November 11, 2021
Construction Adjudication Maintains Popularity in 2021

Construction Adjudication Maintains Popularity in 2021

Chair of the Construction Contract Adjudication Panel issues 5th Annual Report

The Construction Contract Act 2013 regulates the payment process on construction contracts. It applies to written and oral contracts, prohibits the practice of 'pay-when-paid' clauses, provides important statutory protections for subcontractors, and gives a party the right to refer a payment dispute for adjudication as a means of resolving that dispute. The Act envisages that an adjudication will be concluded within a short time frame, i.e., 28 days from the date of referral of the dispute to an Adjudicator.

The newly appointed Chair of the Construction Contract Adjudication panel recently issued his fifth annual report covering the period from 26 July 2020 to 25 July 2021. This report outlines details of the disputes referred to the Adjudication panel at this time. The full report can be viewed here.

A summary of the main points are as follows:

  • ‍51 applicants seek the appointment of an Adjudicator. This number does not include Adjudicators appointed by the parties with agreement.‍
  • Quantity Surveyors and Architects are the top two professionals appointed as Adjudicators. ‍
  • Dublin, Cork, Tipperary, Kildare and Laois are the top five site locations of payment disputes in the country, with 28 in Dublin,4 in Cork, 3 in Tipperary, 2 in Kildare and 2 in Laois.‍
  • Subcontractor v Main Contractor are the primary parties in dispute with 19 disputes, followed by Main Contractor v Employer with 18 disputes.‍
  • Interim Payment and Final Payment are the main issues in dispute‍
  • Top 3 Values in Dispute - €100K - €500K (15Disputes), €50K - €100K (11 Disputes) and €1M - €5M (6 Disputes)‍
When referring a payment claim to Adjudication, all appropriate procedures required under the Act and Code of Practice should be followed.
  • Lowest Value in Dispute €10K - €30K‍
  • Claiming Party has been successful or partially successful in 34 of the 40 Adjudicator decisions reported.
  • Enforcement of Adjudicators decisions has been strengthened. To ensure the enforcement of an Adjudicators decision, should the unsuccessful party refuse to pay, the Rules of the Superior Courts were broadened to incorporate a provision for the enforcement by the High Court.
  • ‍When referring a payment claim to Adjudication, all appropriate procedures required under the Act and Code of Practice should be followed.The Chair makes the point that if a party to a construction contract, as defined under the Act, is contemplating referring a payment dispute for adjudication, all appropriate procedures required under the Act and the 'Code of Practice Governing the Conduct of Adjudications' should be followed. An information booklet on the Construction Contracts Act, 2013 is available on the Department's website at www.enterprise.gov.ie, which includes information on the various stages in the adjudication process.

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This insight has been provided by Mr Peter McCarthy, Principal Consultant at Conlex Consulting. For more information about the Construction Contracts Act 2013 and the process of referring a payment claim to Adjudication, don't hesitate to get in touch with Peter by email peter@conlex.consulting or on 086-7816358 for a non-binding consultation.

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