Reforms Proposed To Security Of Payment Act Regime For NSW

The NSW Department of Services, Technology & Administration has released a discussion paper setting out possible areas of reform for the regime applying to contractors claiming payment under the Building and Construction Industry Security of Payment Act 1999.

The changes proposed to the Act will have important implications for owners/principals and contractors alike. Some of the key reforms proposed in the discussion paper are set out below.

Submissions on the discussion paper and the issues it raises are due by 8 October 2010.

Exclusion of "predatory claiming practices"

One of the principal aims of the proposed reforms is to prevent what it describes as "predatory claiming practices". This label (applied to certain conduct on the part of some claimants) reflects the concerns of many involved in the construction industry that the Act is sometimes used in an aggressive or predatory manner.