The Irish 'Construction Contracts Act 2013' Adjudication

The Irish ‘Construction Contracts Act 2013’

Adjudication – What has happened and where next?

Dissertation submitted in part fulfilment of an MSc degree in Construction Law &

Dispute Resolution, King’s College London

September 2019

© Centre of Construction Law & Dispute Resolution, King’s College London

Peter O’Malley - [email protected] – Student ID Number 1886053

MSc Construction Law and Dispute Resolution, King’s College London Dissertation 2019

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The Irish ‘Construction Contracts Act 2013’

Adjudication – What has happened and where next?

Keywords

Adjudication Dispute Malaysia Alternative Dispute Dispute System Design Mediation Resolution Enforcement MedRec Arbitration Engineers Ireland Ministerial Order Australia England and Wales Natural Justice Building Information European Union Law NEC Modelling (BIM) FIDIC New Zealand Chartered Institute of Finality Northern Ireland Arbitrators (CIArb) Germany Oireachtas Code of Practice Global Financial Crisis Payment disputes Conciliation Gross Fixed Capital Pay now – argue later Constitution of Ireland Formation (GFCF) Private Members Bill Constitutional Law HGCRA 1996 Public policy Construction High Court Public Works Contract Construction Contracts Hong Kong PWC-CF1 Adjudication Service House of Commons Regulatory Impact Construction Contracts House of Lords Analysis (RIA) Bill 2010 Insolvency Republic of Ireland Construction Contracts Ireland Royal Institute of the Act 2013 Irish Parliament Architects of Ireland Construction Industry Irish Water Major Works Seanad Eireann Federation (IWMW) Singapore Contract Judicial Review Society of Chartered Contractor Jurisdiction Surveyors Ireland Costs Latham Report 1994 South Africa Dail Eireann LDDCA 2009 Technology and Default Liquidation Construction Court Determination Litigation United Kingdom

Abstract

Three years have now passed since ‘The Construction Contracts Act 2013’ (the Act)

came into force in Ireland on 25 July 2016. This paper seeks to investigate what impact

the Act has made in the stated objective of supporting a swift resolution of payment

disputes in the Irish construction industry, with particular emphasis on adjudication.

Referring to research, evidence, authoritative commentary, and comparison with other

jurisdictions, this paper discusses what has happened with adjudication under the Act

and what the future direction might be.

(14,660 words with exclusions in accordance with College Regulations)


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Acknowledgements

I would like to sincerely thank the following for setting aside their time and for extending encouragement in the preparation of this dissertation.

Professor Nicholas Gould Dissertation Supervisor – King’s College London

and:

Dr Brian Bond Chartered Engineer and Arbitrator, Dublin

Tim Bouchier-Hayes Consultant, Mediator, Conciliator and Arbitrator, Dublin

Dr Nael Bunni 39 Essex Chambers, London

Martin Cooney Byrne Wallace, Dublin

Ben Cunningham Quigg Golden, Dublin

Tony Cunningham Lecturer, Technological University Dublin

Jim Curley Group Chief Executive - Jones Engineering, Dublin

Siobhan Fahey Chartered Engineer and Arbitrator, Waterford

Ciaran Fahy Chartered Engineer and Arbitrator, Dublin

John Gibbons SC Chartered Engineer and Arbitrator, Dublin

John Green Building Disputes Tribunal, Auckland, New Zealand

Anthony Hussey Hussey Fraser, Dublin

Brian Hutchinson UCD Sutherland School of Law, Dublin

Professor Rudi Klein SEC Group, London

Martin Lang Director, Construction Industry Federation, Dublin

Jamie McGee McCann FitzGerald, Dublin

Gerard Meehan The Bar of Ireland, Dublin

Matt Molloy MCMS, London

Clive Newberry QC No.5 Chambers, London

James O’Donoghue Bluett & O’Donoghue, Dublin, Chair CIArb. Ireland

Niav O’Higgins Arthur Cox, Chair - Adjudication Society Ireland, Dublin

David O’Leary MKM Dispute Resolution, Dublin


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Contents

Page

Table of cases 6

Table of statutes 7

1. Introduction 9

2. Methodology 10

3. Context 10

4. The ‘Construction Contracts Act 2013’ (the Act) 14

5. Adjudication under the Act - the first three years 17

6. Why is there a relatively low level of activity in adjudication? 19

6.1 Perception of high cost 20

6.2 Doubt regarding enforcement 22

6.3 Presence of the Constitution of Ireland 25

6.4 Reluctance to engage in an adversarial process 27 and a lack of awareness

6.5 Availability of other more established dispute 28 resolution methods

7. The view of the Construction Industry Federation (CIF) 32 8. Adjudication and the standard forms of construction contract 34

9. What of the primary objective of the Act and adjudication? 36 10. Conclusion – What has happened and where next? 39

Appendix A: Adjudicator nomination during the first five years 45 from enactment in selected jurisdictions

Appendix B: Suggested areas of further research 46 Appendix C: Royal Institute of the Architects of Ireland 48 Construction Contract, Clause 38, August 2017 Edition Appendix D: Public Works Contract – Without quantities – PW-CF1 2018 49 Appendix E: Irish Water Major Works Contract 53 (IWMW) – Without Quantities - 2019 Appendix F: The ‘Construction Contracts Act 2013’ (the Act) 54 Appendix G: Code of Practice Governing the Conduct of Adjudications 61 Appendix H: Statutory Instrument No. 450 of 2016, Rules of the Superior Courts 67 Bibliography 70


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Table of cases Page

Republic of Ireland

Carty-Doyle v Financial Services Ombudsman [2014] IEHC 352 26

Eurofood IFSC, Re [2004] 4 IR 370 25

Fitzpatrick v Board of Management of St Mary's Touraneena 20 National School & Anor [2013] IESC 62 Gallagher v Revenue Commissioners [1995] 1 IR 55 26

Lyons & Murray v Financial Services Ombudsman [2011] IEHC 454 26

O’Neill v Financial Services Ombudsman [2014] IENC 282 26

Ryan v Walls Construction Ltd [2015] IECA 214 31

England and Wales

Bouygues (UK) Ltd v Dahl-Jensen (UK) Ltd [2000] BLR 522 23

Carillion Construction v Devonport Royal Navy Dockyard [2005] 23 EWCA Civ. 1538

Macob Civil Engineering Ltd v Morrison Construction Ltd [1999] 23 EWHC Technology 254


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Table of statutes Section Page Republic of Ireland

Arbitration Act 2010 33

Companies Act 2014 569(d) 23

Construction Contracts Act 2013 54 2 15 2(1) 15

2(2) 15 2(3) 15 2(4) 15 2(5)(b) 15 3(5) 36 6(1) 16 6(2) 21 6(5)(b) 21 6(9) 16 6(11) 41 6(15) 20 12(2) 15 Construction Contracts Act 2013, Schedule 3 38

Mediation Act 2017 32

Protection of Animals (Amendment) Act 1965 13

Public Health (Tobacco) Act 2002 11

Statutory Instrument No.450 of 2016, Rules of the Superior Courts 13, 67 England and Wales

The Housing Grants, Construction and Regeneration Act 1996 9

The Housing Grants, Construction and Regeneration Act 1996 16 as amended by Part 8 of the Local Democracy, Economic Development and Construction Act 2009

Scheme for Construction Contracts (England and Wales) 9 Regulations 1988

Scheme for Construction Contracts (England and Wales) 16 Regulations 1988(Amendment) (England) Regulations 2011

New Zealand

Construction Act 2002 43

Transnational

UNCITRAL Model Law on International Commercial 29 Conciliation with Guide to Enactment and Use 2002


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1. Introduction

The Irish ‘Construction Contracts Act 2013’ (the Act) came into force on 25 July 2016

in order to ‘improve payment practices in the industry and to allow swift resolution of

payment disputes by way of adjudication’.1 At the time of the Government debate on

the bill in 2012,2 prior to the Act, it was said that ‘This legislation is long awaited and

desperately needed’3 and that ‘many small companies will be delighted when it is

enacted’.4 It was further said that ‘there is overwhelming support for this initiative’5 in

‘addressing a serious power imbalance in the sector’.6 It is clear that there were high

hopes for the Act on its enactment.

Although the Act was primarily to impose mechanisms for payment, particularly to sub-

contractors, a key provision was the introduction of adjudication as further protection in

the resolution of payment disputes. The implications of the Act on the industry cannot

be under-estimated, because when adjudication is imposed it is ‘arguably the most

radical interference by the legislature of any country in which it has been introduced in

respect of the right to contract on such terms as the parties deem appropriate’.7

In view of the close economic relationship between Ireland and the United Kingdom

(UK), where statutory adjudication was introduced in 1998,8 it would be reasonable to

expect the Act in Ireland to have been enthusiastically embraced, as was its predecessor

in the UK. After enactment Edwards-Stuart J in the UK advised ‘I hope that it proves

as successful in that jurisdiction as it has in this one’.9 However, there has since been a

‘relatively low level of activity’10 in adjudication in Ireland which suggests that it has

not yet enjoyed the degree of adoption that was anticipated prior to the Act. This paper

seeks to investigate this relatively low activity and discuss what has happened with

adjudication under the Act, before concluding with a view on what the future may hold.

1 Houses of the Oireachtas (2012) Construction Contracts Bill [Seanad]: Second Stage, 3 May 2012, Dail Eireann Debate Vol 769 No 2 – Deputy Tom Hayes. 2 n1. 3 n1, Deputy Mary Lou McDonald. 4 n1, Deputy Jim Daly. 5 n1, Deputy Arthur Spring. 6 n1, Deputy Stephen S. Donnelly. 7 Hussey, Anthony, Construction Adjudication in Ireland (2017) at p.1. 8 Statutory adjudication was introduced in the UK in 1998 through The Housing Grants, Construction and Regeneration Act 1996 and the Scheme for Construction Contracts Regulations 1988. Referred to generally within this paper as the UK Act. 9 Edwards-Stuart J, Surveyors acting as adjudicators in the construction industry, at p. 1. 10 Bunni, Dr Nael, Annual Report of the Chairperson of the Ministerial Panel of Adjudicators 2018, p. 9.


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2. Methodology

The methodology adopted in the compiling of this paper has been firstly to undertake a

review of literature, publications, papers and authoritative commentary as primary and

secondary sources. Secondly, to draw upon and discuss case law in the jurisdiction of

Ireland and also that of England and Wales in seeking to further detail identified points.

Finally, the paper reflects upon the discussions from meetings with a number of

practitioners, academic authorities and construction industry representatives involved in

dispute resolution in Ireland.

The methodology is supported by two data sets. The first of these data sets seeks to

assess the adoption, or take-up, of adjudication in the first five years from enactment in

selected jurisdictions. This assessment is made through a comparison of adjudicator

nomination statistics as an indication of adjudication activity in each jurisdiction. The

second data set seeks to place adjudication in Ireland in the context of other construction

dispute resolution methods. This data set is derived from the nominations for

mediation, conciliation, adjudication and arbitration provided by the primary Dispute

Resolution Boards in Ireland as an indicator11 of resolution preference for 2018/2019.

3. Context

Ireland,12 having gained independence from the United Kingdom in 1922, has a legal

system based upon Common Law supported by the statutes of government, together

with secondary legislation derived from these statutes. In addition the system is subject

to European Union Law, as applicable to Ireland, together with the ‘Constitution of

Ireland’ (Bunreacht na h’Eireann)13 which is all pervasive.

11 It is recognised that not all adjudicator nominations proceed to an adjudication, but on a ‘like for like’ basis this data can provide an indication of overall adjudication activity. 12 For the avoidance of doubt, as misunderstanding still prevails, Ireland is formed of the majority of the physical island of Ireland being comprised of 26 of a total of 32 counties on the island. Ireland should not be confused with ‘Northern Ireland’, being the remaining primarily northernmost six counties on the island that are part of the jurisdiction of the United Kingdom of Great Britain and Northern Ireland, where Great Britain comprises England, Wales and Scotland. 13 The ‘Constitution of Ireland’ was enacted on 1 July 1937 replacing the ‘Constitution of the Irish Free State’ of 1922 and can only be amended by national referendum. There have been 31 amendments reflecting the evolving public policy of the nation state. In its fundamental rights articles it guarantees the individual citizen freedom, equality and justice.


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As a result, there is ‘great emphasis under the Constitution placed upon fair procedures

in all judicial and quasi-judicial decision making tribunals’.14 The Irish legal system

which is less than 100 years old has its historic roots in the United Kingdom of Great

Britain and Ireland. The system continues to have regard to the development of

Common Law in other Common Law jurisdictions, in particular that of England and

Wales, being considered persuasive but not binding.

