UK Adjudicators Newsletter August 2021

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AUGUST 2021 NEWSLETTER
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EDITORS COMMENTS
The annual London conference takes place on
the 19 August 2021 and will be an online
conference with a physical networking and
drinks event in London in the evening at the
Middle Temple. Scan the QR code for more
information.
Our charity partner for the event is the Free
Representation Unit and we are looking for
donations of raffle prizes to assist them with
fundraising at the evening event.
With the country reopening after the lockdown
we hope to be able to arrange some physical
events in the last quarter of the year; if you
would like to host or take part in these please
do drop me an email.
As always please do forward articles, events
and worthy news for inclusion in forthcoming
newsletters.
Sean Gibbs LLB(Hons) LLM MICE FCIOB FRICS
FCIARB, is the Chief Executive Officer of
Hanscomb Intercontinental and is available to
sit as an arbitrator, adjudicator, mediator,
quantum expert and dispute board member.
sean.gibbs@hanscombintercontinental.co.uk

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SOP IN HONG KONG - PILOT
PROGRAMME FOR PUBLIC WORKS
CONTRACTS
As the old saying holds, cash-flow is the life
blood of the construction industry. To ensure
that cash-flow is protected, many jurisdictions
have introduced SOP regimes to regulate
payment practices and provide for rapid
adjudication of payment disputes. In our
experience, SOP regimes are usually
implemented via legislation.
The first jurisdiction to enact a SOP legislation
was the UK in 1998.1 The UK was followed by
other jurisdictions including various Australian
states, New Zealand, Singapore and Malaysia.
In Hong Kong, public discussion of SOP - related
issues goes back to 2001, when the
Construction Industry Review Committee
publicly proposed that SOP legislation be
enacted. A non- exhaustive history of further
developments relating to SOP in Hong Kong is
provided in Figure 1 below.
Figure 1 - Timeline of the development of a
security of payment legislation in Hong Kong
The Pilot Programme
In 2021, Hong Kong appears ready to
implement a SOP regime for public works
projects. This will take the form of a pilot
programme applying to public works contracts
and sub-contracts. To this end, the Hong Kong
Development Bureau has released a draft
Technical Circular titled “Implementation of
the Spirit of SOP in Public Works Contracts”.
This circular, if brought into effect, will
incorporate SOP provisions into public works
contracts and related sub-contracts.
The draft Circular indicates that the
contractual regime will apply to public works
contracts which go to tender during or after
the second half of 2021. The regime will apply
to contracts issued by the Hong Kong
Government only and will not cover contracts
issued by statutory bodies or corporations.

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The pilot programme is intended to pave the
way for the subsequent enactment of SOP
legislation in Hong Kong. Based on current
information, the final legislation is likely to
affect all public works construction contracts
(including contracts issued by specified
statutory/public bodies and corporations) for
procurement of construction work or related
goods and services. It is also likely that that the
legislation will apply to private sector
construction contracts with a value exceeding
HK$5 million (for works contracts) or HK$0.5
million (for supply of goods and services,
including professional services).
The initial limited deployment of a SOP regime
in Hong Kong on a contractual basis, restricted
to public sector activities, should provide the
Hong Kong Government and the industry with
an opportunity to test the regime and to
identify snags or ambiguities in parallel with
the development of the Security of Payment
legislation.
Contractors will need to understand the effect
of the new regime on their business, and
dedicate time and resources to ensure that
they comply with and effectively manage the
Security of Payment requirements.
The SOP Provisions
The Circular provides a set of provisions for
incorporation into the relevant public works
contracts. These provisions are known as the
“SOP Provisions” and are set out in an annex to
the Circular. The Circular further envisages that
the SOP Provisions will be incorporated into
the relevant public work contracts by
Additional or Special Conditions of Contract.
The SOP Provisions set out a mandatory
process for the administration and payment of
progress payment claims. The Provisions also
entitle the parties to the contract to refer any
payment dispute to adjudication to determine
the dispute on an interim basis.
The SOP Provisions include the following
elements:
· The main contractor is entitled to submit
a claim for a progress payment on or after the
“Reference Date” specified in the Contract.
The payment claim must state the amount
claimed and the works, goods and services to
which the claim relates.
· The employer is to serve a response to
the payment claim within 30 days of the main
contractor’s payment claim (or any shorter
period specified in the contract). The response
must state any amounts admitted as due, any
disputed amounts, any set-offs or withholdings
claimed (including the grounds on which any
such set- off is based), and the net amount
which the employer agrees to pay to the main
contractor.

