The Construction Lien Amendment Act was passed in December 2017 and substantively changed the Construction Lien Act, now the Construction Act (the “Act”). Its primary purposes were to: (i) modernize the existing Construction Lien Act; (ii) provide prompt payment legislation throughout Ontario; and (iii) introduce adjudication provisions for disputes arising in the course of a contract.
Adjudication
One of the most significant changes introduced in the Act is an adjudication regime to resolve disputes on construction projects as they arise in the course of the project, rather than at the end of a project.
Unlike typical litigation, or even arbitration, which usually are “after the fact” processes requiring parties to recreate the history, the new adjudication process is intended to achieve real time resolution of construction disputes at unprecedented speed. Therefore, members of Ontario’s construction industry, including owners, contractors and subcontractors, need to ensure they are well positioned to initiate and respond to claims under the tight timelines set out in the Act.
Which Contracts Are Subject to Adjudication?
Although certain provisions of the Act came into force in July 2018, the adjudication provisions will not come into effect until October 1, 2019. Importantly, even then, the adjudication provisions will only apply to construction contracts and subcontracts entered into on or after October 1, 2019.
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