The Irish Parliament, the Oireachtas, comprises a lower house, Dail Eireann, and an

upper house, Seanad Eireann, being the respective equivalent of the House of Commons

and the House of Lords in the UK Parliament. The independence of the Irish legal

system is held dearly and has been more forthright in its development than that of the

UK in certain areas.15

Given the close geographic proximity, general common values and not entirely

dissimilar cultures, it is not surprising that Ireland and the UK have shared the ‘boom

and bust’ cycles16 of their respective economies. This parallel economic performance

has extended to the construction sector, but recently in more severe terms for Ireland.17

This severity is illustrated through the past Gross Fixed Capital Formation (GFCF)

investment in building and construction in Ireland which in 2006 was 38bn euros,

before reducing sharply in 2012 to 9bn euros. Six years later in 2018, the GFCF has

only recovered to 26bn euros,18 still substantially less than the 2006 peak. The

importance of the construction industry to the economy of Ireland is reflected in its

contribution to national employment. In 2016 the construction industry represented

6.8% of national employment, increasing to 9.5% when the indirect employment of

firms supplying the industry is included.19

14 Burr, Andrew, International Contractual and Statutory Adjudication (2017) at p.206. 15 Ireland became the first country in the world to institute an outright ban on smoking in the workplace through the ‘Public Health (Tobacco) Act 2002’, enacted 29 March 2004. 16 As part of the Global Financial Crisis the UK economy contracted to - 4% GDP in 2008 and similarly the economy of Ireland contracted to -4.6% GDP in 2009, source: https//data.worldbank.org/indicator /NY.GDP.MKTP.KD.ZG?end=2017& locations=IE-GB&name_desc=false&start=1961 17 In 2007 the construction sector in Ireland employed 240,000 people, in 2012 this had reduced to 81,300 people and by 2018 this has recovered to 145,500 people, being 60% of the 2007 peak. Similarly house commencements, as an indicator of economic activity, were 48,876 in 2007, reducing to 4,042 in 2012 before recovering to 22,467 in 2018, being 46% of the 2007 peak, Construction Industry Federation (CIF)/Davy, Construction Industry Economic Update, 9 May 2019 at p. 3. 18 Construction Industry Federation / Davy Construction Industry economic update, 9 May 2019 at p. 7. 19 Construction Industry Federation / DKM Economic Consultants, Demand for Skills in Construction to 2020 (2016), at p. vi.


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The construction industry in Ireland, like the industry in many other countries, has

always been subject to volatility. The impact from the Global Financial Crisis between

2009 and 2012 demanded that the industry adopt survival tactics for continued

solvency. Such was the severity of economic contraction that the ‘construction sector,

perhaps more than any other sector in the economy, underwent an overnight collapse,’20

leaving ‘a large number of building contractors exposed to non-payment by employers

and, in the case of sub-contractors, non-payment by main contractors’.21

The industry collapse was so precipitous that ‘more than 500 companies in the sector

had failed in 2009’,22 resulting in ‘construction firms accounting for four out of every

ten business failures in the first six months of 2010’.23 At the time it was estimated that

‘in the case of the six largest construction companies which have gone out of business

in the last two years, at least 500m euros has been left owing to sub-contractors’.24 It

was said in 2011, that ‘such was the importance of, and over reliance on, the

construction and property industries in Ireland that their crash has pretty much taken the

Irish economy with it’.25

The industry was criticised for having a ‘culture which seems to be more tolerant than

other industries of practices such as oral contracts and in some cases “pay when paid”

clauses, lack of clarity on payment dates and in some cases deliberate non-payment or

slow payment arrangements’.26 It was further commented that ‘this problem has always

been there but it has never been at the scale currently being experienced’,27 where ‘it is

difficult for compliant builders to match the prices of non-compliant builders who price

jobs knowing they will never fulfil their obligations to sub-contractors’.28

In ‘the resulting clamour the Construction Contracts Bill 2010 was initiated by the late

Senator Fergal Quinn’,29 promoted unusually as a Private Members Bill in Seanad

20 Munnelly, Michael, ‘The Construction Contracts Act 2013’, presentation at the Construction Law Conference in Dublin, 23 November 2013, at p. 1. 21 n20 at p. 1. 22 n1 – Deputy Stephen S Donnelly. 23 Department of Public Expenditure and Reform, Regulatory Impact Analysis (RIA) in Connection with the Construction Contracts Bill 2010 (2011), at p. 3. 24 n1 – Deputy Mary Lou McDonald. 25 The Economist, ‘Ireland’s Crash; After the Race’, 17 February 2011. 26 n23 at p. 3. 27 n23 at p. 3. 28 n1 – Deputy Robert Troy. 29 n20 at p. 1.


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Eireann.30 Senator Quinn later commented: ‘I knew that cash flow was very important

to sub-contractors, many of whom were left high and dry in the recession after the main

contractors they had worked with refused to pay them.’31 The Senator further added

‘Until then, if a sub-contractor stopped work in protest when the bigger contractor

didn’t pay on time, the sub-contractor could be sued because they had agreed to do the

job. The fact that they had not been paid made no difference!’32

Introduced through the Senate in May 2010, debated by Government, subjected to a

Regulatory Impact Analysis, and consulted upon by various industry bodies, the

Construction Contracts Bill 2010 became law, subject to a Ministerial Order, on 29 July

2013. The necessity to draw up a Code of Practice, to formulate an Adjudication Panel

and to amend the Rules of the Superior Courts33 in support of enforcement (see

Appendix H) resulted in the date of enactment of the Act being substantially delayed.

That it required ‘a further three years to put in place the measures necessary for its

implementation, suggests that the legislative system is far from perfect’.34

The Act essentially provides for two elements, firstly a ‘mechanism whereby main

contractors may, and sub-contractors will, be paid promptly for the value of their work

as the contract proceeds.’35 Secondly, the Act introduces ‘statutory adjudication in

relation to payment disputes with a view to ensuring that payment cannot be unduly

delayed simply because it is disputed in whole or in part’.36 It has been said that the Act

‘has come too late for many in the industry who suffered as a result of the last economic

recession, it will hopefully provide an important protection for those operating in the

construction industry in the future’.37

30 Unusually, because the most recent Private Members’ Bill initiated in the Seanad to become Law, prior to the Act, was the ‘Protection of Animals (Amendment) Act 1965’. Deputy Stephen S Donnelly in the Houses of the Oireachtas, Dail Eireann Debate Vol 769 No 2, 3 May 2012. 31 Quinn, Feargal, Quinntessential (2016), at p. 252. 32 n31at p. 253. 33 S.I. No.450 of 2016 – Rules of the Superior Courts (Construction Contracts Act 2013) 2016. 34 n7 at p. 2. 35 n7 at p. 1. 36 n7 at p. 1. 37 Pickavance, James, A Practical Guide to Construction Adjudication, – Chapter 23: Ireland by Dermot McEvoy (2016) at p. 472.


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4. The ‘Construction Contracts Act 2013’ (The Act)

With respect to brevity and the more qualified authorities who have made extensive

comment on its provisions,38 this paper does not seek to make a detailed assessment of

the Act. As a piece of legislation, the Act is a relatively brief document (see Appendix

F) comprising twelve Sections and one Schedule. The policy objectives of the Act were

defined in the Regulatory Impact Analysis,39 published during the passage of the Act in

September 2011, as follows:

- To ensure prompt cash flow improving efficiency; and - To allow swift resolution of disputes by way of adjudication, allowing

projects to be completed without wasting time and money in litigation.40 These objectives were to be achieved within the Act through:

- a right to interim, periodic or stage payments, making clear when payments become due, their amount and a final date for payment; - a statutory right for the payee to suspend performance where a ‘sum due’ is not paid, or properly withheld, by the final date for payment; - the prohibition of “pay when paid” clauses which delay payment until it is received by the payer; - a procedure for parties to a contract to make a payment claim; - a statutory right for parties to a construction contract to refer payment disputes to adjudication; - an adjudication procedure to deal quickly with disputes about payments. The adjudicator’s decision to be binding, unless appealed to arbitration, and payment, if any, to be made to the party named in the decision; - a panel of adjudicators to be set up and administered by the Department of Public Expenditure and Reform.41

38 For a detailed analysis of the Act and comparison with adjudication in other jurisdictions I would recommend Hussey, Anthony, Construction Adjudication in Ireland (2017). For further detail on adjudication legislation across the international jurisdictions in which it has been adopted I would recommend Burr, Andrew, International Contractual and Statutory Adjudication (2017). 39 Department of Public Expenditure and Reform, Regulatory Impact Analysis (RIA) in Connection with the Construction Contracts Bill 2010 (2011). It is of note that this was the first piece of proposed legislation in Ireland to be subject to a Regulatory Impact Analysis. 40 n39 at p. 14. 41 n39 at p. 14.


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The Act applies to all construction contracts, subject to limited exceptions,42 whether or

not the parties to the contract purport to limit or exclude its application,43 entered into

after the date of the Minister’s Commencement Order,44 25 July 2016. The Act

provides only limited information for the procedure and conduct of adjudication, where

detail is provided in the ‘Code of Practice Governing the Conduct of Adjudications’45,

see Appendix G, as the supporting secondary legislation, pursuant to Sections 6(8) and

6(9) of the Act. The individual sections of the Act46 are as follows:

Page

Section 1 Interpretation 3

Section 2 Construction contracts: exceptions etc. 5

Section 3 Payments under construction contracts 6

Section 4 Payment claim notices 7

Section 5 Right to suspend work for non-payment 8

Section 6 Right to refer disputes to adjudication 9

Section 7 Right to suspend work for failure to comply with 10

an adjudicator’s decision

Section 8 Selection of panel of adjudicators 11

Section 9 Code of practice for adjudication 12

Section 10 Delivery of notices etc. 12

Section 11 Expenses 12

Section 12 Short title and commencement 12

Schedule Provisions to apply to matters regarding payments 13

In addition to the UK, adjudication as a method of resolving construction disputes is

well established around the world particularly in Commonwealth countries,47 where

Common Law provides the basic structure for the respective individual legal systems.

42 The Act, Section 2 subsections (1), (2), (3) and (4). 43 The Act, Section 2 subsection (5)(b). 44 The Act, Section 12 subsection (2). 45 Department of Jobs Enterprise and Innovation, Construction Contracts Act 2013, Code of Practice Governing the Conduct of Adjudications (2016). 46 Construction Contracts Act 2013. 47 Malaysia, ‘The Construction Industry Payment and Adjudication Act 2012’ (CIPAA 2012) effective 15 April 2014. Australia, ‘Building and Construction Industry Security of Payment Act’ implemented between 1999 and 2009. New Zealand, ‘Construction Contracts Act 2002’ effective 1 April 2003. Singapore, ‘Building and Construction Industry Security of Payment Act (Cap 30B) 2004’ effective 1 April 2005. Canada, the Ontario State Legislature is currently implementing adjudication ‘The Construction Act’ in stages over 2018/2019. In addition, statutory adjudication has been actively considered in Hong Kong, South Africa and Germany.


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In the development of the Act there was an understanding that ‘the Bill needed to ensure

that the principal relevant provisions contained in the UK Housing Grants, Construction

and Regeneration Act 199648 (as amended) (the HGCRA Act) were replicated in

Ireland’.49 It was stated that ‘the bill’s objective was to streamline matters similarly to

the UK’,50 where ‘our neighbours in the UK have taken the lead on the adjudication

process. Lawyers around the country are going to have to embrace this sensible and

practical process.’51 In the same way as the UK Act is supported by the Scheme, the

Act is supported by the Code of Practice. The Act comprising thirteen pages mirrors

that of Part II, Sections 104 to 117 of the HGCRA at seven pages. Similarly, the Code

of Practice, in support of the Act, at eleven pages is comparable to the Scheme for

Construction Contracts (England and Wales) Regulations 1998, also at eleven pages.

The Act is ‘based very closely on the UK Act(s) and Regulations but has significant

differences’,52 and ‘is not as comprehensive in certain aspects’53. For example, the Act

refers to the reconciliation of ‘payment disputes’54 being limited to disputes involving

payment and in the plural.55 This is in contrast with the UK Act where the equivalent

wording is ‘dispute’ in the singular without subject limitation, a significant difference

which has been referred to as ‘a recipe for satellite litigation’.56 A detailed analysis of

these differences is not the subject of this paper. But it should be noted, that as a result

of these differences the now considerable body of UK case law57 on adjudication has

limited relevance to adjudication in Ireland. Accordingly, ‘The body of precedent that

has developed under the UK model will be instructive in interpreting the 2013 Act, but

no more.’58

48 More correctly called ‘Part II of the Housing Grants, Construction and Regeneration Act 1996 as amended by Part 8 of the Local Democracy, Economic Development and Construction Act 2009’, for the purposes of this dissertation referred to as the UK Act, supported by the ‘Scheme for Construction Contracts (England and Wales) Regulations 1988, amended the Scheme for Construction Contracts (England and Wales) Regulations 1988, (Amendment) (England) Regulations 2011’. 49 n20 at p.2. 50 Seanad Eireann debate, 23 July 2013 – Deputy Brian Hayes. 51 n50 – Senator Catherine Noone. 52 Bond, Dr Brian, Alternative Methods of Resolving Construction Disputes: Is Statutory Adjudication Really the Best Way? (2016), at p. 240. 53 Gibbons, John, ‘Adjudication and the Courts’ (2016), at p. 4. 54 The Act, Section 6(1). 55 The Act, Section 6(9). 56 Coulson LJ, ‘Adjudication: a cheap and cheerful fudge or proportionate decision making on the merits?’ Trinity College Dublin, 14 June 2019. 57 Case law on adjudication in the UK is in excess of 750 cases in 20 years. Cases to support or resist enforcement of adjudicator decisions, becoming more sophisticated over time, could have informed future Irish case law if there had been greater consistency between the Act and the UK Act. 58 n37 at p. 461.