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· Any amount admitted as due by the
employer in its payment response must be
paid within 60 days of the payment claim (or
any shorter period specified in the contract).
· If a payment dispute arises between the
main contractor and the employer, the main
contractor may refer that dispute to
adjudication within 28 days of the dispute
arising.
· The adjudicator will have 55 working days
from the date of his appointment (or any
longer period agreed by the parties) to decide
the payment dispute.
· The employer shall pay the amount
decided by the adjudicator within 30 days after
the adjudicator’s decision is delivered (unless
the adjudicator directs otherwise).
· If the employer fails to pay an admitted
or adjudicated amount by the due date, the
main contractor will be entitled to suspend or
reduce the rate of progress of its work.
The information included in the payment claim
and response will establish the scope of any
payment dispute that may later be referred to
adjudication. Therefore, the employer and
main contractors alike should ensure that the
required documentation is prepared with care
and include all necessary information –
mistakes at this stage will prejudice a party’s
position in any adjudication and could lead to
an unfavourable adjudication determination.
Mandantory Provisions For Inclusion In Sub-
Contracts Connected With Public Works
Contracts
The Circular also annexes “Mandatory Sub-
Contract Provisions” for incorporation into all
sub-contracts of any tier engaged under a
relevant public works contract. The Mandatory
Sub-Contract Provisions largely correspond to
the SOP Provisions, with some notable
differences which are described below.
Firstly, the Mandatory Sub-Contract Provisions
expressly provide that any conditional
payment provision (such as “pay when paid”)
included elsewhere in the sub-contract will be
unenforceable and of no effect. This provision
is not reflected in the SOP Provisions,
presumably on the basis that the Hong Kong
Government can ensure that no such
provisions are included in the main contract.
In addition, the Mandatory Sub-Contract
Provisions entitle sub-contractors of any tier to
require the employer to make direct payment
of any amount which has been adjudicated as
due from the main contractor (or a higher- tier
sub-contractor, as relevant) but which remains
unpaid. The mechanism is complex, but in
summary, requires the sub-contractor to make
a written declaration that all or part of the
adjudicated amount is due and remains

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unpaid, while the main contractor is given an
opportunity to provide documentary proof
showing the contrary. Where a direct payment
is made, the employer will be entitled to make
a corresponding deduction from amounts due
from the employer to the main contractor.
Importantly, if the main contractor can
demonstrate the sub-contractor was not paid
due to the insolvency of a higher-tier sub-
contractor, the employer will not make a direct
payment.
Main contractors should be alert to the
potential impact of the direct payment
provisions. To avoid liability to the employer,
the main contractor needs to police all tiers of
its sub-contracting chain and ensure that
payments are made as and when due.
The SOP Provisions impose an express
obligation on main contractors to take all
reasonable steps to ensure that the Mandatory
Subcontract Conditions are included in all
lower tiers of sub-contracts. Main contractors’
compliance with this requirement will be
monitored and failures to comply may result in
a downgrade of that contractor’s performance
rating - likely impacting upon that contractor’s
ability to win future public works contracts.
Adjudicator’s Powers To Make
Determinations On Time-Related Costs
In our experience, different jurisdictions have
approached the question of whether an
adjudicator should have the power to make
determinations on extensions of time (“EOT”)
and the related costs in different ways. The
treatment of EOTs and time-related costs will
be an important element in any SOP regime
implemented in Hong Kong. How has this been
addressed in the draft Circular?
The Circular says that the majority of the
industry stakeholders support a proposal by
which the adjudicator would be entitled to
make binding determinations as to time-
related costs forming part of a payment
dispute. In order to make that determination,
the adjudicator would also be empowered to
make non-binding determinations as to the
extension of time due for relevant delays.
Despite the adjudicator’s EOT determination
being non-binding, the claimant would still be
entitled to interim relief from liquidated
damages levied in respect of any period
covered by an adjudicator’s EOT
determination.
Getting Ready
The introduction of a SOP regime will be one of
the most significant reforms to the Hong Kong
construction industry in decades. Construction
industry participants will need to get up to

