Resolving Construction Disputes: The Growing Power of Statutory Adjudication in Ireland

Statutory adjudication in Ireland under the Construction Contracts Act, 2013 commenced in July 2016. The primary goal of the Act was to redress the imbalance in financial risk inherent in the contract/liability chains in the construction industry.  At the time, it was heralded and decried in equal measure; promoted as a bold and novel mechanism to resolve construction disputes and criticised as a usurpation of parties’ consent and a charter for ‘rough justice’. In the context of all this heat and light by informed commentators, it was surprising that very little seemed to happen. 

Significant Shifts in Statutory Adjudication: Insights from the Latest Report

However, the Eighth Annual Report of the Chairman of the Construction Contracts Adjudication Panel (Bernard Gogarty), published just before Christmas 2024, reveals that things have changed significantly. The report covers the period from July 2019 to July 2024 and shows that this initial period of stasis is well and truly over; that statutory adjudication has established itself as a uniquely powerful mechanism in the resolution of construction disputes; and, which indicates that statutory adjudication will soon stand as the pre-eminent form of dispute resolution in the construction sector encompassing all parties in the contract chain from the employer to a sub-subcontractor.

Some Highlights of the Report Show:

• the annual number of appointments has doubled in 5 year period from 54 to 101;
• the value of the disputes referred was €227.7 million;
• while the plurality (c.43%) of disputes referred were between subcontractors and main contractor there is an increasing emergence of disputes referred involving main contractors and employers (c.34%);
• the value and complexity of the disputes is increasing with c.36% falling within the €100,000 – 500,000 range and, notably, c.34% involving sums in dispute north of €500,000;
• the majority of disputes referred (c.55%) were determined within 42 days of the appointment of the adjudicator and c.25% were determined within 28 days (the remaining 20% were determined pursuant to a timetable agreed between the parties and the adjudicator).
• it appears that the act of referral catalysed prompt settlement of the dispute in c. 25% of the cases;

The Growing Appeal and Judicial Support for Statutory Adjudication

Drawing these statistical threads together, adjudication under the Act has demonstrated its capacity to deal with complex and high value disputes efficiently and definitively. The process significantly readjusts the inequality of arms inherent in a dispute between larger and smaller entities in the contract chain. The process is increasingly finding favour amongst main contractors and employers. More generally, the intrinsic speed and certainty of the process is finding increasing appeal in the market.

It is a truism that benefits of speed and certainty raises the spectre of inaccuracy and injustice.  Perhaps, it is not surprising that the construction industry as a whole might value speed, clarity and certainty over other perceived risks. However, there was a doubt prevalent prior to 2020 that the High Court might be reluctant to stamp its approval upon such a novel process with such inherent risks.  Appendix 2 of the Report contains a list of the emerging jurisprudence of the High Court dealing with statutory adjudication under the Act which, in very broad summary, has shown a notably supportive attitude. 

Conclusion

To date, the High Court has not been favourable to Respondents seeking to object to or delay the enforcement of an adjudicator’s decision as a judgement of the High Court which, pursuant to a dedicated order of procedure may be achieved in a matter of a few weeks following the handing down of an adjudicator’s decision. 

A momentum and market presence has been achieved by statutory adjudication under the Act which is set only to increase and expand in the coming years. 

Learn more

The Bar of Ireland is home to over 2,100 expert legal practitioners, many of whom have an in-depth knowledge of various forms of alternative dispute resolution, including adjudication.

A recent podcast episode from the specialist Construction Bar Association covers the topic of construction adjudication, delving into the subject in an insightful conversation.

Listen in full below.