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5. Adjudication under the Act – the first three years

Research for this paper has included consultation with a number of dispute practitioners,

industry representatives and leading academics. The consistent response from this

consultation has been that since the Act came into force ‘there has been relatively low

activity’59 in adjudication in Ireland. In seeking to assess this low activity, data has

been sourced from selected jurisdictions.60 The jurisdictions of Singapore, New

Zealand, Scotland and Wales have been chosen due to the similar size of their

populations, as an indicator of scale of economic activity, to compare how adjudication

has been adopted, or taken up.61 Northern Ireland, with less population than Ireland,

has been included due to its geographic proximity to Ireland and for further comparison.

Appendix A provides data for the adoption of adjudication, through adjudicator

nomination statistics, for the first five years from enactment for each jurisdiction, except

for Ireland being up to three years. As would be expected on the enactment of new

legislation, there were relatively few nominations, and in some cases none, in the first

year of the respective Acts coming into force across all jurisdictions. In the second year

there was a marked increase in activity in some jurisdictions, particularly in Scotland.

The position at the third year, to allow a current comparison with Ireland, is summarised

in the table on page 18. Although the actual nominations for Scotland at year 3, 2000 /

2001, totalled 359, a more recent total of 89 for 2018 has been used for more realistic

comparison. The table includes an adjustment for ‘parties agreed’ nomination, to

provide a sub-total. Finally, in order to determine a more ‘like for like’ basis of

comparison, taking into account the differing size of economies, a further adjustment by

‘population factor’ has been included for Wales and Northern Ireland. The table

confirms that the adjusted average number of adjudicator nominations across all

jurisdictions excluding Ireland is 73. With the inclusion of a 15% allowance, being

double that for the UK, for ‘parties agreed’ nomination in Ireland, the total at 48 is less

than that in the comparable jurisdictions. Using the same calculation for the fourth year

59 n10 at p. 9. 60 In 1998, when the UK Act was enacted, the population for Wales was 2.9m, for Scotland was 5.07m and for Northern Ireland was 1.68m. The population of Singapore in 2005 was 4.26m when adjudication was introduced. The population of New Zealand in 2003 was 3.94m when adjudication was introduced. The population of Ireland in 2016, when the Act came into force, was 4.72m. 61 England with a population of 48.82m in 1998 and Malaysia at 29.17m in 2012 represent significantly larger populations than that of Ireland at 4.72m in 2016, and thus are less relevant.


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provides a comparable average of 98 nominations per annum (see Appendix A). These

results are in contrast to predictions prior to the Act where ‘the consensus was that this

was likely to be in the order of 150 adjudication referrals per annum’.62 The data from

Appendix A, further detailed for ‘like for like’ comparison below, confirms a

comparatively lower level of activity in adjudication in Ireland under the Act.

Nominating ‘Parties agreed’ Sub-total Population Total

boards nomination factor Ireland 42 63 6 64 48 n/a 48

Singapore 50 0 65 50 66 n/a 50

New Zealand 56 5 67 61 n/a 61

Scotland68 89 69 7 96 n/a 96

Wales 41 3 44 44 x 1.6 70 70

Northern Ireland 29 2 31 31 x 2.8 87

Table of comparable nomination data across selected jurisdictions for the third year from enactment, except Scotland

62 Hussey, Anthony ‘Conciliation v Adjudication - Is the tide turning in favour of adjudication’ (2019) 63 The total of 42 nominations for the year to 25 July 2019 comprises the total through the Construction Contracts Adjudication Service (CCAS) at 32 with a further 10 from other nominating boards. See table on page 30 and Appendix A for further detail. 64 Anecdotal evidence confirms an increasing preference for ‘parties agreed’ or by ‘concurrence’ nomination, considered to represent 10% or more of the total adjudication nominations currently undertaken in Ireland. Therefore an allowance of 15%, being twice that of the UK, has been included. 65 All adjudication nominations in Singapore are made through the Building and Construction Authority of Singapore, therefore there are no other dispute board nominations or ‘parties agreed’ nominations. 66 For Singapore in the fourth and fifth years since enactment, the annual total nominations were 91 and 169 respectively. In more recent years Singapore has experienced a significant adoption of statutory adjudication, where in 2016 there were over 500 adjudicator nominations. Chen, Han Toh, ‘Statutory Adjudication in Singapore’. 67 The majority of nominations in New Zealand are made through nominating boards, primarily through the Building Disputes Tribunal at circa 85% of total board nominations since 2012. Circa 10% of all adjudications are ‘parties agreed’ without nominating board appointment, see Appendix A. 68 In 2001, three years after the introduction of Part II of the HGCRA Act 1996, there were approximately 2,000 adjudication nominations throughout the UK, as evidenced by The Adjudication Reporting Centre in conjunction with Glasgow Caledonian University, Report No. 4, January 2002. Approximately 18% of this total originated in Scotland equating to circa 360 nominations. 69 To enable a more ‘like for like’ comparison, the current data for Scotland has been included. In the years 2015 to 2018 the total nominations across the UK has been an average of circa 1,500 per annum where in 2018 Scotland accounted for circa 5.5% of nominations at a total of 89, representing a significant reduction since 2001. Between 4% and 10% of adjudicators appointments in the UK are ‘Parties agreed’ and therefore not appointed by an Adjudicator Nomination Board (ANB), as reported by ‘Construction Dispute Resolution’ in conjunction with the Adjudication Society in Report no. 17, January 2017. Accordingly the nomination data for Scotland, Wales and Northern Ireland includes a ‘Parties agreed’ nomination adjustment of 7.5%. 70 To obtain a more ‘like for like’ comparison the total for Wales at 44 has been multiplied by a population factor of 1.6 to determine a comparative nomination total of 70. In the case of Northern Ireland a population factor of 2.8 has been used to determine a comparative nomination total of 87.


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The adoption of adjudication in Scotland, which was significantly higher in the first

three years after enactment, has now settled at a current level of just under 100

adjudications per annum and is therefore included at this level for realistic comparison.

Given the similar size of population to Ireland and not dissimilar culture, this difference

in total between Ireland and Scotland is of note.

The data for the year ending 25 July 2019 in Ireland has only recently become available,

and it could now be contended that the situation is in the process of changing. The

increase in nominations through the Construction Contracts Adjudication Service

(CCAS), from 9 in the second year to 32 in the third year, indicates a ‘modest but

increasing number of payment disputes being referred’71, where a higher level of

activity is now being established. Although this higher level, starting from a low base,

is still lower than that in the comparable jurisdictions, it is clear that the difference has

notably reduced. If the present trajectory of nomination continues, as detailed in

Appendix A, the level of adjudication activity in Ireland could increase significantly in

the next two to three years, to be comparable with the other jurisdictions.

In considering the future, there is the question: ‘why is there a relatively low level of

activity in adjudication?’ Tony Cunningham, has suggested in commenting on the Act

that, ‘change is usually gradual; it is one thing to change the law; changing the culture is

another thing entirely’.72 Whilst this is acknowledged to be a generalised view, it is

contended that this relatively low level of activity is more complex, such that it is a

matter worthy of further investigation.

6. Why is there a relatively low level of activity in adjudication?

This question forms the core of this paper, where it is contended to result from the

cumulative impact arising from a number of reasons. These reasons can be summarised

as; perception of high cost; doubt regarding enforcement; presence of the Constitution

of Ireland; reluctance to engage in an adversarial process and lack of awareness together

with the availability of other more established dispute resolution methods. Each of

these reasons is elaborated upon and discussed in the following sections of this paper.

71 Bunni, Dr Nael, Annual Report of the Chairperson of the Ministerial Panel of Adjudicators 2019, p.10 72 Cunningham, Tony, The Construction Contracts Act 2013 – An Overview (2017) at p. 37.


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6.1 Perception of high cost

The risk of loss and non-recovery of costs is a continuing theme in dispute resolution,

where parties want to minimise and contain costs wherever possible. In a general

comment on the stress and legal costs in litigation, MacMenamin J commented in

Fitzpatrick v Board of Management of St Mary's School & Anor 73 that there is ‘regret

that some person didn’t shout “stop” and initiate a conciliation process at an earlier

time, which could have avoided months of correspondence, days of litigation, the stress

such litigation brings to the parties and the risk of substantial legal costs’.74

Media headlines such as ‘Legal costs in Ireland are now highest in western world’75,

‘Caveat emptor: The soaring cost of legal services’76 and ‘Law costs blamed for

escalating premiums’77 have created a wider environment where parties in any sphere of

business are reluctant to enter into a situation where legal costs, excessive or otherwise,

are difficult to contain. Whilst these headlines appear sensationalist, it remains the case

that Ireland is the sixth most expensive jurisdiction in the OECD in which to enforce a

business contract.78 Furthermore, a report by the Medical Protection Society in 2014

concluded that ‘legal fees in Ireland are higher than in any of the other 40 countries in

which it operates worldwide, and it puts this down to inefficiency in the Irish legal

system and a lack of transparency in legal costs’.79

Under the Act, ‘each party shall bear his or her own legal and other costs incurred in

connection with the adjudication’.80 Thus a referrer to adjudication has to accept an

unrecoverable level of cost at the outset, and similarly a respondent is also forced to

incur unrecoverable cost in preparing a defence. Evidence from the UK confirms that

circa 35% of disputes referred to adjudication are for values of up to £100,000.81 This

is not dissimilar to Ireland where one approximately third of reported adjudications in

73 [2013] IESC 62. 74 n73. 75 Irish Times, reflecting ‘excessive fees’ in medical cases, 3 January 2018. 76 Irish Independent, in connection with the cost of litigation, 15 October 2017. 77 Irish Times, in connection with personal injury cases arising from traffic accidents, 9 July 2018. 78 The World Bank estimates that the total cost of contract enforcement in Ireland amounts to 26.9% of a claim, compared with 22.1% in the OECD. It also takes longer to enforce a contract in Ireland (650 days) than in the OECD (551). Costs of Doing Business in Ireland 2017, An Chomhairle Náisiúnta Iomaiochas (National Competitiveness Council), June 2017, at p. 54. 79 Medical Protection Society, The Case for Reform, Report, November 2014. 80 The Act at Section 6(15). 81 Milligan, Janey and Jackson, Amy, ‘Adjudicators Fees’, Adjudication Society (2017) and Trushell, Dr J M, ‘Twelve Years in Retrospect’, The Adjudication Reporting Centre (2017), at p. 16.


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2018/2019 have involved sums up to 100,000 euros.82 It can therefore be seen that the

costs for pre-adjudication advice, preparation of the referral submission83 and issue of

the ‘notice of intention to adjudicate’84 can be easily disproportionate to the amount

being claimed. It follows that the necessity to incur high initial cost in adjudication is

further accentuated where claims are of lower values.

There is a ‘tension’ in the nature of adjudication where it is, to all intents, necessary to

develop and at least substantially complete the claim, as the referral,85 prior to the issue

of the notice to adjudicate.86 This tension is borne out of an apprehension that there

may not be another chance to further elaborate or develop the case and it is unlikely that

there will be an oral hearing. As a result the referrer, apart from their own investment in

time and resource, may need to incur the cost of a claims consultant and that of the

consultant team in addition to legal advice, in the expectation that the adjudication will

take place. These costs, together with those for possible further submissions, an oral

hearing and the potential cost of enforcement or challenge following a decision, make

adjudication both a costly and risky course of action, not to be undertaken lightly.

Adjudication in the UK has developed into, and is now perceived as, a legal process,

and there is no reason to think that adjudication in Ireland is considered any differently.

Where adjudication involves a complicated claim, the non-recovery of costs makes it,

with reference to the UK experience, ‘potentially expensive for those embroiled in

complex, high-value disputes. Such disputes are often referred to adjudication, contrary

to what most envisaged when the process was introduced 20 years ago. They require

intensive preparation to meet uncomfortably short deadlines, and do not come cheap.’87

In the UK there is ‘clear evidence in the construction industry of demand for a fresh

approach to using adjudication as a method for resolving disputes.’88 Again in the UK,

the Royal Institute of Chartered Surveyors (RICS) advised in early 2019: ‘Smaller

businesses appear to be disillusioned with the way adjudication has developed into a

82 Bunni, Dr Nael, Annual Report of the Chairperson of the Ministerial Panel of Adjudicators 2019, p.6. 83 The Act at Section 6(5)(b). 84 The Act at Section 6(2). 85 The Act at Section 6(5)(b). 86 The Act at Section 6(2). 87 Akin & Summerrell, ‘Is adjudication worth the cost’, Building Magazine, 4 January 2018. 88 Royal Institute of Chartered Surveyors, ‘News and Insight’, 8 February 2019. Accessed 9 July 2019. https://www.rics.org/uk/news-insight/latest-news/news-opinion/adjudication-for-low-value-disputes/


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process that is often inordinately complicated and expensive. Some even argue that

adjudication is no longer fit for purpose. Lawyers and experts have got involved and

costs have increased.’89 But, in defence of the legal profession in Ireland, Anthony

Hussey has recently advised that in his experience as an adjudicator, ‘lawyers have only

dealt with jurisdictional and contractual issues’90 and as a result ‘the legal fees have

been relatively modest’.91

The concern about rising costs is not new. It was advised as far back as 2013 that in the

UK ‘adjudicator’s fees have massively increased because of the time involved in

reading masses of lawyer driven documentation’.92 At this time it was further thought

that adjudication was ‘high speed with highly competent construction lawyers arguing

in very sophisticated terms’.93 Later in 2017, it was suggested, with reference to the UK

Act, ‘Its stated aim to enable parties to take any dispute to adjudication at any time has

not translated into practice as the vast majority of disputes are initiated post-practical

completion. It has become an expensive process.’94

The UK Department for Business, Energy and Industrial Strategy is now investigating

the extent ‘of real and potential problems for SME’s who say they cannot afford to

adjudicate’.95 I would suggest that there is no reason that small contractors and sub-

contractors in Ireland do not share the same concerns as their counterparts in the UK,

namely a fear of throwing ‘good money after bad’, thus resulting in a reluctance to

adopt adjudication as a mainstream method to resolve disputes.

