On 23 October 2020, reforms to the Building and Construction Industry Security of Payment Act 1999 (NSW) (the Act) came into effect. Such reforms empower the Minister for Better Regulation and Innovation (Minister) to implement a code of practice to be observed by authorised nominating authorities (ANAs) in relation to their activities under the Act .
ANAs are responsible receiving adjudication applications and appointing adjudicators for payment claim disputes under Act.
On 13 October 2020, the Minister introduced the Building and Construction Industry Security of Payment— Authorised Nominating Authorities (Code of Practice) Order 2020 (the Code), which commences on 1 January 2021.
The Code replaces existing arrangements whereby an ANA provides the Minister with an undertaking to abide by a code when applying for an authority to appoint adjudicators.
Key Changes in the NSW Security of Payment Act
The key changes included in the Code include:
- clarifying minimum expected standards of conduct;
- improved requirements for complaint handling;
- clarifying minimum expectations for disclosing fees;
- offences for contraventions of specified provisions;
- requirements for managing adjudicator panels; and
- clarifying professional management standards.
The Code also introduces minimum standards of conduct that ANA’s are now obligated to abide by, including:
- understanding relevant laws necessary for the ANA to exercise its functions;
- exercising reasonable skill, care and diligence when exercising functions;
- acting with honesty, fairness and professionalism in all dealings;
- not engaging in disreputable conduct (e.g. intimidation, discrimination, etc.); and
- not disclosing confidential information.
Further, Part 3 of the Code mandates that ANA’s must avoid conflicts of interest, including not accepting inducements to take on matters or refer to particular adjudicators. To ensure compliance, ANA’s are required to have internal management and conflict policies in place.
Failure to comply with the Code attracts a maximum penalty of 50 penalty units.
For more information in relation to the Code, please do not hesitate to contact FAL Lawyers.
 Building and Construction Industry Security of Payment Act 1999 (NSW), section 28A.