As the owner of various businesses in the construction industry, we have drafted and administered numerous contracts. We have seen first-hand and with our clients, the standard construction contracts and which clauses are not industry standard. We advise clients on clauses where they should negotiate a more restricted scope or clauses that need to be added to contracts.
With the increased use of design and construct building contracts, subcontractor are faced with increased risk, usually without an increased margin. We offer business risk reviews to advise potential risks areas and ways to mitigate risk. General business risks include legal structure risk, employee claims, insurance risk exposure and online fraud.
When an issue arises relating to non-payment of an invoice, clients need timely advice. There is usually cash flow pressure and most construction contracts require continued performance irrespective of delayed payment. We can advise on the best course of action and how to escalate the matter if required. When recovering debt, it is important to consider enforcement from the beginning. We obtain background information on the other party to ascertain the best enforcement method.
The Security of Payment Act provides a low cost, timely method of recovering unpaid invoices. However, the timeframes for responding and providing notices are very specific. If notices are provided too late or too early, this can mean that an Adjudicator cannot review the case. We build a relationship with our clients and their accounts receivable team. We advise them on setting up their accounts receivable system to ensure that the invoices being sent are compliant with the Security of Payment Act. If required, we can also prepare and submit adjudication applications.
Following an adjudication order, we will then advise on methods to enforce the adjudication order.
Adjudication and taking a matter to court is not the only way to resolve a dispute. Particularly if there is a prospect of an ongoing relationship with the other party. Informal settlement conferences and formal mediation provides the opportunity for a neutral third party to stand between the opposing parties and facilitate settlement discussions. In relation to informal settlement conferences, we can act as the third party. Having operated a building company, we are in a unique position to empathise with all parties and create a spirit of co-operation that is required to settle a dispute.
During an informal settlement conference, LPF will assist in identifying the strengths and weaknesses of each parties’ case and present potential pathways to resolve the dispute. If an agreement is reached, we can draw up a Deed of Settlement and Release, which will be a binding agreement. These are conducted on a confidential basis so that it does not affect any claims either party may have.
Mediation is generally a preliminary step in a court proceeding. The mediator is generally a senior lawyer or a retired judge. LPF can act on your behalf during mediation. We can assist in understanding the process and to discuss the pros and cons of any offers from the other party.
LPF are able to advise you on the most suitable standard form contract and customise it as necessary. Alternatively, we can design and draft custom contracts that are tailored to the industry, concerns about exposure, quality, time and cost.
In addition, we can assist in contract administration, provide advice on responding to defects, variations and extension of time/delays. Our network of consultants include building inspectors, insurance brokers, leak detection and rectification contractors and quantity surveyors.
We partner with various financial institutions to advise on obtaining business overdrafts, invoice financing and equipment finance.
Businesses in the construction industry generally involve large contract sums. There are numerous causes for project delays such as weather, errors on drawings, funding delays etc. These all place pressure on cash flow. When an unexpected issue such as a dispute about payment arises, businesses face even greater cash flow pressure. We recommend that every business maintain a certain percentage of their sales revenue in cash reserves. When this is not possible, it is important to have a business overdraft, an invoice financing and/or an equipment finance facility. We review your business and advise on which financial institutions to approach and how to present your business in a finance application.