Adjudication it is an expedited dispute resolution process that sees very rapid decisions given in relation to payment disputes in construction. It was put on a statutory footing in Ireland by the Construction Contracts Act 2013 (see Section 6 in particular).
This form of statutory adjudication is specific to construction contracts and is not to be confused with other types – for example, adjudications of residential tenancy disputes under the Residential Tenancies Act 2004.
Referring a Payment Dispute to Adjudication
Any party to a construction contract has the right to refer a payment dispute to adjudication. This is done by serving a notice on the other party, which can be done at any time.
An adjudicator is then appointed, either by agreement between the parties or as selected by the chair of the Construction Contracts Adjudication Panel from the Ministerial appointed Panel of Adjudicators.
Once an adjudicator is appointed, the referring party has 7 days to refer the payment dispute to the adjudicator, and must copy the referral and all supporting documentation to the other party.
Costs of Adjudication Process
Each party must bear its own legal and other costs incurred in connection with the adjudication.
The fees, costs and expenses of the adjudicator are paid by the parties as directed by the adjudicator in his/her decision.
Evidence and Hearings
The process is intended to be conducted quickly and in most instances a decision can be made based on the documents submitted.
If the adjudicator requires additional documentation, or to hear from one or more of the parties, he/she is empowered to take the initiative in ascertaining the facts and the law in relation to the payment dispute.
Adjudicator’s Decision
The adjudicator has a period of 28 days to reach a decision (unless a longer period is agreed by the parties). This period starts on the day the payment dispute is referred to the adjudicator.
The decision is binding on the parties unless and until the payment dispute is settled between the parties or a different decision is reached in an arbitration or in court proceedings.
practical points to note
- The referring party bears the onus of proving the claim. The standard of proof is balance of probabilities. Evidence is required to support the claim.
- The responding party must normally submit a (detailed) response to the claim within 7-10 days, and should include any supporting documents on which they intend to rely. This is a challenging timeline.
- The Adjudicator has power to request witness statements but should be careful not to rely on elements of witness statements which are unsupported by contemporaneous evidence.
- There are template forms provided by the Construction Contracts Adjudication Service (CCAS) but these should be used with caution. They are for guidance only.
caselaw
Kevin O’Donovan and The Cork County Committee of the Gaelic Athlethic Association v Nael G. Bunni and James Bridgeman and OCS One Complete Solution Limited [2020] IEHC 623 & [2021] IEHC 575
The principal issue was over whether the 2013 Act applied to the dispute, where it was argued that the contract had been entered into prior to commencement of Act.
Also, one party had stayed the adjudication pending Judicial Review and this stay was maintained despite objection, in the circumstances. (The Judicial Review decision is reported at [2021] IEHC 575.)
Gravity Construction Limited v. Total Highway Maintenance Limited [2021] IEHC 19
Enforcement of Adjudicator’s Award. Really comes down to the form of Order that should be made, and what costs awarded, where respondent ‘folded the tent’ shortly prior to hearing and agreed to undertake to pay the award.
Issue over whether one party, by advancing a claim in proceedings that had not been advanced in adjudication, acted fraudulently.
A later decision on costs, and an application for a stay, can be found at [2021] IEHC 139.
Aakon Construction Services Ltd v Pure Fitout Associated Ltd [2021] IEHC 562
Enforcement of Adjudicator’s Award. Award challenged on basis of alleged procedural irregularities in exchange of notices and observance of fair procedures by adjudicator. Challenge rejected by Simons J.
Principal Construction Ltd v Beneavin Contractors Ltd [2021] IEHC 578
Enforcement of Adjudicator’s Award. Award challenged on the basis that Adjudicator lacked jurisdiction (due to the final certificate not being disputed within the time provided) and on the basis that the Adjudicator breached the principles of natural justice by refusing to allow the respondent to prosecute its counterclaim. Challenge rejected by Meenan J.