Written answers

Tuesday, 4 October 2011

Department of Justice, Equality and Defence

Proposed Legislation

8:00 pm

Photo of Michael McGrathMichael McGrath (Cork South Central, Fianna Fail)
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Question 264: To ask the Minister for Public Expenditure and Reform if, in the context of the Construction Contracts Bill, his views that the outcome of the adjudication process should be binding; and if he will consider an amendment to the Bill in that regard. [26958/11]

Photo of Michael McGrathMichael McGrath (Cork South Central, Fianna Fail)
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Question 265: To ask the Minister for Public Expenditure and Reform if, in the context of the Construction Contracts Bill, he will review the provision concerning the time restriction attached to the right to suspend work for non-payment; and if he will make a statement on the matter. [26960/11]

Photo of Brendan HowlinBrendan Howlin (Wexford, Labour)
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I propose to take Questions Nos. 264 and 265 together.

The Programme for Government contains a commitment to introduce new legislation to protect small building subcontractors that have been denied payments from bigger companies. In addition, you may be aware that the Construction Contracts Bill 2010 was introduced by Senator Feargal Quinn and passed Committee and remaining stages in the Seanad on 8 March 2011. It is now before the Dáil.

My colleague Minister of State Mr Brian Hayes has been working with Senator Quinn to develop the Bill into a robust piece of legislation. In this regard, Minister Hayes and Senator Quinn met relevant stakeholders and opposition spokespersons on 28 June 2011. This consultation highlighted a number of matters relating to the Bill that required further consideration. These have been taken into account now in the Regulatory Impact Assessment (RIA) on the Bill which was completed recently and published on 27 September. The Report is available in my Departments website: www.per.gov.ie/reports . I understand that a note on this issue was circulated to all Oireachtas members last week.

The RIA examined issues relating to payment practices in the construction sector and assessed the need for legislative intervention. It found that legislation is desirable to improve payment practices and to allow swift resolution of payment disputes by way of adjudication, allowing projects to be completed without wasting time and money in litigation. In addition, the RIA examined the main proposals to amend the Bill that were raised during the Seanad debate and subsequent consultation. It found that there were merits to considering amending the Bill in a number of respects e.g. to bring lower value contracts within its scope and to make the adjudicators award binding in payment dispute cases. It concluded that any such amendments should be formulated in such a manner that would protect the taxpayer.

In addition to the issues dealt with in the RIA, Minister Hayes has asked the relevant officials to re-examine other issues raised during the consultation, including the time limit on suspension, to see if a more effective solution can be formulated in such a manner that would protect the taxpayer.

Minister Hayes will reflect on the findings of the RIA and incorporate them into the legislative proposals which will be brought to Government shortly for approval. It is essential that the solution to this issue needs to be balanced so as to avoid imposing regulatory or cost burdens on parties in dispute, the State or others.

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