6.2 Doubt regarding enforcement

Notwithstanding the relatively low level of activity in adjudication in Ireland since the

commencement of the Act, it is noteworthy that there has been no challenge or request

to enforce the decision of an adjudicator through the courts96 in the first three years

since the Act came into force.

89 n88. 90 n62 at p. 7. 91 n62 at p. 7. 92 Bingham, Tony, ‘Unintended consequences – 15 years of high speed dispute adjudication and its impact’ (2013), at p. 11. 93 n92 at p. 12. 94 n82 at p. 18. 95 n88. 96 Barniville J, at the CIArb Ireland AGM April 2019, advised that one challenge to an adjudication decision had reached the court list in late 2018, but was withdrawn, assumed to have been settled.


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In the present absence of Irish jurisprudence on enforcement or challenge97, it is worth

noting that the first challenge to an adjudication decision in the UK was in February

1999, nine months after enactment of the UK Act. In Macob Civil Engineering Ltd v

Morrison Construction Ltd, 98 Dyson J advised that ‘Parliament has not abolished

arbitration and litigation of construction disputes. It has merely introduced a

provisional stage in the dispute resolution process. Crucially it has made clear that

decisions of adjudicators are binding and are to be complied with until the dispute is

finally resolved.’99 At this point ‘the question of the enforceability of an adjudicators’

decision in the UK was put beyond doubt’.100

In the following UK case of Bouygues (UK) Ltd v Dahl-Jensen (UK) Ltd 101 Dyson J

stated that ‘injustices will occur, because from time to time, adjudicators will make

mistakes. Sometimes those mistakes will be glaringly obvious and disastrous in their

consequences for the losing party.’102 It has been commented that ‘The concept of

temporary finality and the practice of enforcing a decision which is almost certainly

wrong are counter-intuitive to many judges.’103 In a further establishment of the

enforcement policy, Chadwick J in Carillion Construction v Devonport Royal Navy

Dockyard 104 advised that ‘The need to have the ”right” answer has been subordinated to

the needs to have the answer quickly.’105

It has been commented that a policy based on the rubric of ‘pay now - argue later’106 is

cold comfort. Being able to argue later is ‘of little practical consolation to an Employer

ordered to pay a disputed sum wrongly decided by an Adjudicator to be due to a

Contractor, given the expense of arbitration or litigation and the financial frailty of

many Contractors’.107

97 I have been advised that one adjudication decision at the end of 2018 has been subject to seeking enforcement under Section 6(11) of the Act through an action of law, namely by issue of a ‘winding- up-petition’ under Section 569(d) of the Companies Act 2014. Although the defendant submitted this was an ‘abuse of process’, a final settlement was reached prior to hearing, as discussed with Gerard Meehan, 20 August 2019. 98 [1999] EWHC Technology 254. 99 n98. 100 Riches, John and Dancaster, Christopher, Construction Adjudication, (2004) at p. 4. 101 [2000] BLR 522. 102 n101. 103 Coulson, Sir Peter, Coulson on Construction Adjudication, 3rd Edition at p. vii. 104 [2005] EWCA Civ. 1538. 105 n104. 106 Ackner, Lord, in the House of Lords, Hansard (HL debates), Vol 571, 989 - 990 (2013). 107 Atkin Chambers, Hudson’s Building and Engineering Contracts, at paragraph 11-002.


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Could the courts in Ireland countenance the ‘uncritical rubber stamping of decisions, in

some cases in the face of fundamental and obvious error?’108 Further, will the courts in

Ireland be willing to adopt ‘the doctrine of unreviewable error of an adjudicator within

jurisdiction’,109 and accept that confidence in the process of adjudication could be

‘undermined by a policy of refusing to look at the correctness of the decision?’110 In

this regard, Anthony Hussey advises that ‘it is unlikely that an Irish court will feel the

same sense of obligation, as have the courts elsewhere, to uphold an adjudicator’s

decision, which is clearly incorrect on the face of the document’.111

It is interesting to note that Clarke J has previously commented that ‘it may well be that

the effectiveness, or otherwise, of the 2013 Act may turn out to be as much about trust

as about its precise legal consequences’.112 Clarke J further advised that ‘Parties must

ultimately get to trust the process as being both fair and delivering as good a resolution

as they are likely to get in any other way’.113 Is it possible that the Irish courts ‘will

summarily enforce decisions that are likely to lead to injustice’?114 There is perhaps

good reason to think ‘that the Irish courts may take a different view’.115

One further important difference between the Act and its UK counterpart is that in the

latter ‘adjudication arises as an implied term of the contract between the parties.’116 In

contrast, ‘adjudication under the 2013 Act is a statutory power and, therefore, subject to

judicial review,’117 because ‘decisions may be made by the chair appointed by the

Minister...in respect of the appointment of adjudicators to the panel’.118 But ‘the real

issue is whether the adjudicator’s decision itself is subject to such a review’.119

108 Allen, Senan SC, ‘Argue now, pay later? Challenges to the enforcement of adjudication decisions’, paper presented at the Construction Law Conference, 5 July 2014 at p.5. 109 n103 at p. 199 note 2. 110 n108 at p. 5. 111 n7 at p. 185. 112 Clark, Frank J, ‘Adjudication - The Role of the Courts’ (2014) at p. 1. 113 n112 at p. 2. 114 n108 at p. 5. 115 n108 at p. 5. 116 Burr, Andrew, International Contractual and Statutory Adjudication (2017), at p. 214. 117 n37 at p. 471. 118 n7 at p. 113. 119 n7 at p. 113.


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‘It is thought likely that the Irish Courts will decide that the parties are entitled to seek

judicial review in principle to an adjudicator’s decision’120 at some point, but it is not

known if an ‘error on the face of the record would be excluded from such review.’121

There are other points of detail within the Act that give rise to doubts about enforcement

which are beyond the remit of this paper. However, in the absence of jurisprudence

there remains an inherent risk in the process of adjudication in both time and cost. It is

to be expected that ‘parties to adjudication are likely to be reluctant to be one of the first

to challenge enforcement of an Adjudicator’s decision in the High Court, given the

uncertainties involved in terms of how the Court might deal with such matters’.122 It is

clear that ‘without a robust procedure for enforcement being put in place the

effectiveness of the adjudication process is in jeopardy’.123 I would suggest that the

uncertainty surrounding the enforcement of an adjudicator’s decision is a contributing

factor in the relatively low level of activity in adjudication.

6.3 Presence of the Constitution of Ireland

The Constitution of Ireland has been asserted by Anthony Hussey as representing ‘the

elephant in the room, in so far as the Irish Act is concerned’.124 Through the

Constitution of Ireland, ‘The State guarantees in its laws to respect, and, as far as

practicable, by its laws to defend and vindicate the personal rights of the citizen.’125 In

addition, ‘The State shall, in particular, by its laws protect as best it may from unjust

attack and, in the case of injustice done, vindicate the life, person, good name, and

property rights of every citizen.’126

These provisions can be summarised as ‘(1) the opportunity to know the case being

made against one’127 and ‘(2) the opportunity to be heard and to make one’s own case in

response.’128 In Eurofood IFSC, Re129, Fennelly J stated ‘The principle of fair

procedure in all judicial and administrative proceedings is, in Irish law, a principle of

120 n7 at p. 114. 121 n7 at p. 114. 122 Bradley, Amy, ‘The Construction Contracts Act 2013 – Tales from the trenches’, 21 February 2019. 123 n7 at p. 186. 124 n7 at p. 3. 125 Constitution of Ireland 2018, Article 40.3.1, Fundamental Rights, Personal Rights, at p.154. 126 n125 at p. 154. 127 Brady, Paul, ‘Statutory Adjudication and the Constitution’ (2014), at p. 5. 128 n127 at p. 5. 129 [2004] 4 IR 370.


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public policy of cardinal importance. It derives both from the rules of natural justice

and the common law and from constitutional guarantees of personal and individual

rights.’130

The courts in the UK ‘have robustly supported adjudication to the extent of enforcing

decisions that were manifestly incorrect’.131 But ‘one has to remember, in comparing the

Irish situation with the UK situation, that there is a constitutional backdrop in Ireland

which does not have a parallel in the UK’.132 If the Irish courts were not to accept a

similar principle, in so much as being ‘required to look more closely at the manner in

which the adjudication procedure was operated by reason of constitutional

constraints’133, where then would the line be drawn? Senan Allen SC advises, ‘that it

remains to be seen to what extent the Irish courts may be willing to see the innocent

hang to ensure the guilty do not escape’.134

However, the primary difficulty for the Irish courts may be the protection of the

‘constitutional right to have issues of fact in dispute tested through oral evidence and

cross examination’.135 Adjudication under the Act works to a strict default timescale of

28 days, where if that entitlement were to be ‘assiduously applied, it may be possible for

a respondent to render the whole process incapable of practical application’.136 This

protection of the right to an oral hearing and cross examination has been confirmed

through a succession of judgments: Gallagher v Revenue Commissioners137 then later in

Lyons & Murray v Financial Services Ombudsman138, O’Neill v Financial Services

Ombudsman,139 and Carty-Doyle v Financial Services Ombudsman.140

As a result, it could be contended that ‘if a conflict of facts makes an oral hearing

necessary, the adjudicator must direct that such a hearing be held, even if neither party

has requested it’.141 Past commentary about the impact of the Constitution of Ireland on

130 n129. 131 n7 at p. 3. 132 n112 at p. 3. 133 The Law Society of Ireland, ADR Guide 2018, at p. 26. 134 n108 at p. 4. 135 n7 at p. 3. 136 n7 at p. 3. 137 [1995] 1 IR 55 138 [2011] IEHC 454. 139 [2014] IEHC 282. 140 [2014] IEHC 352. 141 n116 at p. 214.


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adjudication was provided by Clarke J in stating: ‘this is not just a matter of statutory

construction or a matter of whatever guidance may be given in respect of the statutory

regime by ministerial order. It is a matter of constitutional law in Ireland. That is

something that does not apply in the UK and, therefore, I do not think it can be assumed

that the precise way in which the Irish courts will approach issues arising out of

adjudication will be identical to the way in which similar questions might be

approached in the UK.’142

Anthony Hussey has commented that ‘constitutionally, this legislation skates on thin

ice’143 in seeking to balance the ‘right to fair procedures, namely its inquisitorial nature,

and its tight time frame’.144 It is not known at this point ‘what type of procedures are

required if construction adjudication is to be conducted in a constitutionally compliant

manner’.145 It is likely that guidance on the relationship between the statutory right to

adjudicate and the Constitution of Ireland will be determined by the Irish courts in due

course. However, it is contended that this lack of guidance presently casts doubt on

adjudication as a preferred dispute resolution process.

6.4 Reluctance to engage in an adversarial process and a lack of awareness

The past three years, since the Act came into force, have witnessed an Irish economy

with a positive outlook where the contractors who survived the previous dramatic

contraction in the economy are primarily concerned with ‘making up lost time, and

concentrating on the work to be done’.146 It is not coincidental that in such a depleted

sector there has been little appetite for the new approach of adjudication in resolving

disputes, when the more established and familiar methods of mediation and conciliation

are available. In construction where conciliation is firmly established and where

adjudication provides a relatively new alternative, there now seems to be an emerging

consensus that each method has its own merits. Anthony Hussey suggests that

conciliation will ‘continue to be used in those disputes where the parties wish to

preserve a good relationship’.147 With regard to adjudication, Hussey adds that in his

experience it is used where the claimant and respondent are unlikely to ‘do business

142 n112 at p. 3. 143 n7 at p. 186. 144 n127 at p. 7. 145 n127 at p. 7. 146 As discussed with Siobhan Fahey, 8 April 2019. 147 n62 at p. 9.


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with one another again.’148 For this reason it is not surprising that conciliation, with its

more flexible and consensual attributes, has been more popular than adjudication, where

the maintaining of a continuing relationship between the parties is an important

consideration. From a considerably reduced base, where there is a much reduced

workforce of people employed in the construction sector, it is still an industry where

‘everyone knows everyone else’ and where the principals of the larger companies will

be well known to each other. One leading industry representative Jim Curley advised

that ‘adjudication is seen as a last resort, where usually the first step in a dispute will be

a meeting between principals and then possibly conciliation, adjudication would rarely

be considered’.149

Despite a publicity campaign at the enactment of the Act in 2016, ‘apart from possibly

the 50 largest contractors, there are many who are not aware of the Act and many who

ignore its requirements’.150 Similarly, whilst the largest advisory firms, such as lawyers

and surveyors, will have a working knowledge of the Act, anecdotal evidence suggests

that many smaller firms lack a familiarity151 with its provisions. The preferred solution

appears to be negotiate in the first instance, and if necessary mediate or conciliate a

settlement. These more consensual alternatives are deemed more effective than what is

seen to be the more aggressive pursuit of adjudication, in order to resolve disputes.

6.5 Availability of other more established dispute resolution methods

Adjudication was firmly recommended in England and Wales through the Latham

Report of 1994,152 where it was advised that ‘Adjudication should be the normal method

of dispute resolution’153 which was then later established through the HGCRA in 1998.