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speed on the legal, logistical and financial
implications of the SOP regime quickly and
efficiently. Decisions on resourcing, claim
management strategy and risk mitigation are
only some of the important issues affecting a
construction business which will need to be
thoughtfully addressed. Relatedly, the
implementation of SOP in Hong Kong will
unavoidably have its teething problems.
Uncertainties, ambiguities and unexpected
issues will be commonplace and require
careful management.
Ilan Freiman, Patrick Daley, Glenn Haley and
Horace Pang
SECURITY OF PAYMENT REFORM IN
WESTERN AUSTRALIA WHAT TO
EXPECT AND WHAT YOU WILL NEED
TO DO DIFFERENTLY
Following years of review and industry
discussion, the Parliament of Western
Australia has passed the Building and
Construction Industry (Security of Payment)
Act 2021 (WA) (SOP Act). In a move to a more
harmonised national approach, the SOP Act
will see Western Australia largely adopt the
East Coast Model, and, in particular, similar
legislation in New South Wales.
The SOP Act marks a drastic departure from
the Construction Contracts Act 2004 (WA)
(CCA), which will continue to apply to
construction contracts entered into before the
commencement of the SOP Act.
Payment Claims and the Introduction of
Payment Schedules
Critically, the SOP Act introduces a statutory
payment process that will operate
independently of the underlying construction

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contract. This process reduces the maximum
statutory time for payment, and is now
dependent on the parties' position in the
contracting chain. For example, unless the
contract prescribes an earlier date, payment
will be due within:
• 20 business days after a payment claim
is made by a head contractor to a
principal
• 25 business days after a payment claim
is made by a subcontractor
Payment claims may be made on or after the
last day of each month during the project
(unless the contract provides for earlier
timing), and can only (subject to any early date
in the contract) be made within six months
after the works subject to that claim were
carried out.
Payment claims for final payment can be made
after the later of the completion of all work
(within six months), the defects liability period
has expired (within 28 days) and the date
under the contract.
Unlike the CCA, the SOP Act does not permit
payment claims and "reverse" adjudications to
be made by principals to head contractors, or
head contractors to their subcontractors.
The SOP Act will also necessitate the use of
payment schedules for respondents who seek
to dispute any part of a payment claim. The
payment schedule must be in writing, and, if
the respondent seeks to certify less than the
claimed amount, it must identify the amount
to be paid and the reasons for disputing the
amounts within the payment claim.
While not mandatory, if a respondent fails to
provide a payment schedule within 15 business
days of receiving a payment claim, it will
become liable to pay the claimed amount on
the date for payment and will be barred from
providing a response to any future
adjudication application (subject to the further
opportunity addressed below).
Adjudicating Claims
If a respondent provides a payment schedule,
but has not paid the claimed amount in full or
the certified amount is less than the claimed
amount:
The claimant may make an application for
adjudication within 20 business days of
becoming entitled to make the application
The respondent will have 10 business days to
provide a response, which is limited to the
reasons provided in its payment schedule
The adjudicator must provide a determination
within 10 business days of receiving the
response
If a respondent does not provide a payment
schedule and has not paid the claimed amount
in full by the date of payment:

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The claimant must, if the claimant wishes to
adjudicate, within 20 business days of the date
for payment, provide the respondent with a
written notice of their intention to adjudicate
The respondent then has a "second chance" to
provide a payment schedule within five
business days of receipt of the notice (if the
respondent fails to provide a payment
schedule within the additional time, it will be
unable to file a response in any subsequent
adjudication)
The claimant may make an application for
adjudication, which must be within a further
20 business days
The adjudicator must provide a determination
within 10 business days of the response, or
within 10 business days of their appointment if
the respondent is not entitled to give a
response
Given the significant consequences of failing to
provide a timely payment schedule, or
providing a schedule that does not adequately
identify the respondent's reasons for
withholding sums, we anticipate that parties
receiving a payment claim will engage
substantial resources, sometimes including
legal advice, at the payment schedule stage.
This is to ensure that they will not be precluded
from substantiating their case should the
matter proceed to adjudication or court
proceedings.
Although this may result in increased costs for
a respondent, it is important to make the
distinction between reasons and evidence.
That is, a respondent only has to provide the
essence of its reasons for withholding payment
(including setoffs, e.g. for liquidated damages)
and not a fully particularised evidentiary
response. It will then be up to an adjudicator
to determine whether the reasons provided in
an adjudication response were sufficiently
present in a payment schedule. An
adjudicator's failure to consider reasons
present in the payment schedule, or,
alternatively, the consideration of reasons not
present in the payment schedule, may result in
a jurisdictional error.
Importantly for potential respondents, the SOP
Act does not allow respondents to raise, in an
adjudication, reasons for non-payment that
are outside the payment schedule (similarly,
claimants will be unable to raise new issues in
an adjudication application that were not
raised in the payment claim). This prohibition
extends to jurisdictional arguments, although
we note that even in the absence of an
adjudication response, an adjudicator must
still satisfy themselves that they have
jurisdiction to determine the application. As
well, the SOP Act does not afford adjudicators
the discretion to consider late adjudication
responses.

