Proposed amendments to the Building Act 2004 will require building contractors to provide a pre-contract checklist to prompt consumers to make relevant enquiries and seek further information.
The checklist will also summarise the parties' dispute resolution options.
Building contractors will be required pre-contract to provide the consumer with a summary of previous dispute history and any regulatory penalty incurred.
The disclosure is limited to disputes and penalties in the previous ten years and that the relevant information is in thepublic arena.
The disclosure requirement will therefore include determinations of the Court's civil and summary jurisdictions (the later where prosecutions proceeded); the Weathertight Tribunal, the Disputes Tribunal (where determinations are published on the Tribunal's website), and Commerce Commission prosecutions (air Trading Act).
Where the Chief Executive maintains a record of infringement notices accessible to the public then future infringements will need to be disclosed.
It is anticipated that a successful defence to either a private civil claim, or a regulatory prosecution will still need to be disclosed being information that is in the public arena.
For this reason, it is anticipated that determinations of complaints and the provision of inspection services by trade associations will not need to be disclosed.
The requirement for disclosure of the building contractor's dispute history will increase the incentive to refer consumer disputes to dispute resolution options that are by their nature private and confidential and remain outside thepublic arena.
Building contractors will have the opportunity to identify preferred dispute resolution processes in the written contracts for all residential contracts with a threshold of $20,000 or more.
The regulations will likely identify escalating dispute resolution options commencing with conciliation / negotiation, followed by private mediation, and adjudication under Part III - Construction Contracts Act 2002 (CCA).
Other dispute resolution options would remain available for inclusion by the parties' in the written contract, including arbitration and expert determination.
Thought however needs to be given to the relative benefits / costs of these latter options where disputes involve lower sums.
Consideration should also be given to the suitability of dispute resolution options and their viability and to the existence of any statutory limitation periods.
A pre-contract assessment of the substance of dispute resolution options might also be warranted.
For example, if expertise matters then what role is there for evaluative mediation? If the parties wish to avoid court based litigation is there a role for Med-Arb? Who is to deliver these services? Contracting parties are not able to exclude the Court's jurisdiction to determine a dispute, however they are free to agree that their dispute is attempted to be resolved in the first instance by means other than litigation.
An appropriately drafted dispute resolution clause can be the basis for a successful application to stay court proceedings to give effect to the parties' contractual agreement.