The construction industry can be a tough place to run a business. Confusing contracts, empty promises, bogus defect claims, and complex regulations.
We help engineering and construction businesses cut through the complexity.
At Kelso Lawyers, we speak your language. Our engineering and construction department is managed by our senior associate, Ashley Kelso, a trained mechatronics engineer, project manager, and member of Engineers Australia. Our team has firsthand business and project experience and we’re ready to provide practical strategic advice as well as legal support that caters specifically to your business.
Our Sydney-based construction lawyers will provide quality practical advice to protect your cash flow, manage your contracts, and resolve disputes efficiently.
Our aim is to save you time, money, and stress so that you can focus on growing your business.
Here are some of the common needs of engineering and construction businesses that Kelso Lawyers can help you with:
Quick affordable enforcement of your payment rights – Security of Payment Claims / Adjudication
It’s the age old problem. As the project approaches completion the contract comes out of the draw, payment claims start being rejected, and a bunch of questionable defect claims suddenly appear to justify non-payment.
We use the Security of Payment legislation (which exists in every State and Territory) to quickly enforce your right to payment. Payment disputes are resolved by Adjudication rather than litigation, so getting a result takes weeks rather than years.
How does it work?
The requirements and deadlines vary depending on the circumstances and where the work was done. However, a general outline of the Security of Payment Adjudication process is as follows:
- Claimant (e.g. subcontractor or contractor) serves Payment Claim on Respondent (e.g. contractor, head contractor, project owner).
Respondent serves Payment Schedule on Claimant specifying what parts of the Payment Claim they will pay and which parts they won’t, and why.
- Claimant files Adjudication Application with Authorised Nominating Authority (a body authorised under the Security of Payment legislation to appoint an adjudicator to decide the dispute). Adjudication Application consists of:
- Payment Claim
- Payment Schedule
- Submissions on fact and law
- Supporting evidence (statutory declarations about conversations and events on the project, photos of the work, the contract, correspondence between the parties etc)
- Respondent files and serves Adjudication Response (submissions and evidence).
- The adjudicator has the option to request further documents and submissions.
- The adjudicator must determine the Application by the statutory deadline (typically 10 business days after accepting the appointment as Adjudicator)
- Adjudicator’s decision cannot be appealed and can only be set aside on various narrow grounds such as fraud or jurisdictional error.
- Adjudicator’s decision doesn’t prevent the parties later litigating the claim, but it does require the amount decided by the Adjudicator to be paid to the Claimant in the interim.
- Adjudicator’s decision can be enforced – if necessary – by obtaining an Adjudication Certificate, filing it in court, and then using enforcement proceedings.
It is important to contact us quickly if you need to dispute payment for construction work (whether provision of goods or services). Tight deadlines apply and are strictly enforced. If you receive a Payment Schedule that you are unhappy with (or you serve a Payment Claim and get no response), contact us immediately so we can secure your right to payment.
Contract Management Advice – ‘can they do that?’
So much of the stress of managing a project is not knowing what your options really are. The biggest cause of construction disputes every year is people misinterpreting their rights under the contract.
Managing a project effectively, maximising your Variation and Extension of Time claims, defending claims and back charges, getting the retention funds, and avoiding time bars to claims requires understanding the contract.
Adding to this, some of the more oppressive terms of your contract may be unenforceable, or overridden by statute. You may actually be entitled to earlier payment, and a higher rate of interest on overdue invoices than what the contract says.
Practical legal and strategic advice is only an email or phone call away. Whether you want advice on your options, need your Payment Claim or Schedule reviewed, need a Notice of Dispute drafted, need your Variation or Extension of Time claim checked over, want to check your obligations under part of the contract, or need assistance negotiating with another party, we’re here to help.
We provide practical advice on your rights, and how to use them strategically to maximise the outcome for your business.
Contract Review – what you don’t know can hurt your business
We provide practical assistance with your contracts, whether it’s:
- A contract you’ve signed,
- A contract you want to negotiate, or
- Your own suite of standard contracts
One of the most common problems is that what people have signed and what they think they’ve agreed to are two different things. Another common problem is thinking that you are bound by, or can rely on, terms that are actually unenforceable.
If it’s a contract you’ve already signed, we can go through it, draw up a quick reference ‘cheat sheet’ for your contract administrator with tips to strengthen your claims, and identify any invalid terms and how to use them to your advantage.
It is critical to have a good understanding of the deadlines for claims under the contract, to know how to properly support those claims, and to know when more favourable payment terms are imposed by legislation.
If it’s a contract you want to negotiate, we’ll provide you with a quick reference guide to the key parts of the contract, flag any areas of concern and provide alternative clauses for use in negotiations, and provide additional advice and draft clauses to modify the contract to your benefit.
If it’s your own standard contract, it is important to revise it from time to time. This allows us to modify it to incorporate lessons learnt on past projects as your business grows, identify terms that may be void due to changes to the law (e.g. payment dates, interest rates, pay when paid provisions, unfair terms that might be caught by the Australian Consumer Law small business protections), and add additional protections to strengthen your position.