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Claimants, on the other hand, should be aware
of the overhaul in the adjudication process,
and the subsequent reduction in time from 90
business days to 20 business days for bringing
an adjudication application.
Recourse to the Courts
If a claimant makes a payment claim and the
respondent does not pay the claimed or
payment schedule amount in full, on or before
the date for payment, the claimant may, as an
alternative to seeking adjudication, recover
the unpaid portion as a debt due in a court of
competent jurisdiction. While claimants will
need to consider the likely length of time
required to obtain a court judgment in
deciding whether to adjudicate or take the
matter to court, East Coast experience is that
most claimants will seek summary judgment in
a court rather than run the risk of an
unsuccessful adjudication application.
Adjudication Review
The SOP Act replaces the claimant's right of
review to the State Administrative Tribunals
under the CCA with a limited right of review by
a senior adjudicator for certain types of
determinations. The parties will only have
recourse to this adjudication review process in
circumstances where:
The adjudicated amount is less than the
claimed amount and the difference exceeds
the minimum amount prescribed by the
regulations
The adjudicator determined that they did not
have jurisdiction to determine the application
and the claimed amount exceeds the minimum
amount prescribed by the regulations
The respondent has provided a payment
schedule and an adjudication response and the
adjudicated amount is more than the schedule
amount, and the amount of that difference
exceeds the minimum amount prescribed in
the regulations
Any review application must be made within
five business days after receipt of the
adjudicator's determination and will be
treated as an adjudication application anew.
The respondent will then have 10 business
days to respond to the review application, with
a determination on the review application to
be made within 10 business days of the
response.
Parties relying on immediate cash flow should
be aware that an adjudicated amount in
dispute must be paid into a trust account
before the respondent can make an
adjudication review application.

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Mining Exemption Narrowed
The "mining exemption", previously unique to
WA under the CCA, namely, the "fabricating, or
assembling items of plant used for extracting
or processing oil, natural gas or any derivative
of natural gas, or any mineral bearing or other
substance", will no longer apply. Given WA's
reliance on the energy and natural resources
industry, we anticipate this will result in more
payment disputes, previously precluded from
the ambit of the CCA, being adjudicated.
Unfair Time-based Notices
Adjudicators (including review adjudicators),
the court and arbitrators can now declare a
time-based notice provision within a
construction contract to be unfair. A notice-
based time bar provision of a construction
contract will be declared unfair and of no effect
if compliance with the provision in that
particular case is not reasonably possible or
would be unreasonably onerous. We
anticipate that the application of this provision
will be contentious given its uncertainty in any
given circumstance and the considerable scope
for a value judgment.
Retention to Be Held on Trust
In order to better protect contractors and
subcontractors further down the contracting
chain, the SOP Act introduces a trust scheme,
which requires that cash retention and security
be held on trust by the party to the contract
who retains the security.
The retention money trust must be established
within 10 business days after the parties enter
into the construction contract, and once in
place, parties will have limited recourse to
draw upon the trust amount. Failure to comply
with these requirements is an offence under
the SOP Act, and could result in a significant
fine.
Businesses will need to educate themselves on
the strict requirements of trust management
and accounting. This additional cost and
administrative burden will be at the trustee's
expense.
Other Considerations
The Building Commission and Building Services
Board now have broader powers to prevent
entities (including their officers) with a history
of insolvency, not paying adjudication debts or
engaging in "phoenixing" from registering as a
building contractor. As a result, entities and
their officers may be required to show cause as
to why they should be registered to perform
construction works.
Parties to adjudication are not entitled to claim
their legal costs incurred in the adjudication.
Previously, without express words to the
contrary, the payment provisions of a
construction contract did not survive