It is noteworthy that a similar Government report in Ireland in 1997,154 three years after

the Latham Report, concluded that conciliation was preferred to adjudication for the

resolution of construction disputes. Thus 1997 marked a divergence in dispute

148 n62 at p. 9. 149 As advised at a meeting with Jim Curley, Group CEO, Jones Engineering, 21 June 2019. 150 n149. 151 But this could now be changing - at a recent industry conference, ‘Construction Contracts Act 2013 – Three Years On’, 15 July 2019, a ‘show of hands’ indicated that circa 80% of the delegates were from a main contractor or subcontractor background. 152 Latham, Sir Michael, Constructing the Team: Joint Review of Procurement and Contractual Arrangements in the United Kingdom Construction Industry, Final Report (1994). 153 n152 at p. viii. 154 Department of the Environment, Strategic Review Committee, Building Our Future Together: Strategic Review of the Construction Industry, (1997) Stationery Office.


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resolution policy between Ireland and the UK. With the benefit of Government support

through the Public Works Contract PW-CF1, ‘the Irish construction industry has, for

approximately the past 20 years, relied on conciliation to resolve its disputes and only a

small number of disputes have been referred to arbitration’.155 In 2008, ten years after

the introduction of the HGCRA in the UK, a report from the Irish Law Reform

Commission highlighted the success of the established methods of mediation and

conciliation for dispute resolution in Ireland. The report provided 50 recommendations

for Alternative Dispute Resolution (ADR) improvement, where none of these

recommendations identified adjudication as a possible ADR method.156

This divergence in policy was further illustrated in a survey in 2010,157 six years prior to

the enactment of the Act, which advised that the preferred methods of resolving

construction disputes were Mediation 52%, Conciliation 45% and Arbitration 3%. It

should be noted that the survey quotes a ‘preferred’ method, where it is possible that

some of the respondents could have been answering a hypothetical question, without the

direct experience of any method. The survey nonetheless identified a high preference

for a consensual approach to dispute resolution through mediation and conciliation,

rather than an imposed resolution through arbitration.

Conciliation gained further support in 2010 when Ireland adopted in full the Model Law

of the United Nations in which conciliation is embraced.158 In 2013 a survey by the

Centre for Effective Dispute Resolution (CEDR) Ireland advised: ‘In terms of the

overall uptake in mediation, it is interesting to note that mediations have increased by

739% from 2003 to 2012.’159 Whilst this is a national survey across all industry sectors

there is no reason to believe that mediation in construction disputes would not also have

experienced a significant rise in activity during this time. To determine the relative

prevalence for the primary dispute methods of Mediation, Conciliation, Adjudication

and Arbitration in 2018/2019, a brief statistical enquiry was issued to the primary

155 n52 at p. 240. 156 Irish Law Reform Commission, Alternative Dispute Resolution (Consultation Paper) 2008, at p. 351. 157 Irish Law Reform Commission, Report on Alternative Dispute Resolution: Mediation and Conciliation (2010), undertaken by the Construction Industry Confederation, at p. 150. 158 UNCITRAL, Model Law on International Commercial Conciliation with Guide to Enactment and Use 2002 (United Nations 2002), at Article 6(4). 159 CEDR Ireland, ‘The Mediation Audit’ 2013, at p. 3.


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Dispute Resolution Boards160 responsible for nomination in Ireland. The enquiry

requested data on the number of nominations for each dispute method in the 12 months

to 25 July 2019. The enquiry was made to coincide with the third anniversary of the

Construction Contracts Act 2013, thus providing a useful ‘snap shot’ of dispute

resolution nomination, according to resolution method, in Ireland at mid-2019. The

data from this ‘snapshot’ survey is included in the table below.

Mediation Conciliation Adjudication Arbitration

Construction Industry 12 10 6 5 Federation161 Chartered Institute of 1 1 2 0 Arbitrators162

Society of Chartered 1 2 1 0 Surveyors of Ireland163 Royal Institute of the 1 20 1 2 Architects of Ireland164 Engineers Ireland165 2 1 0 0 Construction Contracts 0 0 32 0 Adjudication Service166 Totals 17 34 42 7

Table of dispute resolution nomination / appointment167 from the primary Dispute Resolution Boards for 2018 / 2019.168 169

160 The Dispute Resolution Boards, as a primary source for the nomination of construction dispute Practitioners, are the Construction Industry Federation (CIF), Chartered Institute of Arbitrators (CIArb), Society of Chartered Surveyors of Ireland (SCSI), Royal Institute of the Architects of Ireland (RIAI), Engineers Ireland (EI), and the Construction Contracts Adjudication Service (CCAS). 161 Data from the Construction Industry Federation (CIF), 28 August 2019. 162 Data from the Chartered Institute of Arbitrators (CIArb) Ireland Branch, 5 September 2019. 163 Data from the Society of Chartered Surveyors of Ireland (SCSI), 1 August 2019. 164 Data from the Royal Institute of the Architects of Ireland (RIAI), 23 August 2019. 165 Data from Engineers Ireland, 20 August 2019. 166 Data from the Construction Contracts Adjudication Service (CCAS), 23 August 2019. 167 The term ‘nomination’ is used for Mediation, Conciliation and Adjudication, but more correctly for Arbitration the term ‘appointment’ should be adopted. For example, to reflect appointment by the President of the RIAI in default of party agreement under the Arbitration Act 2010. 168 For the 12 month period - 26 July 2018 to 25 July 2019, being the third anniversary year from the enactment of the Construction Contracts Act 2013. 169 The Law Society of Ireland made no construction dispute nominations in 2018 / 2019, July 2019.


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The data for conciliation and mediation nomination, as an indicator of trend or activity,

should be treated with caution as both these methods benefit from a high level of ‘party

agreed’ and prior nomination through contract, as confirmed by the Construction

Industry Federation (CIF).170 For example it is mandatory under the Public Works

Contract PW-CF1 that a standing conciliator is appointed for all contracts with a value

in excess of 10m euros.171 These figures would not be included in the data, but this is

still consistent with conciliation being acknowledged as currently the most common

method of dispute resolution in the construction industry, see p.31 at note 175.

The high occurrence of conciliation nomination by the RIAI reflects the guidance and

stated preference for this method through the standard RIAI contract. However, the

most notable conclusion from the data is the relative increase in prevalence of

adjudicator nominations for the current year. Nomination through the Construction

Contracts Adjudication Service (CCAS) in 2018/2019 at 32 in total is in sharp contrast

to the total of 9 in 2017/2018. This point, discussed further in the previous section, may

indicate the beginning of a preference in favour of adjudication in the future.

Mediation is recognised to be the most prevalent of the dispute resolution methods for

all disputes in Ireland outside of the construction industry, being supported by the

Mediation Act 2017 which came into force on 1 January 2018. The objective of the

Mediation Act is to ‘promote mediation as a viable, effective and efficient alternative to

court proceedings, thereby reducing legal costs, speeding up the resolution of disputes

and reducing the disadvantages of court proceedings’.172 Commenting on mediation in

Ryan v Walls Construction173 Kelly J said: ‘whilst it is not a panacea, it has proven to be

very beneficial and it has succeeded in bringing about settlements of seemingly

intractable disputes.’174

In Ireland conciliation, as a method for resolving construction disputes, in use for over

twenty years, has been remarkably successful with Anthony Hussey commenting in

170 As advised at a meeting with Martin Lang, Director CIF, 20 May 2019. 171 In the current form of Public Works Contract (PW-CF1 2018) Tender and Schedule it is mandatory to appoint a standing adjudicator for a contract value in excess of 10 million euros. 172 n132 at p. 10. 173 [2015] IECA 214. 174 n173.


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2019, ‘As of this moment in time conciliation is far more popular than adjudication.’175

A survey by Dr Brian Bond in 2013/2014 found that ‘only 3 per cent of disputes which

were referred to conciliation remained unresolved and had to be referred to arbitration

(or abandoned)’.176 The survey confirmed a ‘high proportion of disputes being resolved

by agreement – an outcome which is unobtainable in adjudication, arbitration or

litigation, all of which can only result in an imposed settlement’.177

In Ireland ‘construction conciliation is a unique form of ADR fundamentally different to

mediation. The essential difference is that, if the conciliator is unable to facilitate a

settlement between the parties, he/she must then issue a recommendation that will be

binding upon the parties unless rejected by either of them within the prescribed time.’178

This binding option, unless agreed or otherwise rejected, means in effect that ‘the

conciliator’s recommendation has now become an adjudicator’s decision’.179

The objective of conciliation is to provide a quick and inexpensive result that is

consensual rather than adversarial and ‘of greatest importance, is to achieve an agreed

settlement if this is possible. An agreed settlement is the best outcome to any

dispute’,180 where on this basis it is likely that ‘conciliation will continue to be used in

those disputes where the parties wish to preserve a good relationship.’181 It is contended

that as a result of this critical difference, conciliation continues to be preferred to

adjudication, and also arbitration, in dispute resolution.

7. The view of the Construction Industry Federation (CIF)

The construction industry in Ireland is represented by the Construction Industry

Federation (CIF). Established in 1935, the CIF provides coordinated representation to

its circa 1,500 members. The membership comprises sole traders to national main

contractors throughout Ireland, where the federation seeks to ‘ensure the most effective

and efficient public affairs interface of the industry’.182 The CIF provided the

175 n62 at p. 9. 176 n52 at p. 245. 177 n52 at p. 245. 178 n132 at p. 31. 179 n52 at p. 243. 180 n52 at p. 244. 181 n62 at p. 9. 182 Construction Industry Federation (CIF), Annual Report 2015, at p. 28.


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coordinating expertise, with the assistance of Professor Rudi Klein, to support Senator

Feargal Quinn in bringing the Act to its enactment. Through its breadth of

representation, the nature of its activities and its organisation profile the CIF is the most

influential construction industry body in Ireland.

One of the services the CIF extends to its members is dispute resolution, where the

federation maintains a panel of industry specialists across the full spectrum of dispute

resolution methods. The CIF facilitates a significant number of dispute procedures

where the majority are conducted through either mediation or conciliation183 primarily

through ‘party agreed’ nomination. Despite the presence of both the Act and the

Arbitration Act 2010, only a small proportion of the total procedures facilitated by the

CIF are through adjudication and arbitration.184

Whilst being wholly supportive of the Act, the stated priority of the CIF is to provide

value at optimal levels of cost for its members, where the federation actively encourages

mediation and then conciliation.185 This preference is achieved through a support for

dispute escalation clauses in standard forms of contract, being generally less adversarial

and more efficient in terms of resource and cost.

Consistent with other authorities in the industry, the CIF recognises that the Act could

be further refined. In keeping with its representative role, the CIF has identified and is

actively pursuing amendments186 to further improve the effect of the Act through

consultation with Government. The view of the CIF, in seeking an early and non-

adversarial approach to resolving disputes, is reflected by the leading construction

companies in Ireland where imposed dispute resolution proceedings through

adjudication and arbitration, are considered least preferred and used only as a last

resort.187

183 n170. 184 As advised at a meeting with Martin Lang, Director CIF, 20 May 2019. With a policy of promoting mediation and conciliation, it is of note that adjudication and arbitration comprised respectively 20% and 15% of the total CIF nominations for the year 2018/2019. 185 n170. 186 n170. 187 n149.


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8. Adjudication and the standard forms of construction contract

A measure of adoption or use of adjudication through the Act is its support and

reference within the standard forms of construction contract used in Ireland. The most

commonly used forms in the private sector are the Royal Institute of the Architects of

Ireland (RIAI) standard forms,188 of which there is a full suite. In the public sector the

most prevalent form is the Public Works Contract PW-CF1,189 again in a full suite, for

use in projects commissioned by Government Departments and Local Authorities. Gas

and water infrastructure projects are often procured using a bespoke contract, the Irish

Water Major Works (IWMW) form. There are a limited number of state projects that

utilise the New Engineering Contract (NEC) and the Fédération Internationale Des

Ingénieurs-Conseils (FIDIC) forms, but these are considered to be the exception.

The RIAI form (see Appendix C) makes no reference to adjudication, other than to

advise that ‘the parties should enter into conciliation to resolve such dispute before

recourse to Statutory Adjudication or Arbitration’.190 It is interesting to note that

‘should’, rather than ‘shall’, is probably as far as parties can be directed without being

in contravention of the right to adjudication at ‘any time’191 as provided by the Act. The

RIAI form actively promotes conciliation, advising that its adoption has ‘led to a

significant success rate for the process’.192

Parties are advised to refer to the RIAI Conciliation Guidelines & Procedures (CGP) in

detailing four further provisions, (A) to (D).193 Provision (B) provides that ‘If neither

party rejects the Recommendation in writing within 10 working days’, it then ‘shall be

deemed to be as agreed as a legally binding enforceable settlement.’194 Accordingly,

conciliation with consensus as a fundamental tenet, and high likelihood of resolution, is

considered more attractive than the imposed decision nature of adjudication.

188 Royal Institute of the Architects of Ireland (RIAI) RIAI’s Agreement and Schedule of Conditions of Building Contract (2017). 189 Office of Government Procurement, Public Works Contract PW-CF1 for Building Works Designed by the Employer (2018). 190 n188 at Clause 38(a)(i). 191 The Act at Section 6(2). 192 Royal Institute of the Architects of Ireland, Conciliation Guidelines & Procedures, September 2016 Edition, at p. 1. 193 n192 at p. 7. 194 n192 at p. 7.


