Late Payment: New EU Pilot Project on Mediation for Payment Disputes in the Construction Sector

On 29 May, the European Commission’s DG GROW, the European Innovation Council and SMEs Executive Agency (EISMEA) and Milieu Consulting launched an EU Pilot Project on mediation for payment disputes in the construction sector focusing on Belgium. Addressed to SMEs in the construction sector and legal professionals, the webinar sought to highlight the rationale and key elements of this pilot project.

After EISMEA gave on overview of the expectations and goals of the project, Antonella Correra, Senior Legal Officer at DG GROW presented the current situation of late payment in the EU, with a particular angle on its impact on the construction sector.

Then, the legal firm Simont Braun gave an overview of the applicable mediation framework in Belgium. Examples and data on the practical application of mediation practices from the Belgian construction sector were shared, showing potential to help parties come to solutions in a significantly faster and less resource-consuming way compared to court proceedings. Mileu Consulting followed with more insights on the tools and resources under development in the pilot project, as well as on the EU rules on mediation and the EU standard mediation clauses. Actual mediation cases will be carried out during the project, involving accredited mediators and construction companies with late payment disputes.

Indicatively, it was noted that in Belgium approximately 80% of mediation cases end with a resolution of the disputes. Most mediation cases are resolved following three meetings of a three-hour duration, in stark contrast with traditional court proceedings that can last several years. This is of particular potential for the construction sector, where the nature of construction sites requires swift resolutions to avoid significant additional costs and delays. It was also noted that not all mediators can mediate any case, especially in construction, where discussions and disputes can be particularly technical and require a specific knowledge.

This initiative comes timely considering the ongoing legislative process towards a Late Payment Regulation at European level. Indeed, the construction sector being particularly prone to disputes on goods and services resulting in late payment, this focus on the use of mediation as an alternative to traditional legal proceedings to obtain prompt payment is relevant. SMEs from the construction sector are particularly affected by late payment, and often suffer from a lack of awareness, knowledge and access to mediation schemes. For this reason, this pilot project will also try to make a case for an increase uptake of mediation by SMEs for the benefit of the sector and the entire single market.

EBC along with its Belgian member Bouwunie took part in the webinar and will continue engaging with the pilot project, as such initiatives have an important complementary role in helping SMEs resolve disrupting late payment situations. The availability of mediation mechanisms should be encouraged but should not hide the major need for a robust legal framework to tackle late payment across the EU.

EBC reiterates the importance of a strong and clear EU framework, on the basis of the European Commission’s legislative proposal for a Late Payment Regulation and the supportive European Parliament report, to effectively combat late payment at its core and foster a new payment culture to the benefit of SMEs and crafts of the construction sector and the whole EU economy.

For more information on this pilot project, visit the website

To read the latest EBC article on the EP Plenary vote on the Late Payment Regulation, click here
To read the EBC Press Release on IMCO vote on the Late Payment Regulation, click here
To consult EBC’s feedback on the proposal for a Late Payment Regulation, click here
To consult the EBC position paper on the Revision of the Late payment directive, click here