The methods of resolving construction payment disputes seem as myriad as the disputes themselves. In Ireland, the legislature last July enacted a law introducing a method of dispute resolution new to the Irish construction landscape—adjudication.

The motivation behind the Construction Contracts Act 2013 was to create payment protection for those who provide labor and materials for a project (as there is no mechanic’s lien in Ireland). The Act introduces two mechanisms to achieve this: (1) new 30-day “must make payment” provisions and (2) a right to refer payment disputes to rapid-fire adjudication.

Adjudication

Adjudication is a dispute resolution process in which an independent neutral, an adjudicator, is appointed to render a decision on payment issues within 28 days (with very limited exception) of referral. If compliance is not met voluntarily, the decision of the adjudicator is enforceable at court by summary judgement.

Ireland took inspiration from the U.K., which introduced adjudication for construction disputes in its Housing Grants, Construction, and Regeneration Act 1996 (Part 2), with amendments as recent as the Construction Act 2009. Adjudication has become the go-to process for dispute resolution in the U.K., greatly curtailing the use of lengthy processes such as arbitration. According to a Scottish university study, in the 14 years between 1998 and 2012, the use of adjudication rose from 187 in its first year to 1309 in its second year. This rise continued for a few years, then began to fluctuate. In 2013 there were 1083 referrals to adjudication. The success of adjudication in the U.K. has been aided by the use of a specialist court, the Technology and Construction Court (TCC), which promptly (within days of application) and consistently (but not always) enforces adjudicators’ decisions.

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Tags: Ireland, Payment Disputes