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The Public Works Contract PW-CF1 (see Appendix D) places emphasis on a Project

Board which ‘shall meet at least every 60 days to review disputes’,195 where ‘either

party may refer such unresolved disputes to conciliation’.196 The contract provides that

‘if the dispute is not resolved by agreement within 42 days after the conciliator was

appointed’,197 then the ‘conciliator shall give both parties a written recommendation.’198

If neither party gives notice of dissatisfaction within 42 days after receiving the

conciliator’s recommendation it shall be conclusive and binding.199

By way of language, the contract contains some unfortunate drafting that is potentially

confusing where ‘the parties shall jointly appoint a conciliator who is competent to

adjudicate upon the dispute’.200 Further potential for confusion is evidenced where ‘In

the event no decision is reached by the adjudicator, the parties may continue to resolve

the dispute under the dispute management procedure or conciliation from the date the

dispute was referred to Adjudication.’201 It is contended that having appointed an

adjudicator it is highly unlikely that a decision would not be reached. It is, however,

clear that this standard form places emphasis on conciliation being the preferred dispute

resolution method, being consistent with current government policy.

The Irish Water Major Works (IWMW) form of contract, see Appendix E, provides for

reference to adjudication, advising that ‘where any such dispute has not been finally

resolved by agreement of the parties, either party may refer it to mediation using the

Engineers Ireland Mediation Procedure 2011 after the adjudication has been

concluded’.202 It appears that there is some misunderstanding in the operation of

adjudication, as any decision following reference will have already been imposed on the

parties. Thus, it is likely that nothing would be gained by the parties proceeding to

mediation after the adjudication concludes on the basis that such ‘dispute has not been

finally resolved by agreement of the parties’, as there would be little obvious benefit for

the successful party to then enter into mediation.

195 Public Works Contract PW-CF1 form at Clause 13.1.2(1). 196 n195 at Clause 13.1.2(2). 197 n195 at Clause 13.2.8. 198 n195 at Clause 13.2.8. 199 n195 at Clause 13.2.10. 200 n195 at Clause 13.2.2. 201 n195 at Clause 13.3.3. 202 The Irish Water Major Works (IWMW) form at Clause 11.8.2.


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It could be concluded that the reference to and support of the Act is inconsistent across

the standard forms, thus contributing to a potential reluctance by parties to fully

consider and adopt adjudication as a preferred dispute resolution process.

9. What of the primary objective of the Act and adjudication?

In considering its effect it is important to view the Act as a whole body of legislation,

where adjudication is but part.203 The adjudication provisions under the Act, discussed

in the earlier sections, are facilitative to the primary objective of regulating payment

which if undertaken correctly then avoids the necessity, for those it is meant to protect,

of having to consider adjudication.

There is strong anecdotal evidence to support an improvement in payment practices and

a more professional approach to the payment process,204 as a direct result of the Act. It

has been commented that the Act has had the effect that most competent contractors

now ensure that a paper trail is established so that action can be taken if needed, where

the threat of action under the Act is almost always sufficient to ensure prompt

payment.205

It is of note that leading dispute resolution practitioner Kevin Kelliher has reported the

issue of ‘Notice of intention to adjudicate’ eleven times in the first six months of 2019,

all of which being on behalf of sub-contractors against main contractors. Of these

eleven notices, ten cases were settled on receipt of the notice with only one case

proceeding to adjudication.206 Of those disputes that proceeded to a reported

adjudication207 in 2018 / 2019, two thirds were instigated by subcontractors against

main contractors.208 These statistics would seem to confirm that the threat of, and if

necessary following action under the Act is having effect in protecting those the Act

was meant to safeguard, namely subcontractors.209

203 A point discussed at a meeting with Niav O’Higgins, 18 April 2019. 204 n149. 205 n149. 206 As advised by Kevin Kelliher ‘Representing the referring Party in Adjudication’, 15 July 2019 at p11. 207 As reported to the Construction Contracts Adjudication Service (CCAS) for the purpose of statistics. 208 Bunni, Dr Nael, Annual Report of the Chairperson of the Ministerial Panel of Adjudicators 2019, p.5. 209 Kevin Kelliher further advised that in the year 2018, ‘Notices of intention to adjudicate’ were issued on 15 occasions for subcontractors against main contractors with a further two notices for main contractors against employees, 28 August 2019.


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Likewise the banning of ‘pay when paid’210 clauses through the Act represents a

significant change in payment practices and increased security of payment and cash

flow for smaller subcontractors. Whilst there is still evidence of bad practice in

payments, there has been no corresponding rapid take-up of adjudication as was

experienced in Scotland after the introduction of the UK Act. As a result the past lack

of activity in adjudication appears to indicate that, in assisting to regulate payments, the

Act is having a positive impact, and thus could be said to bear witness to the success of

the Act as a whole.

It could be argued that, despite the surrounding doubt, the absence of cases to challenge

or enforce adjudication decisions coming before the court is a further mark of success

for the Act. Indeed, if the Act serves to encourage parties to commit more fully to a

negotiated outcome for disputes and avoid adjudication, or other alternatives, it could be

contended that the relative low activity in adjudication is fully commensurate with the

primary objective of the Construction Contracts Act, namely to ensure prompt cash

flow.

However, the industry considers that it is presently in an upward cycle where issues of

lack of on-time payment are not so prevalent and ‘the low incidence of payment

disputes is perhaps not surprising’.211 If the market were to change to a downward trend

then the mechanisms for securing payment through the Act may become more relied

upon ‘where payment vulnerability may once again feature as an area of concern to

subcontractors’.212

But there may be ‘ill winds’ gathering that have yet to impact on the construction

industry in Ireland. It is noteworthy that, despite an overall positive economic outlook,

‘at least 42 Irish construction companies have gone into liquidation or examinership’213

in the first six months of 2018. The CIF has recently stated that the practice of ‘lowest-

cost tendering is encouraged by the current public procurement process and has resulted

in an industry wide race to the bottom’.214

210 The Act, at Section 3(5). 211 n10 at p. 8. 212 n10 at p. 8. 213 ‘www.globalconstructionreview.com/news/42-companies-bust-construction-insolvency-epidemic/’ Accessed 11 June 2018 214 Lang, Martin, ‘A race to the bottom’, Plumbing and Heating Magazine, 7 October 2018.


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A recent ‘survey by one of Ireland’s largest contractors revealed margins averaging 1.0

to 1.5% across the Irish Industry compared to an EU sector norm of 5%,’215 prompting

the CIF President, Tom Parlon, to advise Government that this is an ‘issue threatening

construction jobs and the completion of public sector construction projects’.216

In 2019 the Irish SME Association (ISME) reported that the ‘manufacturing and

construction sectors are waiting longest on payment; an average of 63 and 69 days

respectively’.217 This extended period is in sharp contrast to the provisions of the Act

which states: ‘The date on which payment is due in relation to an amount claimed under

a construction contract shall be no later than 30 days after the payment claim date.’218

In the same ISME report, the CEO Neil McDonnell advised: ‘Cash flow certainty is a

key feature of sustainable business. Failure by businesses to pay each other on time has

a knock-on effect on productivity, development and growth.’219 It appears that

notwithstanding the establishment of prompt payment provisions220 through the Act, the

continued delay of payment in some quarters is still creating difficulty in the industry.221

The Act appears to have encouraged contractors to establish a comprehensive audit trail

as part of the overall payment mechanism for projects and to avoid adjudication.

However, the past effect of the Act should be considered in an overall context of

economic recovery as a priority. The relatively low level of adjudication activity could

be attributed, at least in part, to the presence of the Act in encouraging prompt payment

in order to maintain cash flow in an industry. But should the economic climate change,

where outside factors such as Brexit loom large together with the present risk of a wider

downturn in the world economy, adjudication under the Act could become more

important and thus more common in the near to medium term future.222

215 ‘www.globalconstructionreview.com/news/42-companies-bust-construction-insolvency-epidemic/’ 11 June 2018 216 Sunday Independent, Business section ‘Construction sector hit with ‘epidemic’ 10 June 2018. 217 Irish SME Association, quarterly ‘Credit Watch survey Q3’18’, 3 January 2019. 218 The Act, Schedule, Section 3. 219 Irish SME Association, ‘Credit Watch survey Q3’18’, 3 January 2019, at p. 1. 220 In Ireland, where Carillion had a 100 million euros contract to build five schools, before insolvency, the standard payment terms for subcontractors was 120 days, but with agreement to a discount, payment could be made earlier, Irish Independent, 13 May 2018. 221 John Sisk, the largest building contractor in Ireland, was recently removed from the Prompt Payment Code (a list of approved companies that is maintained by the UK Government) for failure to meet the required standard of payment of 95% of suppliers within 60 days, Irish Times, 2 May 2019. 222 Trushell, Dr J M, ‘Twelve Years in Retrospect’, The Adjudication Reporting Centre, (2017) advises that in the UK there appears ‘to be an inverse correlation between the number of referrals with the value of construction output each year’. at p. 17. Thus in a downturn referrals are likely to increase.


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Conclusion – What has happened and where next?

What has happened?

The Construction Contracts Bill 2010 introduced on 12 May 2010, took a period of a

further six years to be brought into force as the ‘Construction Contracts Act 2013’

through the Commencement Order of the Minister with effect from 25 July 2016.

During this time the proposed legislation undoubtedly lost some of its momentum,

where the wider priority of the nation was to recover from the impact of the Global

Financial Crisis. Now some three years after its commencement it is clear that the

adjudication provisions of the Act have not been taken up by the industry as expected.

This relatively low level of activity is all the more apparent when compared with the

continued high profile of adjudication having been introduced in the UK, initially with

the HGCRA 1996 and subsequently amended through the LDDCA 2009, as the primary

method of dispute resolution in that jurisdiction.

I consider that the relative lack of activity in adjudication cannot be directed to a single

reason, but is instead derived from the combination of a number of reasons, as discussed

in this paper. When considered cumulatively these reasons have created uncertainty,

and thus a lack of confidence in the Act. But these reasons should be balanced against

the evidence of the Act working in its primary objective to ensure that prompt payment

is implemented and the need for adjudication avoided.

The success and continued loyalty towards conciliation with its own binding capability,

as the default and established method of dispute resolution, is undoubtedly a factor that

has weighed against adjudication under the Act being more fully considered in Ireland.

There is also something in the ‘culture’ of Ireland that considers adjudication as ‘going

against the grain’. The absolving of decision involvement by the parties and resultant

imposed decision nature of adjudication, when compared with the more consensual and

involved nature of conciliation can be said to make the former appear less attractive.

Parties seem to prefer having a committed involvement and degree of control in

determining the outcome of a dispute, where these attributes are more fully supported

by conciliation.


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In terms of culture, Ireland is a small nation where business relationships are close and

run deep. In this regard adjudication is presently considered by many to be too

adversarial, a perception that has been accentuated through the more adversarial

development of adjudication in the UK over the past ten years.

Despite the publicity campaign to coincide with the launch of the new Act, there ‘seems

to be a residual lack of knowledge and awareness of the legislation and how it operates

amongst sub-contractors for whom it is mainly aimed’.223 However, there is evidence to

suggest that this may now be changing. This past lack of understanding has been

accentuated by a lack of familiarity in the differences in the range of dispute resolution

methods that are available. The language and terminology of the legislation, the

supporting code and the standard forms are not easy to interpret, particularly for those

small contractors and sub-contractors that the legislation is seeking to protect.

A further reason for the relatively low level of activity in adjudication is the doubt

regarding enforcement and the potential for challenge through the Irish Court system.

In the three years since the Act came into force, the ‘Irish courts have not yet been

asked to consider a challenge to an adjudicator’s decision or to enforce an adjudicator’s

decision pursuant to Section 6(11) of the Act’.224 As has been discussed previously in

this paper, there is uncertainty about how both aspects will be addressed by the Courts.

It is considered that in acknowledging the presence of the Irish Constitution this could

represent the point where the judiciary in Ireland may part ways with the extensive body

of adjudication law in the UK. In this regard there is still some doubt as to what form of

process would need to be adopted by an inquisitorial adjudicator in order to comply

with the Irish constitutional requirements of fair process.

In the context of enforcement there is no specialist court in Ireland,225 such as the

Technology and Construction Court (TCC) in the UK, to deal specifically with

construction or adjudication cases. As a result there are doubts about the necessary

imposition of consistent decision making that the industry can rely upon. This may be

223 n10 at p. 9. 224 Meehan, Gerard and Brittain, Stephen, ‘Enforcing the Decisions of Adjudicators in Construction Disputes, A Practical Guide’(2019). 225 Although there is no dedicated court for construction disputes in Ireland, there is a dedicated judge, Barniville J, who has been allocated to deal with arbitration matters. It may be the case that in the future there is similarly a dedicated judge to deal with adjudication.


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an unfair criticism as the TCC is considered by many to be the best court of its type in

the world. But it does beg the question as to why the Act departed so far from a body of

already well established common law that could have otherwise been taken greater

advantage of.

The Act is imprecise about enforcement, stating that the decision ‘if binding, shall be

enforced either by action or with leave of the High Court’.226 But what is the court

process in granting leave? If it takes a long time, particularly where a recalcitrant party

uses all opportunities to delay the court granting leave to seek enforcement of a

decision, this will defeat the very purpose for which the Act was introduced. Without a

case coming before the courts there is a lack of confidence about how a quick and fair

method to obtain leave of court, to convert an adjudicator’s decision into a court order,

will be made. It appears that no party to date has had reason, or want, to be the first to

test the challenge or enforcement of an adjudicator’s decision.

