A new Ontario-wide campaign co-ordinated by the Council of Ontario Construction Associations (COCA) aims to raise awareness about prompt payment and adjudication and provides a guide to help contractors get paid on time.
The Prompt Payment and Adjudication Toolkit, an online resource centre, was launched recently.
“We believe the toolkit that we’ve put together is the most comprehensive toolkit for all different parties to construction contracts that there is available on the web for owners, for generals, for trade contractors and suppliers,” said COCA president Ian Cunningham. “It’s not to be the ultimate or the only guide or the most detailed guide, but it’s a primer, it’s a 101. It’s to get contractors and owners familiar so that they can get their own internal thinking and process lined up and that they are in a position to use these tools when there is a dispute over payment.”
Prompt payment and adjudication are processes provided under Ontario’s new Construction Act to help contractors to get paid on time. Prompt payment legislates mandatory timelines for payment and adjudication is a dispute resolution process that allows a contractor or subcontractor to enforce claims for payment in a more efficient and less expensive way than going through the court system.
“People who operate in this space need to have an understanding what the rules of the game are,” explained Ted Dreyer, COCA board member, lawyer and adjudicator. “People always had an obligation to pay promptly but they just never had to because there was never a way of holding their feet to the fire. Now with adjudication and prompt payment there is.
“We do want people to have tools in their toolkit, where they can bring these claims for payment forward promptly and get them dealt with in a way that is a lot cheaper and faster than court.”
The toolkit features downloadable documents with information for owners, contractors and subcontractors. Prompt Payment Adjudication 101 provides an overview of the act in layman’s terms and there is also information about holdbacks and proper invoicing. The page also has a prompt payment webinar and links to government resources.
The construction industry is plagued by payment delays but only a small number of contractors are using the tools provided under the Construction Act to get paid and most don’t even know about the new process, Cunningham noted.
“When the Construction Act came into force and when the prompt payment and adjudication provisions came into force, most construction associations had seminars and webinars and articles in their newsletters and there was a ton of stuff written by law firms about it,” Cunningham said. “There was a whole lot of stuff, but all of that notwithstanding we continued to get complaints about payment. There is still a very small number of adjudications that have been initiated since the start of ODACC (Ontario Dispute Adjudication for Construction Contracts).”
Both Dreyer and Cunningham said prompt payment and adjudication is not gaining traction for a number of reasons. There is some speculation that part of it is because of the COVID-19 pandemic and because a lot of projects were grandfathered in under the old rules.
Dreyer said members are still getting questions as many are unaware of the act.
“I still field a lot of calls,” said Dreyer. “Fifty per cent just know nothing about it. The other 50 per cent are aware of it but they are not as informed as they would like to be. It is complicated legislation, so how do we get people to sort of pay attention and how do we get them to move from, for example, a Tweet or a LinkedIn post and get them going to the website and in a way that makes it easy for them. “That’s the challenge because we used to send out a document that was about 100 pages long and I just don’t think it resonated with people, so we got it down to nine pages.”
Both Cunningham and Dreyer pointed out the website is intended to provide information and should not be considered legal advice. Those with questions should contact a lawyer.
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