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termination. However, the SOP Act now
prescribes that a payment claim may be made
after the date of termination of the
construction contract.
Parties may only make a single adjudication
application for each payment claim. On that
basis, the SOP Act will further align Western
Australia with the East Coast Model in respect
of adjudication estoppel.
Key Takeaways
Some of the key takeaways are:
The SOP Act has introduced a statutory
payment regime that drastically alters parties'
rights to make payment claims and respond to
payment claims, and the timeframes for doing
both.
Parties should review their construction
contracts that will be governed by the SOP Act
for compliance with the new regime and
consider:
Whether changes to payment and notice
protocols are needed
Whether amendments are required to ensure
responses to payment claims meet the
requirements of a payment schedule under the
new Act
If other contractual risk management
strategies should be included in their
contracts.
Respondents to payment claims must provide
claimants with a payment schedule identifying
their reasons for withholding part or all of a
claimed amount, and they will be limited to
those reasons in any adjudication.
The SOP Act has further narrowed the
exceptions to the extent that considerably
more types of construction work will fall within
the ambit of security of payment legislation.
Time-based notices may be found to be unfair
and of no effect if they are unreasonably
onerous or not possible to comply with.
Cash retention and security in the vast majority
of construction contracts are required to be
held on trust. Failure to comply with this
requirement will result in significant fines and
penalties.
Gregory Steinepreis, Donna Charlesworth,
Robert O’Brien and Joseph Perkins

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CAN AN ADJUDICATOR GET PAID
WHERE THAT ADJUDICATOR
RESIGNS BEFORE REACHING A
DECISION?
The recent decision in Davies & Davies
Associates Ltd v Steve Ward Services (UK) Ltd
[2021] is the latest judgment concerning the
issue of adjudicator's fees (are they payable or
not?) where the adjudication process does not
result in an enforceable decision.
Background
In 2019-2020, Steve Ward Services (UK) Ltd
(SWS) carried out works at a restaurant called
Funky Brownz in Stanmore. Funky Brownz was
owned by Bhavishya Investment Ltd (BIL), of
which Ms Patel was the director and majority
shareholder at all material times.
Contract documents were drawn up but never
signed.
A dispute arose and two adjudications
followed under the Scheme for Construction
Contracts (England and Wales) Regulations
1998 as amended (the Scheme). The same
adjudicator was appointed in both, Nigel
Davies. Any fees due to Mr Davies as
Adjudicator were payable to the Claimant
company, Davies & Davies Associates Ltd
(D&D). Mr Davies' terms and conditions were
the same in both adjudications.
In the 2nd adjudication commenced by SWS
against BIL, following receipt of the Reply, Mr
Davies concluded that BIL was not a party to
the construction contract as it was actually
between SWS and Ms Patel. He therefore
resigned as adjudicator on the basis that he
had no jurisdiction.
Three days later, an invoice for Mr Davies' fees
in the 2nd adjudication was sent to SWS'
solicitors for £5,148 inclusive of VAT.
SWS refused to pay claiming that Mr Davies
had committed a repudiatory breach of his
contract of appointment as adjudicator - that
repudiation (it was argued) was accepted by
SWS, so that the adjudicator's terms and
conditions ceased to have effect. Additionally,
based on previous case law, fees were not due
to the adjudicator in any event.
D&D commenced these proceedings against
SWS to recover the unpaid fees.
Consideration by the TCC
The claim by D&D was successful with payment
in full of Mr Davies' fees ordered by the
Technology and Construction Court (TCC). The
key issues are set out below.

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Was there a threshold jurisdictional issue?
Paragraph 13 of the Scheme entitles the
adjudicator to investigate matters "necessary
to determine the dispute". On this point, the
TCC focused on the fact that, at the time when
the adjudicator resigned, there was no dispute
either as to the identity of the contracting
parties, or as to his jurisdiction.
Mr Roger Ter Haar QC, sitting as a Deputy High
Court Judge, concluded therefore that Mr
Davies' reasoning in deciding to resign on the
basis that he had no jurisdiction was
"erroneous", as "that was not an issue which
the parties had referred to him".
The effect of the adjudicator's Terms and
Conditions
Relevant provisions included a fee provision as
follows: "[i]n the event of the Adjudication
ceasing for any reason whatsoever prior to a
Decision being reached, a Fee Invoice will be
raised immediately and is due for payment
seven days after the date of the Invoice."
Additionally, Clause 1 stated: "The Parties
agree jointly and severally to pay the
Adjudicator’s fees and expenses as set out in
this Schedule. Save for any act of bad faith by
the Adjudicator, the Adjudicator shall also be
entitled to payment of his fees and expenses in
the event that the Decision is not delivered
and/or proves unenforceable."
The substance of the second sentence in
Clause 1 is often known as a "PC Harrington v
Systech clause" by reference to the Court of
Appeal decision in PC Harrington Contractors
Ltd v Systech International Ltd [2012] in which
Lord Dyson confirmed that, in the absence of
specific contrary provisions, an adjudicator will
not be entitled to payment where there is no
enforceable adjudication decision. In the same
decision, Lord Justice Davis expressly stated
that, in order to avoid this outcome,
adjudicators could include a term in their
appointment stipulating that they would still
be paid where a decision was not delivered
and/or enforceable.
Mr Davies confirmed to the TCC that he had
drafted Clause 1 specifically in the light of the
judgment of Lord Justice Davis.
The TCC was satisfied that by itself, Mr Davies's
resignation from his role as adjudicator was
not a breach of his engagement, as paragraph
9(1) of the Scheme permits the adjudicator to
resign at any time on giving notice to the
parties. It was argued on behalf of SWS that the
resignation was effectively "bad faith" (in that
it was contended that Mr Davies was "not
faithful to the bargain he had struck to act as
Adjudicator"). This was rejected by Mr Ter
Haar QC, sitting as a Deputy High Court Judge,
who was satisfied that Mr Davies had acted
with "diligence and honesty" in deciding to
resign - this did not amount to bad faith (which
would have disentitled him to payment).

