Explanation of the Role of Adjudicator and The Construction Contracts Act 2013
The Act was enacted on the 29th July 2013 in Ireland and was signed into force on 25th July 2016. The purpose of the Act is to ‘regulate payments under construction contracts and to provide for related matters.’ The Act is made up of twelve sections and a Schedule. The Sections are: 1) Interpretation; 2) Construction contracts; 3) Payments under construction contracts; 4) Payment Claim Notices; 5) Right to suspend work for non-payment; 6) Right to refer payment disputes to adjudication; 7) Right to suspend work for failure to comply with adjudicator’s decision; 8 ) Selection of panel of adjudicators; 9) Code of practice for adjudication; 10) Delivery of notices; 11) Expenses; and, 12) Short title and commencement. The Act is available on www.irishstatutebook.ie.
The Act introduced Adjudication as a dispute resolution procedure for construction projects in Ireland. Parties to construction contracts can refer any payment dispute to adjudication at ‘any time’.
The following contracts are excluded from Adjudication according to the Act:
- contracts valued at less than €10,000.
- contracts relating to owner-occupied residential dwellings of less than 200sq metres – adjudication on payment disputes will be available if the property is large enough.
- contracts for employment; and
- contracts between a state authority and its partner in a public private partnership arrangement.
Referring a Payment Dispute to Adjudication:
A party can initiate the Adjudication process by issuing a Notice of intention to Refer the Dispute to Adjudication. The Notice of Intention is important as it defines the Adjudication and the Adjudicator derives his/her jurisdiction from the Notice. After issuing the Notice of Intention the employer and contractor or contractor and subcontractor as the case may be, has 5 days normally in which to agree the appointment of an Adjudicator or the appointment can referred to the Chair of the Construction Contracts Adjudication Panel where the parties have no control over the appointment. There is no set time frame in Ireland for the appointment of the Adjudicator, unlike in the UK.
Following confirmation of the Adjudicator’s appointment, the party who is referring the dispute to Adjudication has 7 days in which to serve it’s Referral Notice setting out its Claim in detail usually accompanied by supporting documents together with any reports and witness statements.
Quite often at the outset of adjudications there may be threshold jurisdictional challenges from the Responding party with regard to such matters as to the matter being allowed under the Act, the existence of a dispute and other such objections ,all of which have to dealt with by the Adjudicator. It is normally a fast moving and intensive process for all parties involved and their agents/ advisers on both sides.
Conduct of Adjudication CCA13
Adjudicators are required according to the Act to adhere to the Code of Practice. The Code stipulates that Adjudicators must be “impartial, independent and only adjudicate where satisfied that no actual conflict of interest exists. He / she shall observe the principles of procedural fairness, which shall include giving each party a reasonable opportunity to put their case and to respond to the other party’s case.”
Enforcement of an Adjudicator’s decision
According to the Act, the Adjudicator must Make a Decision with 28 days of the Referral, but this can be extended by agreement with the parties.
An Adjudicator’s Decision is temporarily binding on the parties until the matter is finally settled.
Right to Suspension of Work:
If an Adjudicator makes a monetary award decision and the sum is not paid within seven days, the party to which the sum is owed has a right to suspend work by giving notice to the other party. Work can be suspended until either:
- payment of the amount due is made; or
- the Decision of the Adjudicator is referred to Arbitration or Litigation.
A party to an Adjudication may apply to the High Court to Enforce a Decision under a Statutory Instrument that came into operation on 22 August 2016.