Adjudication in Ireland

A statutory right to adjudication in some disputes was introduced in Ireland under the Construction Contracts Act 2013 (the Act), which applies to relevant construction contracts entered into on or after 25 July 2016. The Act also imposed statutory obligations on parties in relation to how payments under construction contracts are managed. The regime is similar to that introduced by the Housing Grants, Construction and Regeneration Act 1996 (HGCRA) in England and Wales and the Construction Contracts (Northern Ireland) Order 1997 (NI Order) in Northern Ireland.

What constitutes a construction contract under the Act is broadly the same as under the UK regime and includes the construction, maintenance and demolition of works, as well as fit-out installation, preparatory operations, and painting and decorating.

The following types of contracts are excluded under the Act:

• contracts valued at less than €10,000;
• contracts relating to owner-occupied residential dwellings of less than 200 square metres. Unlike the outright exclusion on residential properties in the UK, adjudication on payment disputes will be available in the Ireland if the property is large enough;
• contracts for employment; and
• contracts between a state authority and its partner in a public-private partnership arrangement.

This guide aims to give a practical overview of the adjudication process in Ireland and how it has been utilised by the construction industry over the past decade, as well as the distinct differences between the Irish regime and those in force in England and Wales and in Northern Ireland.

Referring a dispute to adjudication

Contrary to the position in the UK and Northern Ireland, where any dispute under a construction contract can be referred to adjudication, a party to a construction contract in Ireland can only refer a dispute relating to payment to adjudication.

This was confirmed by Ireland’s High Court in 2021 in the leading case, Aakon Construction Services Ltd v Pure Fitout Associated Ltd (PDF 43 pages / 336KB), when it stated that: “the range of disputes which can be referred to adjudication under the UK legislation is far broader than under the Construction Contracts Act 2013.”

Adjudication procedure in Ireland

Parties to a construction contract can set out a Construction Contracts Act 2013 compliant adjudication agreement within the contract. Where the contract is silent, then the provisions of the Act and the code of practice referred to in the Act will apply.

Where a payment dispute arises, either party may serve the other with a notice of intention to refer the payment dispute for adjudication. In contrast to the UK regimes, the Irish courts confirmed in the Aakon v Pure Fitout case that the Act does not restrict how many disputes can be referred to an adjudicator. Section 6(9) of the Act expressly provides that the adjudicator “may deal at the same time with several payment disputes arising under the same construction contract or related construction contract”.  The High Court held that under the Act “the concept of a dispute has been given a broad interpretation” such that a single “dispute” “may legitimately encompass a number of individual issues”.

In terms of the notice, the court recently held that if a construction contract prescribes a method of service for contractual notices, a notice of intention to refer a dispute to adjudication must be served in compliance with those contractual provisions. Upon issuing the notice of intention, parties have five days in which to agree the appointment of an adjudicator or else the appointment will be referred to the chair of the construction contracts adjudication panel.

The judge in the Aakon v Pure Fitout case drew attention to several important contrasts with the position under the UK regimes:

• the Act is silent on the interrelationship between (i) a notice of intention to refer and (ii) the subsequent referral of the payment dispute to an appointed adjudicator;
• -neither the Act nor the statutory code of practice for adjudication state that the details in the dispute – as set out in the referral – are confined to those set out in previous issued notice; and
• the Act allows the adjudicator to take the initiative in ascertaining the facts and the law in relation to the payment dispute such that it would be inconsistent to hold that an adjudicator’s jurisdiction is rigidly defined by what is set out in the notice of intention to refer a dispute.

Any adjudicator appointed to determine a construction contract dispute in Ireland is required to adhere to the code of practice (PDF 14 pages / 33KB) for adjudication. The code requires adjudicators to be "impartial, independent and only adjudicate where satisfied that no actual conflict of interest exists”. It also says that the adjudicator “shall observe the principles of procedural fairness,” including giving each party “a reasonable opportunity” both to put forward their own case and to respond to the case put forward by the other party.

As for enforcement, several cases that have come before the Irish courts have considered whether the adjudicator has breached its obligation in respect of procedural fairness. In a 2023 judgment, DNCF Ltd v Genus Homes Ltd, the High Court noted that it “will only refuse leave to enforce an adjudicator’s decision on the grounds of procedural unfairness where there has been a blatant or obvious breach such that it would be unjust to enforce the immediate payment obligation”.

What constitutes a “blatant or obvious breach” is a high bar. The court clarified this as occurring “if an adjudicator has genuinely gone off on a frolic of his own and has reached a decision by reference to a legal or factual point which had not been advanced by either side, and which the parties could not reasonably have anticipated might be considered relevant”.

On conduct, in DNCF v Genus Homes the High Court stated that the adjudication process is “primarily adversarial in nature” and while the adjudicator “has discretion to adopt an inquisitorial role, he is not obliged to do so”. In particular, the court emphasised that “there was no obligation upon the adjudicator to seek further and better particulars from the parties”.

It is also not incumbent on the Irish courts to re-examine the merits of the adjudicator’s decision. As demonstrated in a 2023 case, as with the UK regimes, enforcement of an adjudicator’s decision does not preclude a party from pursuing the matter through arbitration or litigation; but in seeking to resist enforcement “the court will not be drawn into a detailed examination of the underlying merits of an adjudicator’s decision under the guise of identifying a breach of fair procedure”.

Enforcement of an adjudicator’s decision

Enforcement of an adjudicator’s decision occurs via an application to the Ireland’s High Court, with a claim being issued and affidavits of evidence being served in support of and in reply to the claim.

The Irish courts have cautioned, however, against reliance on the experience under the UK regimes. In the Aakon v Pure Fitout case, the High Court warned that whilst “there is an understandable temptation for practitioners and judges in this jurisdiction to borrow from this extensive learning when interpreting and applying the Construction Contracts Act 2013”, there were “significant differences” in how Ireland approached enforcement. In particular, the court noted that under section 6(11) of the Act, an adjudicator’s decision is to be enforced as if it were an order of the court and therefore “has an enhanced status under the domestic legislation.”

Unless the Irish courts direct otherwise, in the interests of fair procedure, each enforcement claim will be dealt with by written submissions only. Hearings are generally only necessary where oral questioning is required to address any discrepancies in the parties’ evidence.

This High Court procedure is to be dealt with expeditiously, so much so that all applications are to be heard on the first available Wednesday on the condition that papers are filed the preceding Friday, as per Practice Direction HC 105. This is in-keeping with the “pay now argue later” principle at the heart of the Irish adjudication regime. As reaffirmed in 2023 in McGurran Civils ROI Ltd v K&J Townmore Construction Ltd, there is little point in protracting enforcement given the pressure on adjudicators to come to a decision within a matter of weeks.

The future

As summarised in Principal Construction Ltd and Beneavin Contractors Ltd in 2020: “The purpose and aim of the Act of 2013 is to provide for a summary procedure to enforce the payment of moneys from one party to another in a building contract, notwithstanding that it may ultimately transpire that such moneys are, in fact, not owed”.

Despite the Act still being in its relative infancy, the approach taken by the Irish courts in enforcement proceedings to date emphasises that swift summary recourse is at the heart of the adjudication process. It also demonstrates that the Act should be interpretated at times with the benefit of lessons learnt from UK judgments, but nevertheless, always on its own terms, in accordance with the doctrine of the Irish courts.