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Unfair Contract Terms Act 1977 (UCTA)
It was also argued on behalf of SWS that
(viewed as contended for by Mr Davies) under
the adjudicator's terms and conditions, the
relevant clauses would be void under s3(2)(b)
of UCTA in that they allowed performance
substantially different from that contracted
for, unless it could be demonstrated they
satisfied the test of reasonableness.
As well as doubting that Clause 1 actually fell
within the ambit of s3 UCTA, the Judge held
that the contractual performance expected of
the adjudicator was clearly impacted by the
unfettered right to resign set out in paragraph
9(1) of the Scheme. To the extent relevant, in
any event, Clause 1 satisfied the
reasonableness test in UCTA as it was: drafted
in accordance with terms viewed as
commercially acceptable (in principle) by the
Court of Appeal; those terms are commonly
found in appointments of adjudicators; there
was no inequality of bargaining power; and the
terms were accepted twice by SWS, where
SWS was represented by solicitors experienced
in dealing with adjudications.
Greater certainty on adjudicators' fees
This decision will give considerable comfort to
adjudicators relying on the observations of
Lord Justice Davis in PC Harrington Contractors
Ltd v Systech in their contract drafting. Given
the prevalence of adjudication in construction
disputes, certainty on the question of
adjudicators' fees where there is no
enforceable decision benefits both parties and
adjudicators.
Ashley R Pigott and Cathy Moore

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WA PARLIAMENT PASSES THE
BUILDING AND CONSTRUCTION
INDUSTRY (SECURITY OF PAYMENT)
BILL 2021
The Western Australian Parliament passed the
Building and Construction (Security of
Payment) Bill 2021 (WA) (Bill). Once the Bill
receives Royal Assent and becomes an
operative Act, it will implement sweeping
changes to security of payment laws, bringing
Western Australia more in line with most other
Australian jurisdictions. Most notably, the
Construction Contracts Act 2004 (WA) (CCA)
will no longer apply to new construction
contracts.
History, commencement, and transition
The Bill aims to provide better payment
protections to contractors working in Western
Australia’s construction industry, with a view
to ensuring contractors get paid on time, every
time. It also implements a number of
recommendations from Adjunct Associate
Professor John Fiocco’s report to the
Government on security of payment reform in
Western Australia.
A draft exposure bill was released in June 2020.
A revised version of that bill was passed by the
Legislative Assembly on 10 November 2020 but
lapsed following prorogation of Parliament
prior to the State election.
The reforms have now come sharply back into
focus with the recent collapse of Pindan
triggering calls for the government to take
urgent action to protect subcontractors.
Having been passed by Parliament, the 2021
Bill is now awaiting Royal Assent. Following
Royal Assent, it will become an Act. The
operative provisions of the Act will commence
on dates to be proclaimed by the Western
Australian Government.[1] Different parts of
the Act may commence at different times.
Key changes
The Bill is substantially the same as the bill that
was considered by Parliament in 2020. We
summarise the key areas of reform below.
Progress payments and payment schedules
Parties that carry out or undertake to carry out
construction work, or to supply related goods
and services, will have a statutory right to
receive progress payments and to make a
payment claim every month (or more often if
provided for in the relevant contract). This is
consistent with the position in other states.

