More than two years after the Prompt Payment and Construction Lien Act (the PPCLA) came into force, Alberta marked another significant milestone in construction law with the royal assent of the Service Alberta Statutes Amendment Act (the Act). This new legislation, passed on December 5, 2024, introduces changes to the Condominium Property Act, the PPCLA, and the Public Work Act. In this blog, we will focus on the amendments to the PPCLA. 

Key Amendments to the PPCLA: 

• Public Work Exemption: Expressly stating that the PPCLA does not apply to public work, except as provided in the Public Work Act. 

• Lien Rights Waiver: This change allows certain professionals “acting in a consultative capacity” to waive their lien rights if the relevant contract provides for such waiver and better aligns the PPCLA with industry practice, where statutory holdbacks are generally not withheld from design professionals. 

• Adjudication Mechanism: Replacing section 33.4 with a new dispute adjudication mechanism which: 

• Concurrent Adjudication: Allows contractors or subcontractors to refer a dispute to adjudication even though a party may have already commenced an action in court regarding such dispute. 

• Previously, the PPCLA prohibited referring a dispute to adjudication if an action has already commenced in court. 

• Deadline for Notice of Adjudication: Prohibits an adjudication process from commencing if a notice of adjudication is given more than 30 days from the “date of final payment” (as defined in the Act) unless the parties agree otherwise.  

• Previously, the deadline for commencing an adjudication process began on the completion of the contract or subcontract. 

• Concurrent Court Action: Allows a party to commence an action in court on or after the day the dispute is referred to adjudication, with both proceeding concurrently, unless the court directs otherwise. 

• Previously, if a party commenced an action in court on the same date the dispute was referred to adjudication, the adjudicator must discontinue the adjudication. 

• Termination Order: Allows the court to order an automatic termination of an ongoing adjudication based on the merits of the disputed matter. Previously, the adjudicator had no such authority.  

• Binding Determination: Amending section 33.6(5) such that an adjudicator’s determination on a matter is binding on the parties, except where: (i) a court order is made, (ii) an arbitration has been appointed by the parties under the Arbitration Act and the arbitrator has made an award, or (iii) the parties have entered into an agreement to resolve the matter. 

• Previously, the exceptions were if: (i) a court order is made in respect of the matter, (ii) a party has made an application for a judicial review under section 33.7, or (iii) the parties have entered into an agreement to resolve the matter. 

• Registration Requirements: Amending the registration requirements of an adjudicator’s order under section 33.6(4). For example, an order can no longer be registered if an arbitration has commenced or an award has been made under the Arbitration Act. 

• Judicial Review Application: Expressly providing that an application for judicial review does not stay the determination of a matter by an adjudicator unless the court directs otherwise.  

As the Act clarifies the adjudication process, streamlines the adjudication mechanism, and provides contracting parties with a broad latitude to tailor it, owners, contractors, and subcontractors should carefully consider how best to address adjudication in their contracts. For example, if a streamlined payment flow is not in a party’s best interest, the party may consider a provision stipulating an alternative to a binding determination.  

Likewise, suppose it is in a party’s best interest to accelerate or postpone the deadline within which a notice of adjudication must be given (such as in the case of many contractors and subcontractors). In that case, such party may wish to clarify an alternative timeframe in the agreement. 

With the Act soon coming into force on proclamation, we invite owners, contractors, subcontractors, and other stakeholders within the construction sector to contact us if you have any questions about how these changes may impact you or your organization.  

If this post interests you or resonates with your business needs, or if you need assistance with a new construction agreement or a construction dispute, we invite you to connect with us! Whether you are seeking guidance on a new construction agreement or facing a construction dispute, Nicol Law is here to help. Let’s schedule a chat to explore how we can work together. Feel free to email us at peewara.sapsuwan@nicol.law. Your success is our priority!