Construction in Ireland: the statutory obligations

Those statutory obligations, which parties are unable to contract out of, contain some clear differences from those arising in the UK – including Northern Ireland – and elsewhere in Europe. 

The statutory obligations in Ireland will apply even if the law governing the relevant construction contract for a project is English law or the law of any other jurisdiction.

With construction at the centre of Irish government policy plans, it is important that construction companies understand the practical implications that the statutory obligations in Ireland will have on their construction contract. There are certain provisions to be particularly aware of.

Payment 

The Construction Contracts Act 2013 sets out payment obligations and contains certain ‘fall-back’ provisions that kick-in in the event that the provisions around payment set out in construction contracts are deficient.

Payment can be claimed by issuing payment claim notices. These are usually issued by contractors. Payment claim notices can be challenged by issuing ‘pay less’ notices. The Act imposes requirements around the contents of and timeline for issuing both types of notice.

Under certain circumstances, contractors and sub-contractors can suspend performance of ongoing works if there is non-payment for works already performed.

More detail on the payment regime for construction in Ireland is set out in our separate guide.

Adjudication 

A statutory right to adjudication payment disputes was introduced in Ireland under the Construction Contracts Act 2013. A party to a construction contract in Ireland can only refer a dispute relating to payment to adjudication.

See our separate guide to adjudication in Ireland which addresses matters such as adjudication procedure in Ireland and enforcement of an adjudicator’s decision in more detail.

Health and safety 

Distinct health and safety obligations arise for clients, project supervisors for the design process, designers, project supervisors for the construction phase, and contractors, under legislation that has been in place in Ireland since 2005. Those obligations are addressed in more detail in our separate guide to health and safety for construction projects in Ireland, but they cover things like appointment of parties to key project roles – like those described above – as well as the setting of health and safety plans, integration of health and safety practices into working practices, and record keeping and reporting duties.

Those responsible for health and safety breaches face potential criminal sanctions – including large fines or even imprisonment.

Other statutory obligations 

There is a raft of other statutory regimes that parties to construction contracts in Ireland should be aware of. These include:

• Building regulations and associated technical guidance;
• The Criminal Justice (Corruption Offences) Act 2018 and the Prevention of Corruption (Amendment) Act 1989 to 2010 relating to anti-corruption and bribery offences; 

• The EU General Data Protection Regulation (GDPR) and associated guidance published by the European Data Protection Board or Irish Data Protection Commission, concerning the processing of personal data; The Criminal Law (Human Trafficking) Act 2008 as amended by the Criminal Law (Human Trafficking) (Amendment) Act 2013;  

• The Equal Status Act 2000-2018 relating to equality and discrimination offences.  

In addition, construction companies should be aware of their potential liability for payment of any ‘relevant contracts tax’, which applies to certain payments by principal contractors to subcontractors – including subcontractors based outside of Ireland – in the construction industry. Depending on the circumstances, this tax is levied at rates of ether 0%, 20% or 35%.