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The due dates for payment of progress
payments will vary depending on the parties
involved:
• principal to head contractor: due 20
business days after a payment claim is
made;
• principal to non-head contractor: due
25 business days after a payment claim
is made; and
• contractor to subcontractor: due 25
business days after a payment claim is
made.
For home building work, payment is due on the
date provided for in the contract or, if silent, 10
business days after a payment claim is made
(noting that the Act will not apply to residential
construction contracts for less than $500,000).
If the construction contract provides for a
shorter payment period in any of the above
scenarios, that period will apply.
A party must respond to a payment claim
within 15 business days after the payment
claim is made, unless an earlier time is
provided for by the contract. The payment
schedule must include reasons for not paying a
claimed amount.
Reforming the payment dispute adjudication
process
The adjudication process in this Bill is more
consistent with those in most other Australian
jurisdictions. The provisions are broadly similar
to that of the CCA, with some key differences,
including:
introducing a requirement to provide notice of
intention to apply for an adjudication where a
response to a payment claim is not provided;
shortening the time frame to bring an
adjudication application to 20 business days
following the payment claim and response
procedure (including provision of any notice of
intention to apply for an adjudication); and
providing a new review process.
Consistently with the CCA position:
respondents will have 10 business days to
respond to an application; and
the adjudicator will have 10 business days to
make their determination, unless a longer
period is agreed by the parties (up to a
maximum of 30 business days).

17 | P a g e
Regulating certain contract terms
The Bill introduces ‘unfair time bar’ provisions,
providing an arbitrator, adjudicator, court or
expert appointed by the parties with the
power to declare void any notice-based time
bar provision that it deems to be unfair.
‘Pay when paid’ provisions will continue to be
prohibited and have been expanded to include
specific provisions that are contingent or
dependent on the operation of another
contract.
Creating deemed trusts for retention money
This scheme aims to provide security for
builders, contractors, subcontractors and
suppliers if their immediate contractual
counterpart becomes insolvent. Retention
money trust accounts will be required for all
construction contracts that exceed the
prescribed retention money threshold. This
threshold will be prescribed by the regulations
which have yet to be drafted, but the exposure
draft indicated it would be $20,000.
Notably, the Bill does not introduce the
broader cascading statutory deemed trust
regime recommended by John Fiocco. The
broader regime would apply so that, whenever
a party receives payment under a construction
contract on account of work performed by
another party, the payment is deemed to be
held in trust for the benefit of the party who
performed the work. This is intended to
safeguard money owed to subcontractors in
the case of an insolvency by the head
contractor or the principal.
Enhancing the powers of the Building Services
Board
Through amending the Building Services
(Registration) Act 2011 (WA) and the Building
Services (Complaint Resolution and
Administration) Act 2011, the Bill provides the
Building Services Board with enhanced powers
to manage the commercial conduct and
behaviour of registered building services
providers.
Application of the Act
The Bill contemplates a broader application
than the CCA by narrowing the current ‘mining
exception’. When it is operative, the Act will
not apply to:
building contracts with homeowners worth
less than $500,000 (noted above);
contracts between employers and employees
for construction work or related goods and
services;
contracts requiring construction work to be
carried out as a condition of a loan agreement
with a financial institution;
contracts to the extent it forms part of a loan,
guarantee or insurance agreement with a

18 | P a g e
financial institution requiring the lending or
repayment of money;
contracts where the consideration payable for
construction works is not monetary
consideration;
contracts for drilling for or extracting minerals,
oil or natural gas;
contracts for constructing a shaft, pit or quarry,
or drilling, for the purposes of discovering or
extracting any mineral or other substance;
contracts to build watercraft; and
contracts involving works where a party fails to
hold a registration in contravention of the
Building Services (Registration) Act 2011.
Key takeaways
Parties should appropriately amend their
precedent contracts so they are ready once the
Act is operative, including to ensure payment
provisions align with the new arrangements.
They should also implement updated policies
and systems within their operations to ensure
compliance with the new legislation.
Corrs Chambers Westgarth -
Spencer Flay, Tom Mathews and
Brianna Dos Santos

19 | P a g e
UK ADJUDICATORS LONDON
ADJUDICATION & ARBITRATION
CONFERENCE – 19 AUGUST 2021
There is a great line up of speakers
from the United Kingdom, South
Africa and Hong Kong.
Scan the QR code for further
information and to see the
programme.