It is contended that the cumulative effect of all the above reasons does not encourage

parties to adopt adjudication as an alternative to the already successful and familiar

method of conciliation in resolving construction disputes. But it should also be

acknowledged that the relatively low level of activity in adjudication may ‘indicate that

the payment provisions covered by the Act are being substantially complied with,

obviating the need for dispute resolution and in favour of dispute avoidance’.227

Although the impact of this aspect of the Act, as its primary objective, cannot be

quantified, there is anecdotal evidence that would suggest that this view has a wide

body of support.

Where next?

It was stated on the enactment of the Act that a ‘consultative forum will be convened in

order to assess the impact of the implementation of the legislation on the construction

sector in consultation with stakeholder organisations’.228 Similarly it has been

commented that ‘certain of those involved in adjudication in Ireland have discussed a

226 The Act Section 6(11). 227 Bunni, Dr Nael, Annual Report of the Chairperson of the Ministerial Panel of Adjudicators 2019, p.10 228 Quinn, Loughlin, Director, Construction Contracts Adjudication Service, press release on enactment of the Act, July 2016.


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number of enhancements to the legislation and the Code’.229 Whilst the CIF has

identified a considerable number of potential amendments to the Act, it is understood

that no consultative forum has yet been convened. This would indicate that there is

currently a ‘wait and see’ approach to the future of adjudication being adopted by the

stakeholders in Ireland. Nonetheless, there is a wide consensus that there are

substantive areas of the Act that require refinement, where some of these areas are

identified below.230

- The definition of a ‘payment disputes’?

- How many ‘disputes’ can an adjudicator properly address in the 28 day time limit?

- Should the adjudicator have the power to split disputes into separate decisions?

- What is necessary to make procedures constitutionally compliant?

- Should adjudication be allowed post substantial completion?

- Should an extension of the adjudication period be solely determined by the referrer?

- Is adjudication appropriate for the settlement of final accounts?

- Can adjudication properly address complex disputes?

- Should adjudication ‘at any time’ run concurrently with other dispute methods?

- Should the ‘value’ disputed be limited, does ‘one size fits all’ really work?

- Should the exemptions be reviewed?

- Should ‘supply only’ contracts be brought into the remit of the Act?

- Should there be limits on representation in seeking to contain cost?

- Should ‘time bars’ be introduced to enforce timely use of adjudication?

- Should the wider question of ‘payment security’ be considered?

In addition to the above areas of principle there are numerous points of detail and

drafting within the Act that have given rise to query and doubt. Perhaps now is the

time, as we start the fourth year since enactment, to seek to clarify these points with a

view to amendment to the Act and the Code of Practice.

A further point to note is that the limited research has been for nominations, only where

this information can be, albeit not easily, obtained. It appears that there is consistency

in anecdotal evidence, gathered through consultation, that appointment by ‘party

agreed’ or ‘concurrence’ between the parties is increasingly becoming the preferred

229 n10 at p. 9. 230 A number of these points were discussed at a meeting with Tim Bouchier-Hayes, 24 May 2019.


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route in Ireland for the selection of mediators, conciliators, arbitrators and adjudicators.

The increasing use of a ‘party agreed’ approach adds a further level of opacity in trying

to ascertain the level of activity in dispute resolution. In addition there is evidence to

suggest, in discussion with practitioners, that alternative methods such as ‘MedRec’231

are starting to gain acceptance. However, it is difficult to gather empirical statistical

data to confirm these views without further research.

Given the similarity of adjudication to the more established procedure of conciliation,

with its unique attributes in Ireland, it is inevitable that comparison will be drawn

between the two dispute methods as to which is most effective. It is contended that

each approach, including mediation, arbitration and other methods, has an appropriate

application according to the nature of the individual dispute. In the case of adjudication

and conciliation, as the two most popular approaches in the construction industry, there

is a temptation to consider these as ‘either or’ but I would suggest that there is a mutual

compatibility.

Prior to the Act a recalcitrant defending party entering into conciliation could seek to

frustrate the process where the only other available option to the claimant would be to

incur the long and expensive process of either arbitration, if available, or litigation.

With the presence of the Act a recalcitrant party can no longer adopt this approach. The

continuing availability of adjudication ‘at any time’ ensures that an expedient, binding

and cost effective alternative is always available to counter any recalcitrance in

conciliation. Accordingly, the availability of adjudication could be said to positively

support settlement through conciliation in the first instance.

It has been said that ‘Ireland has perhaps the best drafted construction adjudication law

in the world’,232 being high praise indeed. But with the benefit of hindsight, I would

suggest that words from commentary on the ‘Construction Act 2002’ in New Zealand,

made similarly three years after its enactment, may well be more appropriate. It was

said: ‘The Act’s biggest effect has, undoubtedly, been simply because it exists,

231 ‘MedRec Conciliation’ is a consensual process comprising a hybrid of classic mediation with the availability of a written reasoned recommendation if the mediation phase does not result in complete settlement, where the primary objective is always settlement. I am grateful to James O’Donoghue of the RIAI and Chairman of CIArb Ireland for providing detail on ‘MedRec’. 232 Fenwick Elliott, Robert, ‘Irish Ayes’ https://feconslaw.wordpress.com/2016/01/19/irish-ayes/ accessed 11 July 2019.


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employers and contractors (at least those familiar with the Act) are, I believe, being

more sensible about payment than they were or may have been previously, because they

do not wish to get involved in an adjudication.’233

As the fourth year since the enactment of the Act commences, it will be interesting to

see if adjudication becomes more prevalent in Ireland, when compared with other

jurisdictions. Although predictions before the Act envisaged an annual total of 150

adjudications,234 this would imply an annual total of circa 200 nominations, which with

the benefit of latest research would appear to be unrealistic. It has been presently

suggested by some authorities anecdotally that nomination activity in Ireland should be

at a level of approximately 100 nominations per annum.

An increase in activity to circa 100 nominations per annum would be more consistent

with the broad level of current activity in other jurisdictions, except Singapore.235 A

projection of CCAS statistics at one nomination in year 1, nine nominations in year 2

and thirty-two nominations in year 3 indicates an accelerating trajectory of increase. It

appears not unrealistic that take-up could further increase and approach 100

nominations per annum in the next two to three years. Where a review of the most

recent statistics confirms a notable increase in adjudication nomination in 2018/2019

(see Appendix A) it could be contended that adjudication in Ireland after three years is

now on the cusp of change. A combination of increasing industry awareness and a

resolution, or at least acceptance, of the doubt about various provisions under the Act

could support a wider consideration of adjudication. However, should there be an

economic slowdown in the industry with tensions increased and resources depleted, the

present option of adjudication may be increasingly forced upon parties in dispute.

In concluding this paper, I would contend that, at least for the time being, the

Construction Act 2013 asserts itself upon the construction industry in Ireland with a

‘bark that appears to be more effective than its bite’ - but this is probably the way it

should be.

233 Kennedy-Grant, Tomas QC, paper delivered to the Adjudication Society’s sixth annual conference, 15 November 2007. 234 n62 at p. 1. 235 It is noteworthy that adjudication nominations in Singapore in the years 2014 to 2016 were circa 450 nominations per annum, Toh, Chen Han, ‘Statutory Adjudication in Singapore’.


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Appendix A: Adjudicator nomination during the first five years from enactment in selected jurisdictions.

Ireland Singapore New Scotland Wales Northern Zealand Ireland

2016236 2005237 2002238 1998239 1998 1998240

4.72m241 4.26m 3.94m 5.07m 2.90m 1.68m

16/17 1242 05/06 1243 02/03 5244 98/99 8245 98/99 11 98/99 0

17/18 9 06/07 21 03/04 40 99/00 117 99/00 78 99/00 0

18/19 42 07/08 50 04/05 56 00/01 359 00/01 41 00/01 29

19/20 - 08/09 91 05/06 98 01/02 486 01/02 61 01/02 30

20/21 - 09/10 169 06/07 61 02/03246 522 02/03 80 02/03 40

Adjudicator nomination247 during the first five years from enactment in selected jurisdictions.

236 The ‘Construction Contracts Act 2013’ enacted in Ireland 25 July 2016. 237 The ‘Building & Construction Industry Security of Payment Act’ enacted in Singapore 1 April 2005. 238 The ‘Construction Contracts Act 2002’ enacted in New Zealand 1 April 2003. 239 Part II of the ‘Housing Grants Construction and Regeneration Act 1996’, supplemented by the ‘Scheme for Construction Contracts (SI 1998/687)’ enacted in Scotland and Wales 1 May 1998. 240 The ‘Construction Contracts (Northern Ireland) Order 1997’, supplemented by the ‘Scheme for Construction Contracts in Northern Ireland’ enacted in Northern Ireland 1 June 1999. 241 Population for each jurisdiction is that for the year of enactment of statutory adjudication to provide a more ‘like for like’ indication of scale of economy at enactment year. 242 Data for the years 16/17 to 18/19 from the first, second and third annual reports of the Chairperson of

the Ministerial Panel of Adjudicators on the anniversary of the commencement of the ‘Construction Contracts Act 2013’, prepared annually by Dr Nael Bunni. The 32 nominations in the year 18/19

through the Construction Contracts Adjudication Service (CCAS) have been adjusted upwards to 42 to include nominations from other nomination bodies, see page 30.

243 Data for the years 05/06 to 09/10 from the Building and Construction Authority of Singapore (BCA). 244 Data for the years 02/03 to 06/07 from the Building Disputes Tribunal 11 September 2019. For

current comparison, the average number of board nominations in New Zealand for the years 2016 to 2018 has been 146 per annum with an additional circa 10% being ‘parties agreed’ appointments.

245 Data for Scotland, Wales and Northern Ireland extracted from the annual adjudication reports no.s 1 to 5 prepared by Peter Kennedy and Janey Milligan, Glasgow Caledonian University. 246 Although adjudication nominations in Scotland rapidly accelerated in number in the first three years from enactment to 359 per annum, the present rate of 89 nominations per annum is considered a more appropriate basis for ‘like for like’ comparison, see page 18. 247 Not all adjudicators are nominated through Adjudicator Nominating Bodies (ANB’s). However the

most recent research undertaken by ‘Construction Dispute Resolution’, in conjunction with the Adjudication Society’ in Report no.17, January 2019 advises that 90% to 96% of nominations are made through an ANB in Scotland, Wales and Northern Ireland. In Singapore all adjudicators are nominated through the Building and Construction Authority. In New Zealand virtually all adjudicators are nominated through nominating bodies. In all jurisdictions, except Ireland, the deviance as a result of ‘party agreed’ appointments is considered to be small, such as not to impact on the overall trend. For Ireland, research confirms that circa 25% of nominations are being made by nominating bodies other than the Construction Contracts Adjudication Service (CCAS), see page 30.


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Appendix B: Suggested areas of further research

This paper includes limited research, as detailed in the previous sections 5, 6.5 and

Appendix A, as the basis for identifying and discussing trends. Sourcing entirely

accurate data on dispute resolution is difficult due to the confidential and sensitive

nature of the subject. Between December 2013 and February 2014, Dr Brian Bond

undertook a limited survey through a representative sample of seventy people

comprising, or representing, dispute practitioners, public sector employers, main

contractors and subcontractors on their ‘experience of using conciliation in Ireland since

the mid 1990’s’.248 Now some five years after this work was undertaken, and three

years since the enactment of the Act, it would seem appropriate to repeat and possibly

widen this survey. I believe that such a further survey would be timely and of benefit to

the construction industry in Ireland.

The Act since its enactment has been subject to comment and criticism, some finding

the wording in certain passages to be ‘somewhat indigestible, and in places utterly

confusing’,249 despite the objective of a ‘sensible law which would be easy to

understand’.250 Given that the primary objective of the Act was to establish measures to

protect the payment of contractors and in particular subcontractors ‘it is suggested that

the language used in the Act could have been more clearly drafted and made more

accessible with this group in mind’.251

It is of note that ‘certain of those involved in adjudication in Ireland have been

discussing a number of possible enhancements to the legislation and the Code’.252 The

Construction Industry Federation has identified twenty-seven potential amendments253

to the various provisions of the Act. There are presently omissions, which were

previously debated, such as the inclusion of payment of suppliers and payment security,

in addition to anomalies that include the potential to still frustrate payment together with

the limited capacity to suspend work for non-payment.

248 n52 at p. 244. 249 n71 at p. 4. 250 Houses of the Oireachtas (2012) Construction Contracts Bill [Seanad]: Dail Eireann Debate, Final Stage, 23 July 2013, Senator Feargal Quinn. 251 n71 at p. 5. 252 n10 at p. 9. 253 n170.


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Accordingly, I would suggest that further research into these areas could inform future

review and amendment of the Act.

This paper has by necessity focused on adjudication where Coulson J has suggested that

as a dispute resolution method it represents the ‘next best option to perfect but

expensive justice’.254 But there are a number of other methods of dispute resolution

which are considered discreet and quite separate. As a result Parties seek to choose one

method from a limited set of methods by determining which is most likely to meet their

needs, where the constant theme is seeking certainty at an optimal level of cost. There

are advantages and disadvantages to each method, thus providing a continuing source

for commentary and review by various authorities.

