Security of Payment in the Construction Industry: Does International Experience Provide a Crystal Ball for North America?

Over the past two decades, more than a dozen jurisdictions around the world have enacted legislative reform programs to promote ‘security of payment’ within their construction industries. There are two linked foundations to these reforms: ensuring prompt payment for work done, and rapid interim adjudication of disputes over the amount of payment due for that work. This paper examines the reform processes currently underway in North America, focusing on those recently implemented in Ontario, Canada. It then draws on the experience in several other jurisdictions which have had security of payment legislation in place for some time (the UK, Ireland, the Australian states and territories, New Zealand, and Malaysia), along with proposed legislation in Mauritius, in order to distil lessons which can be applied for the benefit of the reform programs in North America. These include the need for clarity and, to the extent possible, cross-border consistency in the drafting and application of the elements of the schemes.