As always, with each situation we will tailor our advice to the needs of your business.
Commonly Asked Questions
Here are our most commonly asked questions and concerns to give you further insights into our processes, how we operate and how we can help in your specific situation.
How do I contact Kelso Lawyers, and what do I need to send?
The quickest way to get started is to email through to email@example.com and provide the following:
- A copy of the contract.
- Copies of any relevant letters, emails and documents.*
- A dot point summary of the events that have led to the payment dispute, or the issues that you want us to focus on in providing advice on your contract.
- Describe the outcome that you are after, and provide any other information that you think might be relevant.
- In your email, please explain what happened, the current situation and the outcome you need. We’ll respond via phone or email and advise on the next steps. We like to work quickly and get results for our clients.
In your email, please explain what happened, the current situation and the outcome you need. We’ll respond via phone or email and advise on the next steps. We like to work quickly and get results for our clients.
*If the documents are too large to attach to an email you may wish to share them with us via Dropbox link or other file sharing service.
At Kelso Lawyers, we understand that you have a business to run and you need to move quickly. We keep the paperwork to a minimum so that we can respond quickly to your needs and get the solution underway.
I need to get paid, but I don’t want to damage my business relationship with the customer or contractor
In most cases this concern is given too much weight. If the dispute is handled well it is actually likely to build the level of respect between the parties. Resolving disputes in a firm but reasonable manner demonstrates to others that you are a professional and established business.
It actually helps your reputation to show that you know your rights and obligations, you won’t delay projects with unreasonable disputes, and that you deal fairly and efficiently with other parties. This demonstrates to the industry that you can be relied on to handle larger and larger projects and to manage subcontractors and suppliers effectively.
Enforcing your payment rights is also an investment in the timely payment of your future payment claims and invoices. Remember that disputes also have a cost for the other party too. Enforcing your payment rights ensures that the most cost-effective option is for contractors and customers to pay you what you are owed, and to pay you on time. So while there is an upfront cost to enforce payment, it will save you time and money down the track with less time spent disputing claims and chasing payment.
Our aim is to support the growth of your business, and your reputation, in the long term.
I’m concerned about the cost of using a lawyer. What is the point if the legal fees exceed the invoices I’m chasing?
This is an understandable concern. We are often surprised at the fees that other firms charge. Often this is due to unreasonable billing targets that other firms place on their lawyers. It is unfortunate, as it doesn’t promote an outcome-focused, economical, approach to representing clients.
At Kelso Lawyers, we do things differently. We are about delivering real value and real outcomes. We want our clients to trust us, rely on us, and keep using us in the long term. We design our processes and our costs agreements with the aim of ensuring that our fees reflect (rather than undermine) the value that we deliver.
We are also very upfront with our clients. We will tell you if we think that a claim is not worth pursuing, or if there may be a more cost-effective way to resolve it. It is important to us that our advice accommodates the risks and goals of your business.
Will I need to go to court to enforce my payment rights?
As a general rule, the sooner you contact us about a dispute the more options you will have. Court is just one of those options. Other options may include:
- Alternative Dispute Resolution: Mediation, Conciliation, Arbitration, Binding or Non-Binding Expert Determination.
- Adjudication under the relevant Security of Payment legislation.
- Tribunal (e.g. NCAT, QCAT)
The first step will be to identify any dispute resolution clauses in your contract, and whether your claim is covered by the relevant Security of Payment statute in the State or Territory where your supplied the goods or services. Strict deadlines apply, so it is important to contact us quickly when a dispute arises.
Disputes tend to arise from a few sources on a project:
- Misunderstanding of the contract (very common)
- Miscommunication between parties
- Opportunism (claims relying on fear and misinformation about legal rights)
- Genuine disputes about the actions and legal rights of the parties
Most of the time, disputes can be resolved through negotiation and Adjudication. We will advise you every step of the way on which options provide the best balance of risk, cost, and time to suit your priorities.
The contract is unfair, but I had to sign it to get the job. Can you help me or am I stuck with it?
This is pretty common. It is also common for people to think that the contract is the entirety of their legal rights and liabilities. However, what most people don’t realise is that there are a whole range of legal rights which can modify a contract, overriding some terms, adding others, and restricting the use of certain contractual rights by the other party.
For example, you may be entitled to quicker payment, higher interest on overdue invoices, and protection from certain risks under the head contract being passed on to you. If you are a small business, you may have the benefit of ‘unfair terms’ protections under the Australian Consumer Law, which can invalidate parts of the contract put you at an unreasonable disadvantage. There are other legal restrictions which can prevent a party exercising certain rights under the contract, or require them to exercise them fairly – for example, this can affect liquidated damages, and extension of time. Finally, there may be certain terms that are implied in the contract by law, which can improve your position.
On top of that. Effective contract management, thorough documentation of the project, and strategic use of legal rights can do a lot to help deal with an unfair contract.
Contact our team today using the form below.