Within the next 7 days, Ontario will unveil significant changes
to the Construction Lien Act, which have been more than
two years in the making. The Act, to be renamed the
Construction Act, will shift the focus of the legislation
from primarily being on security of payment, to an intended balance
between security of payment and efficient dispute resolution.
The new Act is expected to introduce prompt payment provisions,
which require an owner to pay a contractor within 28 days of
receipt of a proper invoice, and for a contractor to pay its
subcontractors within 7 days of receipt of funds from the
owner.
To give teeth to the prompt payment provisions, the new Act is
also expected to introduce “Adjudication” of disputes.
Adjudication, present in the UK, but largely unknown in the
North American construction industry, is intended to be a swift and
flexible dispute resolution mechanism. Procedurally, it will
bear some resemblance to an arbitration proceeding, though