20 | P a g e
TCC COURT JUDGEMENTS
July
• Aviva Investors Ground Rent Group GP
Ltd & Anor v Shepherd Construction
Ltd [2021] EWHC 1921 (TCC) (09 July
2021)
• Bop-Me Ltd v Secretary of State for
Health and Social Care (Rev 1) [2021]
EWHC 1817 (TCC) (05 July 2021)
• Curtiss & Ors v Zurich Insurance Plc
(t/a Zurich Building Guarantee And
Zurich Municipal) & Anor [2021] EWHC
1999 (TCC) (16 July 2021)
• DR Jones Yeovil Ltd v Drayton
Beaumont Services Ltd [2021] EWHC
1971 (TCC) (19 July 2021)
• Good Law Project Ltd, R (On the
Application Of) v Minister for the
Cabinet Office [2021] EWHC 1937
(TCC) (09 July 2021)
• The Good Law Project Ltd, R (On the
Application Of) v Minister for the
Cabinet Office [2021] EWHC 2091
(TCC) (Hearing 23 July 2021)
• Jalla & Ors v Royal Dutch Shell Plc &
Ors [2021] EWHC 2118 (TCC) (20 July
2021)
• Jalla & Ors v Royal Dutch Shell Plc &
Ors [2021] EWHC 2121 (TCC) (21 July
2021)
• LSREF 3 Tiger Falkirk Ltd I S.a.r.l & Anor
v Paragon Building Consultancy
2021)
• Meher v K&K Real Estate Development
2021)
• Rogerson (t/a Cottesmore Hotel, Golf
and Country Club) v Eco Top Heat &
Power Ltd [2021] EWHC 1807
(TCC) (02 July 2021)
• Standard Life Assurance Ltd v Gleeds
(UK) (a firm) & Ors [2021] EWHC 2081
(TCC) (27 July 2021)
• Surrey County Council v Suez Recyling
And Recovery Surrey Ltd [2021] EWHC
2015 (TCC) (16 July 2021)
• Timberbrook Ltd v Grant Leisure
Group Ltd [2021] EWHC 1905
(TCC) (16 July 2021)
• Toppan Holdings Ltd & Anor v Simply
Construct (UK) LLP [2021] EWHC 2110
(TCC) (27 July 2021)

21 | P a g e
DRBF’S 20TH ANNUAL
INTERNATIONAL CONFERENCE AND
WORKSHOP
05-06 August: DRB Administration
& Practice Workshop: This workshop
will focus on DRBs that utilize non-binding
recommendations. REGISTER NOW!
12 August: DBs in MDB Financed
Contracts Workshop: This workshop will
cover the history, recent developments on new
bank programs and their effect on the Dispute
Board’s role. CPD Credit
Available. REGISTER NOW!
07-09 September: DRB
Administration & Practice
Workshop: This workshop will focus on
International and multinational practice that
utilize binding decisions. REGISTER NOW!
SAVE THE DATE!
DRBF 24th Annual Conference
6-8 October, Boston, Massachusetts (or virtual
options available). Registration opening soon.
19-21 October: Caltrans DRB/DRA
Training Workshop: This workshop is
required for prospective Caltrans DRB/DRA
member candidates. REGISTER TODAY!

22 | P a g e
FORTHCOMING EVENTS
Thursday, August 5, 2021 - 5:00 PM
SCL Networking Evening
London
Venue: The Yacht London, Upper Deck, Temple
Pier, Victoria Embankment, London WC2R 2PN
Full details in this flyer
For more info
Tuesday, September 7, 2021 - 9:00 AM
An Introduction to Disruption Claims
Speaker(s): David Coyne (Associate Director,
Blackrock) & Tom Andrews (Senior Associate,
Osborne Clarke)
For more info
2021 SCL IRELAND CONFERENCE
October 19th, 2021 11:00 AM to 1:15PM
REGISTER NOW
Opening by Arran Dowling-Hussey B.L
11.05-11.50 - 'Key issues in using
arbitration in construction insurance
disputes'.
Dr. Hamish Lal, Sian Mirchandani
QC and Roger Ter Haar QC
Moderated by: Darren Lehane S.C (Law
Library, Dublin)
11.50-12.35 - 'Where Next For Domestic
Construction Arbitration.'
John Trainor SC, Law Library, Dublin
and Nicola Dunleavy, partner Matheson,
Dublin.
Moderator: Jonathan Pawlowski
12.35 - 1.15pm - Closing speech
Gary Born
Moderated by: Susan Ahern B.L (Law
Library, Dublin)

23 | P a g e
SCL INTERNATIONAL CONFERENCE
2021
The Society of Construction Law 9th
International Conference has been postponed
till November 2021.
http://www.constructionlaw2021.com/scl21

UK Adjudicators Newsletter August 2021

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UK Adjudicators Newsletter August 2021