As another July passess, the end of the third year of adjudication in Ireland also comes to an end (The Construction Contracts Act 2013 came into force for any construction contract entered into after the 25th July 2016, therefore this date is the end of each yearly cycle). As with previous years, the Chair of the Ministers panel of Adjudicators, Dr. Nael G. Bunni, recently issued his yearly report in respect to the activity through the panel in the year to end July. The report outlines some detail in respect to the use of adjudication through the panel but it does not include any information in respect to any adjudications where the Ministers Panel have not been the appointing body. It can therefore only give a snapshot in respect to where adjudication usage actual sits. So what does it tell us...
Use of Adjudication
The latest report, outlines a circa 355% increase year on year in the number of applications. From a low base of 1 application in Year 1, to 11 in Year two, Year three had 39 applications to the panel for appointment of an adjudicator. A similar 356% increase in actual appointments took place year on year from 0 in year 1, to 9 in year 2 and up to 32 in year 3.
The latest report, outlines a circa 355% increase year on year in the number of applications. From a low base of 1 application in Year 1, to 11 in Year two, Year three had 39 applications to the panel for appointment of an adjudicator. A similar 356% increase in actual appointments took place year on year from 0 in year 1, to 9 in year 2 and up to 32 in year 3.
Adjudicators
Quantity Surveyors continue to lead the way as the profession most appointed by the panel with 38% of appointments followed closely by Barristers at 21% and Engineers at 18%. Architects, marking the year in which they received their first appointment from the panel are at 15% with solicitors at 6% and a Fellow of the CIArb at 3%. The most common rate charged by adjudicators was between €200 and €250 (46%) with a charge between €300 and €350 per hour next in 35% of cases.
Quantity Surveyors continue to lead the way as the profession most appointed by the panel with 38% of appointments followed closely by Barristers at 21% and Engineers at 18%. Architects, marking the year in which they received their first appointment from the panel are at 15% with solicitors at 6% and a Fellow of the CIArb at 3%. The most common rate charged by adjudicators was between €200 and €250 (46%) with a charge between €300 and €350 per hour next in 35% of cases.
Parties in Dispute
No surprise that Sub contractor's referring against the Main Contractor continues to lead the way in the number of disputes and this relationship is now responsible for 66% of the cases on the panel. Main Contractor's are also using the adjudication process as a resolution tool with 19% of cases referred by them against non Public Body Employers, a further 6% between them and Public Body employers and 3% between them and Sub Contractors. Employers referring against Main Contractors is responsible for a further 6% of cases. There is no reference to a Public Body having used adjudication against a contractor to date. In respect to the outcomes of decisions, the Referring Party were successful on 58% of reported cases with the respondent successful on 27% of cases. 15% of cases had a split decision issued.
No surprise that Sub contractor's referring against the Main Contractor continues to lead the way in the number of disputes and this relationship is now responsible for 66% of the cases on the panel. Main Contractor's are also using the adjudication process as a resolution tool with 19% of cases referred by them against non Public Body Employers, a further 6% between them and Public Body employers and 3% between them and Sub Contractors. Employers referring against Main Contractors is responsible for a further 6% of cases. There is no reference to a Public Body having used adjudication against a contractor to date. In respect to the outcomes of decisions, the Referring Party were successful on 58% of reported cases with the respondent successful on 27% of cases. 15% of cases had a split decision issued.
Location of Dispute
Dublin continues to have the largest amount of disputes with 62% of cases located in the Capital. Interestingly no other county in Leinster has ever registered a dispute to the Adjudication service. Munster is well represented however with Cork responsible for 9% of cases, Tipperary 6% and Kerry and Waterford with 3% each. May and Galway represent 6% and 3% respectively with 3% of cases noted without a location. Most interesting from the list is the fact that London is noted as the location of a dispute under the Act.
Dublin continues to have the largest amount of disputes with 62% of cases located in the Capital. Interestingly no other county in Leinster has ever registered a dispute to the Adjudication service. Munster is well represented however with Cork responsible for 9% of cases, Tipperary 6% and Kerry and Waterford with 3% each. May and Galway represent 6% and 3% respectively with 3% of cases noted without a location. Most interesting from the list is the fact that London is noted as the location of a dispute under the Act.
Values and Costs
Disputes for values between €100-500k account for over 40% of cases through the panel followed closely by disputes below €100k at 31%. 47% of cases resulted in a total adjudicator cost of less than €10k with a further 22% between €10k and 20k. 25% of cases had a final adjudicator fee of in excess of €20k over the period with the highest reported fee of between €40-45k.
Disputes for values between €100-500k account for over 40% of cases through the panel followed closely by disputes below €100k at 31%. 47% of cases resulted in a total adjudicator cost of less than €10k with a further 22% between €10k and 20k. 25% of cases had a final adjudicator fee of in excess of €20k over the period with the highest reported fee of between €40-45k.
Conclusion
There has been lots of discussion around why Adjudication has been a slow burner in Ireland. In the main it appears that year on year, the use of adjudication is growing although at a far greater rate that had been expected. It is however noted that many in the industry are still completely unaware of the existence of the Act, the payment provisions and adjudication and ongoing publication of the existence of this piece of legislation will be required. It is also to be acknowledged that the existence of the payment provisions and the opportunity to suspend for non payment under the ACT will also have assisted the resolution of disputes prior to the need for a step into the adjudication process. It will be interesting to see what changes another year might bring in respect to adjudication.
There has been lots of discussion around why Adjudication has been a slow burner in Ireland. In the main it appears that year on year, the use of adjudication is growing although at a far greater rate that had been expected. It is however noted that many in the industry are still completely unaware of the existence of the Act, the payment provisions and adjudication and ongoing publication of the existence of this piece of legislation will be required. It is also to be acknowledged that the existence of the payment provisions and the opportunity to suspend for non payment under the ACT will also have assisted the resolution of disputes prior to the need for a step into the adjudication process. It will be interesting to see what changes another year might bring in respect to adjudication.
For a full copy of the annual report including copies of the previous years report please follow the link here to the Construction Contracts Adjudication Services Website.
Keith Kelliher is an Accredited Adjudicator, who has represented Main Contractors and Sub-Contractors in payment disputes for over 20 years in the Irish construction industry. Keith has represented numerous parties in the Adjudication process to date in Ireland from referral through to a decision. Contact Keith at [email protected] for any assistance with the requirements of the ACT. This article is a commentary piece and does not constitute nor should it be relied upon as legal or professional advice.
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