Law Times

Page 6 June 12, 2017 • Law Times www.lawtimesnews.com COMMENT Construction lien act changes good progress BY IAN HARVEY T he Ontario government seems to have nailed the right approach in its proposed changes to the Construction Lien Act. Bill 142 has entered the legislative pro- cess and will ultimately rename the CLA as the Construction Act and it's been well received. The need for change is real. Late pay- ment is a perennial problem in the con- struction sector. Between 2002 and 2013, the average delay in payment went up to 71 days from approximately 57 days. For small subcontractors at the bottom of the pyramid, that's the difference between making payroll and going under, leaving the workers themselves unpaid. What's remarkable here is the work done by construction lawyers Bruce Rey- nolds and Sharon Vogel of Borden Lad- ner Gervais LLP. Over a two-year period, they left no stone unturned in meeting with some 60 different groups to come up with their recommendations in their report "Striking the Balance: Expert Review of Ontario's Construction Lien Act," tabled in April 2016. It's no small feat. You've never ex- perienced the trials and tribulations of herding 1,000 cats, each with their own agenda, until you've been in a room with a bunch of construction people. Let's just say the air is salty and the opinions are never shy. "The biggest challenge whenever dealing with dis- parate industry is to try and solve the conundrum and bring the parties to form a consensus and to engage in an intellectual discussion and see the other person's point of view," says Vogel. "But they really were vest- ed into the process [of finding a way to update the CLA and ensure prompt payment] because it af- fects everything they do." Reynolds says the review grew out of the failure of Bill 69 in 2015. That bill was solely aimed at ensuring prompt pay- ment in the construction industry. "There were some who felt prompt payment should be a separate piece of legislation from the CLA," he says. "In the end, they all saw all the issues revolve around the contract, which is at the heart of the CLA." This is also timely because the gov- ernment plans to spend $190 billion in infrastructure over the next 13 years, in- creasing the risk of conf lict. "These changes will improve the f low of funds through the industry, cause disputes to be settled quickly and as- sure projects are delivered on time," says David Frame of the Ontario General Con- tractors Association. "These will be extensive changes." Attorney General Yasir Naqvi says it will "give con- tractors and subcontractors more time to resolve disputes outside of court and help to avoid additional legal fees." The highlights in the leg- islation, if passed and enacted by 2018, would create new prompt payment rules, which give con- tractors and subcontractors certainty around payments. It would extend the timelines for filing file liens and start court actions from 90 days to 150 days. This, it is argued, gives contractors and subcontractors time to resolve their disputes outside of court and avoid additional legal fees. It also requires holdback funds to be paid as soon as the deadline to file liens has passed. The most intriguing aspect is the cre- ation of a mandatory adjudication pro- cess "to speed up dispute resolution and prevent disputes from delaying work on construction projects." The concept of adjudication isn't new, the lawyers note, as it's been the de fac- to process in the U.K. for 20 years and works well. "The vast majority of matters never go to court or arbitration once they've been through adjudication," Shannon says, adding that the adjudicator's decision is only binding on an interim basis for the term of the contract. It effectively fast-tracks disputes away from the already overburdened and clogged dockets of the civil courts, set- ting a 30-day clock on the process once all the relevant documents and testi- mony have been filed with an appointed adjudicator. Reynolds and Vogel also recommend creating a single authority to certify, train and administer the ap- pointment of adjudicators. These adjudicators would be drawn from the self-regulating professions such as lawyers, accountant or architects and have some substantial experiences in the construction industry. After two years, there's still work in drafting the regulations, but an end is in sight. "We're at the 10-yard line," says Reynolds. LT uIan Harvey has been a journalist for more than 40 years, writing about a diverse range of issues including legal and political affairs. His email address is ianharvey@rogers.com. ©2017 Thomson Reuters Canada Ltd. All rights reserved. No part of this publication may be reprinted or stored in a retrieval system without written per- mission. The opinions expressed in articles are not necessarily those of the publisher. Information presented is compiled from sources believed to be accurate, however, the publisher assumes no responsibility for errors or omissions. Law Times disclaims any warranty as to the accuracy, completeness or currency of the contents of this publication and disclaims all liability in respect of the results of any action taken or not taken in reli- ance upon information in this publication. Publications Mail Agreement Number 40762529 • ISSN 0847-5083 Law Times is published 40 times a year by Thomson Reuters Canada Ltd. 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Karen Lorimer Managing Editor . . . . . . . . . . . . . . Jennifer Brown Editor . . . . . . . . . . . . . . . . . . . . . . Gabrielle Giroday Staff Writer . . . . . . . . . . . . . . . . . . . . .Alex Robinson Copy Editor . . . . . . . . . . . . . . . . . . Patricia Cancilla CaseLaw Editor . . . . . . . . . . . . . . . . . . Leah Craven Art Director . . . . . . . . . . . . . . . . . . . Phyllis Barone Production Co-ordinator . . . . . . . . .Catherine Giles Electronic Production Specialist . . . Derek Welford u EDITORIAL OBITER By Gabrielle Giroday New accountants? When lawyers and judges are portrayed in popular culture, math- ematics is not the first thing that comes to mind. However, after Jor- dan, it's worth noting the complex addition and subtraction required to calculate where fault lies for a particular case's delay. Take the re- cent ruling in R. v. Islam. The narrative — when reduced to its simplest elements — is an in- teresting one. A law student takes on the Crown over a 2014 traffic ticket, and in the process he wins a technological battle allowing him to serve the government using a web-based electronic faxing service, rather than a traditional fax machine. But in justice of the peace Joan- na Opalinski's ruling on the case, there's more complex math at play. "Using the test set out in Jordan, it has taken 21 months and 18 days for this matter to reach its anticipated trial date, which is over the presumptive ceiling of 18 months; while a pre-Jordan analysis places the time at approximately 8 months and 24 days, if one ac- cepts that the time required for the court to render its decision with regard to the motion brought by the applicant is to be considered as neutral time," she said. "If this time is not to be considered neutral time, then this time should be added to the 8 months and 24 days, which would bring the total delay to 12 months and 16 days in the pre-Jordan world. In any event, the court finds that by applying either a pre- or post-Jordan analysis, the length of [time] it has taken for this case to get to trial is unreasonable." So, in plain language, why does this matter? For one, as Opalinski suggests in her ruling, the calcu- lations on how long it took the matter to reach trial varies, using different analyses. Therefore, lawyers and judges, grab your calcu- lators. Interpretation of delays may vary. LT Queen's Park Ian Harvey

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