Security of Payment for contractors in WA – change coming for the construction industry

After being passed by the Legislative Assembly, on 26 May 2021 the Building and Construction Industry (Security of Payment) Bill 2021 was introduced to the Legislative Council for final review.   The Bill is expected to pass through Parliament this year and come into effect.  

The Bill is a reform of the existing Construction Contracts Act 2004 (WA).  It will make the WA security of payment laws more consistent with other Australian states and territories, and adopt some of the best practice recommendations from the Commonwealth Government’s 2017 national review.  

The Bill is not intended to have retrospective effect, so there will be a transitional period between the old system and the new amendments.  Contractors should not assume they are covered by the new system.

Among other things, the Bill includes measures such as:  

• increasing the statutory protections available to contractors and shortening the time for payment of contractor claims.  Contracting parties will need to be aware of these changes when drafting their contracts, and 'payers' should be aware of the shortened timeframes for voicing disputes and providing associated details;
• an adjudication review process (in essence, an appeal process) that was not previously available outside of the court system;
• protecting retention money in the event of insolvency through a deemed trust scheme that applies across the contracting chain; and
• expanding the powers of the Board to take action against building service providers who fail to pay court and adjudication debts, and to exclude those with a history of financial failure from holding a registration.

For more information on how these changes may affect you, or if you require any assistance, please contact Dominique Engelter of our office.