More adjudicators were appointed to hear payment disputes in 2023/2024 than in any previous year, according to the Eighth Annual Report of the Chairperson of the Construction Contracts Adjudication Panel.

Adjudication is a swift dispute resolution mechanism provided by the Construction Contracts Act 2013 (the “Act”). A party to a construction contract is entitled to refer for adjudication any dispute relating to payment arising under a construction contract.

The Chairperson’s report covers the period 26 July 2023 to 25 July 2024. It does not necessarily capture every adjudication, but gives a strong picture of trends. (Adjudications may also occur where the parties agree on the appointment of an adjudicator without applying to the Chairperson to appoint an adjudicator. While the Code of Practice Governing the Conduct of Adjudicators requires anonymised statistical returns on adjudications, it cannot be said with certainty that returns are made for every adjudication.)

How many adjudicators did the Chairperson appoint?

The Chairperson made 93 appointments. There were 96 anonymised statistical returns from adjudicators to the Chairperson.

There were 101 applications seeking appointment of an adjudicator. One application could not be processed as the services provided by the applicant did not come within the definition of “construction operations” in the Act, a salient reminder that referrals for adjudication must fall within the statutory framework.

What parties are involved?

The largest number of disputes were between sub-contractors and main contractors (nearly 45%), followed by main contractors and employers (just over 35%). Other parties used the process too: architects, an engineer and an archaeologist. Out of the 96 statistical data returns, Dublin was the principal site location for just over 55% of adjudications.

What was disputed?

Disputes concerned final payment (45), interim payment (41), and ‘other payment’ (10). It is useful to see the descriptions of the ‘other payment’ disputes, deemed as ‘payment disputes’ under the Act: “COVID-19 claim; loss and damage claim for wrongful termination; claim for payment of retention; claim for defects; and claim for return of deposit paid in advance”.

How much were disputes worth?

The total value of disputes heard by the 93 adjudicators appointed by the Chairperson was €42.2m, down on previous years.  The 96 statistical returns indicate that most of those disputes (36) were for a figure between €100k – €150k, with the remainder spread over categories starting from €10k – €30k, ranging up to one dispute for over €10m.

Was the process effective?

Out of the 96 statistical returns, 74 resulted in a decision (with most of the remainder settled or withdrawn). Half the decisions favoured the referring party, and the rest either favoured the responding party or resulted in a split decision.

As for values awarded, the largest group of decisions fell into a €100k-500k category and, the next largest, a €0 category. Two decisions awarded values in a highest category of €5m-10m.

The Act requires the adjudicator to reach a decision in 28 days, but this period can be extended to 42 days with the consent of the referring party (or longer if agreed by both parties). The largest group of cases (41) completed within 42 days. 18 had other timescales agreed by the parties, and 15 finished within 28 days. Ranges of fees charged by adjudicators are also noted.

Adjudication is well-embedded in the sector

The Chairperson concluded that adjudication continues to gain momentum and that parties to construction contracts are pursuing their rights to seek redress for non-payment or underpayment. The value of disputes dealt with this year demonstrated the benefit of the Act to the construction sector.

The authors thank Ted Halligan for his contribution to this post.