However, the constantly increasing adoption of technology, particularly through

Building Information Modelling (BIM), is placing demands on employers, contractors

and consultants to engage in greater levels of collaboration and coordination. As a

result the BIM environment both offers and demands a different approach to dispute

resolution for construction projects. Perhaps it is time to consider an alternative

approach to dispute resolution that is specifically tailored to the needs of the parties and

to reflect the more technologically advanced processes in the industry, including BIM.

One approach being developed to address these needs is ‘Dispute System Design’

(DSD),255 where instead of the ‘fuss having to fit a limited choice of forum’ the ‘forum

is fitted to the fuss’.256

254 Coulson LJ, ‘Adjudication: a cheap and cheerful fudge or proportionate decision making on the merits?’, Trinity College Dublin, 14 June 2019. 255 Dispute System Design (DSD) is defined as ‘the process of identifying, designing, employing and evaluating an effective means of resolving conflicts within an organisation’, Harvard Law School – Program on negotiation. These systems utilize technology to improve efficiency, accessibility, and transparency for disputants’, Stanford Law School, Dispute System Design. 256 I cannot claim full credit for this interesting ‘line of thinking’ which was initiated in a meeting and discussion with Brian Hutchinson, Associate Professor at the School of Law at University College Dublin, 25 May 2019.


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Appendix C: Royal Institute of the Architects of Ireland Construction Contract, Clause 38, August 2017 Edition. 38 Avoiding and Resolving Disputes (a) Conciliation

(i) Should any dispute arise in relation to this contract – and it is not resolved by negotiation – the parties should enter into Conciliation to resolve such dispute before recourse to Statutory Adjudication or Arbitration.

(ii) Either party may commence Conciliation by sending a written request for Conciliation to the other party, setting out a brief outline of that party’s issues and concerns and an indication of the reliefs and/or remedies sought. The provisions in the RIAI Conciliation Guidelines and Procedures document current at the designated date shall apply.

(iii) If the parties are not able to agree on the appointment of a Conciliator, then either party may apply in writing to the RIAI requesting the nomination of a Conciliator by the President of the RIAI (or a Vice-President if the President is not available).

(b) Arbitration

(i) Should any dispute arise in relation to this contract, either party shall refer such dispute to Arbitration and the place of such Arbitration shall be Ireland.

(ii) Either party may commence Arbitration by delivering a written Notice of Arbitration to the other party. Such notice shall set out a brief outline of the dispute and an indication of the reliefs and/or remedies sought.

(iv) If the parties are not able to agree on the appointment of an Arbitrator, then either party shall apply in writing to the RIAI requesting the appointment of an Arbitrator by the President of the RIAI (or a Vice-President if the President is not available).


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Appendix D: Public Works Contract - Without Quantities - PW-CF1 2018

13 DISPUTES

13.1 Dispute Management Procedure

13.1.1 If a dispute arises under sub-clause 10.5.4 or 10.5.5 of the Contract, either Party may, by notice to the other, refer the dispute for resolution under this sub-clause 13.1. The notice shall state that the dispute is given under sub-clause 13.1 of the Contract.

13.1.2 The dispute management procedure for resolution of disputes arising under sub-clause

10.5.4 or 10.5.5 of the Contract consists of meetings of the Project Board as detailed in this Clause.

The Project Board:

(1) shall meet at least every 60 days to review disputes referred under clause 13.1 and may, by agreement of the Project Board, call an interim Project Board Meeting sooner than the next scheduled date for a Project Board Meeting, to review disputes referred. Where no disputes are referred the Project Board may, by agreement of the Project Board, defer scheduled Project Board meetings until a dispute arises under clause 13.1. There shall be a minimum of 1 member from each Party and a maximum of 3 members from each Party, as named in Schedule Part 3A, at all Project Board meetings; (2) shall ensure that all unresolved disputes at the end of a scheduled Project Board Meeting or interim Project Board Meeting are so notified to the Parties on the next Working Day after the Project Board meeting (“date of notification”). Either Party may refer such unresolved disputes to conciliation [in accordance with sub-clause 13.2] within 14 days of the date of notification to the Parties by the Project Board, otherwise the Employer’s Representative’s determination issued under sub-clause 10.5 shall be binding; (3) shall communicate orally or in writing on a “without prejudice” basis, including all communications between the Project Board members and to the Standing Conciliator, [where appointed], and such communications may not be relied upon by either Party in subsequent dispute resolution proceedings under this Contract, other than the signed agreement as set out in sub-clause 13.1.2.(4); (4) shall ensure all agreements to resolve a dispute between the Parties are in writing and signed by the Parties. This agreement is binding on the Parties;

(5) may, where the relevant appointment has been made, agree to have the Standing Conciliator or conciliator draft the binding agreement to be signed by the Parties. If the agreement is not signed by both Parties within 14 days of the date of issue of the agreement by the Standing Conciliator or conciliator, either Party may refer the dispute to conciliation as per 13.1.2(2) above within a further 14 days. If the dispute is not referred to Conciliation within this further 14 day period the Employer’s Representative determination issued under sub-clause 10.5 shall be binding; (6) may agree to have the Standing Conciliator, where one has been appointed, attend or chair the Project Board meetings; (7) may agree to seek advice or opinion from the Standing Conciliator at the Project Board meeting, where one is appointed, either orally or in writing, in an effort to resolve disputes referred.

13.2 Conciliation

[Where Schedule Part 1N so states that a Standing Conciliator shall be appointed, the Standing Conciliator shall take the place of the conciliator under sub-clause 13.2 for all disputes referred to conciliation under sub-clause 13.2]


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13.2.1 If a dispute arises under the Contract, [or where a dispute referred to the dispute management procedure has not been resolved], either Party may, by notice to the other, refer the dispute for conciliation under this sub-clause 13.2. The notice shall state that it is given under sub-clause 13.2 of the Contract. [No dispute referred to the dispute management procedure may be referred to conciliation without first completing the dispute management procedure.]

13.2.2 Except in the case where a Standing Conciliator has been appointed, [and in such cases

the Standing Conciliator shall be the conciliator], within 10 working days of the referral of a dispute to conciliation, the Parties shall jointly appoint a conciliator who is competent to adjudicate upon the dispute and independent of the Parties. If the Parties fail to appoint a conciliator within 10 working days of the referral, or if a person appointed refuses to act or becomes unable to act, the conciliator shall be appointed by the appointing body or person named in the Schedule, part 1N, on the application of either Party. If there is a fee for making the appointment, the Parties shall share it equally. If one Party pays the entire fee, it shall be entitled to reimbursement of the other Party’s share from the other Party on demand.

13.2.3 Each Party shall, within the period set by the conciliator, send to the conciliator and the

other Party brief details of the dispute stating its contentions as to the facts and the Parties’ rights and obligations concerning the dispute. The conciliator may, for this purpose, suggest further actions or investigations that may be of assistance.

13.2.4 The Parties shall promptly make available to the conciliator all information, documents,

access to the Site and appropriate facilities that the conciliator requires to resolve the dispute.

13.2.5 The conciliator shall consult with the Parties in an attempt to resolve the dispute by

agreement. The conciliator may do any of the following, or any combination of them:

(1) meet the Parties separately from each other or together and consider documents from one Party not sent or shown to the other

(2) conduct investigations in the absence of the Parties

(3) make use of specialist knowledge

(4) obtain technical or legal advice

(5) establish the procedures to be followed in the conciliation

Where the dispute has been referred to the dispute management procedure and Sub-clause 13.1.2(5) and 13.1.2(6) of the Contract applies, the conciliator, with the agreement of the Parties, may forgo the requirements of 13.2.5(1) to 13.2.5(5) inclusive and give the Parties a written recommendation in accordance with 13.2.8.

13.2.6 The conciliator shall not be an arbitrator and the Arbitration Act 2010 and the law

relating to arbitration shall not apply to the conciliation.

13.2.7 The conciliator’s terms of appointment shall be those in the Works Requirements or, if there are none, those agreed by the Employer and the Contractor with the conciliator.

13.2.8 If the dispute is not resolved by agreement within 42 days after the conciliator was

appointed, [or after referral of the dispute to conciliation where a Standing Conciliator has been appointed], or a longer period proposed by the conciliator and agreed by the Parties, the conciliator shall give both Parties a written recommendation. The conciliator shall base the recommendation on the Parties’ rights and obligations under the Contract.


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13.2.9 If either Party is dissatisfied with the conciliator’s recommendation, it may, within 42 days after receiving the conciliator’s recommendation, so notify the other Party. The notice shall state that it is given under sub-clause 13.2 of the Contract, and shall state the matters in dispute and the reasons for dissatisfaction. If the conciliator has failed to give a recommendation within 42 days after appointment, either Party may give a notice of dissatisfaction. If notice of dissatisfaction has been given in accordance with this clause, either Party may refer the dispute to arbitration under sub-clause 13.4.

13.2.10 If neither Party gives notice of dissatisfaction within 42 days after receiving the

conciliator’s recommendation, the recommendation shall be conclusive and binding on the Parties, and the Parties agree to comply with it. If, in such circumstances, a Party fails to comply with the conciliator’s recommendation, the other Party may [without limiting its other rights] refer the failure itself to Adjudication, [where the dispute is a dispute relating to payment], or to arbitration under sub-clause 13.4, and need not invoke this sub-clause 13.2 for this reference.

13.2.11 If the conciliator has recommended the payment of money and a notice of

dissatisfaction is given, the following shall apply:

(1) The Party concerned shall make the payment recommended by the conciliator, provided that the other Party first (a) gave a notice, complying with the arbitration rules referred to in sub-clause

13.4, referring the same dispute to arbitration and

(b) gave the paying party a bond executed by a surety approved by the paying Party, acting reasonably, in the form included in the Works Requirements, or if there is none, a form approved by the Paying Party, acting reasonably, for the amount of the payment.

(2) If, when the dispute is finally resolved, it is found that the Party receiving payment

on the conciliator’s recommendation was not entitled to some or all of the amount paid, then that Party shall repay the amount it was paid and found not to be entitled to, together with interest.

(3) When the dispute is finally resolved, interest will be deducted from final payment under the award or judgment.

(4) Interest under this sub-clause is calculated at the reference rate referred to in the European Communities (Late Payment in Commercial Transactions) Regulations 2012 plus 2% per year and runs from the date of the original payment to the date of the repayment or final payment.

(5) [This provision for interest is confidential under sub-clause 13.2.12, and in particular shall not be taken into account or referred to in arbitration until all other matters are resolved.]

13.2.12 The conciliation shall be confidential, and the Parties shall respect its confidentiality,

except when any of the exceptions in sub-clause 4.16 apply, or to the extent necessary to enforce a recommendation that has become conclusive and binding. All documents provided by a Party in connection with a conciliation shall be returned when the conciliation is concluded.

13.3 Adjudication

13.3.1 The parties have recourse to Adjudication in accordance with the Construction Contracts Act 2013.

13.3.2 Where an adjudicator reaches a decision on a dispute referred under the Construction

Contracts Act 2013, that same dispute shall not be referred to the dispute management procedure or conciliation under the Contract.


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13.3.3 If a dispute between the Parties is referred to Adjudication, any dispute management procedure or conciliation relating to that dispute immediately adjourns. In the event that no decision is reached by the adjudicator, the parties may continue to resolve the dispute under the dispute management procedure or conciliation from the date the dispute was referred to Adjudication. In the event that a decision is reached by the adjudicator, the dispute management procedure or conciliation for that dispute shall be terminated.

13.4 Arbitration

Any dispute that, under sub-clause 13.2, may be referred to conciliation shall, subject to sub-clause 13.2 be finally settled by arbitration in accordance with the arbitration rules identified in the Schedule, part 1N. For purposes of those rules, the person or body to appoint the arbitrator, if not agreed by the Parties, is named in the Schedule, part 1N.


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Appendix E: Irish Water Major Works Contract (IWMW) - Without Quantities - 2019

11.8 Disputes

.1 Unless a valid reference to adjudication in connection with a payment dispute has been made under section 6(1) of the 2013 Act, if a dispute arises in relation to this contract the parties must attempt to resolve it in accordance with the following procedure:

(a) A party may give the other notice of a dispute, including details of the claims made by the party giving the notice.

(b) Within 21 days after notice of dispute is given, senior representatives of each party must meet on a without prejudice basis and, at the meeting, should attempt to resolve the dispute. A senior representative means the chief executive or managing director, or another senior executive nominated by him or her.

(c) If the dispute has not been resolved within 21 days after the notice was given, either party may refer it to mediation using the Engineers Ireland Mediation Procedure 2011.

.2 In the event that a valid reference to adjudication has been made in connection with a payment dispute under section 6(1) of the 2013 Act, where any such dispute has not been finally resolved by agreement of the parties, either party may refer it to mediation using the Engineers Ireland Mediation Procedure 2011 after the adjudication has been concluded.

.3 In the event that neither party refers the dispute to mediation within 21 days after the notice was given or, having referred it to mediation, the parties remain in dispute, then sub-clause 11.9 shall apply.

11.9 Jurisdiction

The parties submit to the jurisdiction of the Irish courts to settle any dispute concerning this

contract or the Works.


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Appendix F: The ‘Construction Contracts Act 2013’ (the Act)


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Appendix G: Code of Practice Governing the Conduct of Adjudications


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Appendix H: Statutory Instrument No.450 of 2016, Rules of the Superior Courts


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The Irish 'Construction Contracts Act 2013' Adjudication

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