and Regeneration Act 1996, with a similar Construction Contract Order 1997 extending the same provisions to the North. Recently the UK regime has been revised and strengthened. If that applies in the North and is good practice, it might be sensible to adopt an all-island version of it.

Adjudication provides for a dispute resolution process typically confined to no more than six weeks, in which a neutral construction professional will assess the claimant's claim and hear submissions from both sides. I understand the argument made earlier, that one cannot force both parties to be involved. Therefore, there may be difficulties with the process and it may not be as simple as it sounds. However, we must start somewhere. Usually, the adjudication is done without the need for an oral hearing, which keeps costs down. The adjudicator's decision is then temporarily binding on both parties. If the adjudicator finds that money is due from one party to the other, that money must be paid and is enforceable by way of summary judgment. Either party can then bring the matter to arbitration, which is a much lengthier and more costly process. In Great Britain and Northern Ireland, the majority of cases are settled after the adjudicator's decision.

It is suggested that it is important to keep the statute law that will be introduced in the Republic of Ireland in the same wording and layout as that used in the United Kingdom and Northern Ireland. Some 400 cases have been decided on adjudication in the United Kingdom over the past 15 years. Clearly, there is a great wealth of case law and if the Irish Act were to use the same wording, there would be much more certainty as to how the courts here might interpret it. Senator Quinn's Bill explicitly removes consumers and residential homes from the provisions of the Act. This is a welcome provision. I note the Act does not favour any particular section within construction, but discriminates against those who have shoddy and or unethical payment practices.

It is important debate on this issue is stimulated here. This is the start of an important process. People have asked why we are doing this now and why it is needed, because there is a wider picture. I suggest we need to review the wider picture I mentioned at the start of my contribution. If we are in a situation where bank lending stymies other sectors as well as construction we should, perhaps, look at the generality of people not getting paid for work done, which has a massive trickle down effect. I know from my constituents this has been an issue within the construction industry and this debate should lead to good legislation. We may already have good legislation to which we can refer and we can marry the two together. I wish the Minister and his officials well with bringing this legislation to a positive conclusion and look forward to seeing it before the House.