Use of Adjudication
The latest report, highlights a reduction in the use of Adjudication in Ireland with a 25% reduction year on year in the number of applications to the panel. From a low base of one application in Year 1, to 11 in Year two, Year three had 39, Year 4 had 54, year 5 had 51, year 6 had 81 and now year 7 detailed 61 applications to the panel for appointment of an adjudicator. A 20% reduction in actual appointments took place year on year from 0 in year 1, to 9 in year 2, to 32 in year 3, 46 in year 4, a drop to 37 in year 5, increase to 71 in year 6 and now a decrease to 57 in year 7. There were also two non-compliant applications. Nothing is again noted in the report as to who or what has decided that an application is non-compliant other than the report notes that they were deemed to be non-compliant with the legislation or the application requirements set out in the ‘Code of Practice Governing the Conduct of Adjudications.’
Architects have continued their maintenance at the top of the yearly leader board as the profession with the highest number of appointments with 31% (18) of all appointments with Quantity Surveyors coming up second with 17% (10) along with Fellows of the CIArb again at 17% (10), Solicitors now over taking Engineers at 14% (8) and Engineers at 12% (7). Barristers account for 9% of appointments (5). This does show a spread of appointments across all professions in the year to July 2023. The most common rate charged by adjudicators is now set within a broad band width from €201 to €400 per hour. The highest rate charged is recorded in the €451 to €500 per hour bracket where three cases are reported with two cases also appearing in the €151-200 per hour bracket and seven cases noted as no charge.
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 was responsible for 58% of the cases on the panel. Main Contractors are also continuing to use the adjudication process as a resolution tool with 21% of cases referred by them against non-Public Body Employers and a further 5% between them and Public Body employers. There is a record of only two cases (4%) been referred by Main Contractors against Sub contractors through the panel this year. Employers referring against Main Contractors was responsible for just one case in year 7 and we continue to see the use by professional consultants that started in year 5, where a further three cases were referred against their clients. There was 2 cases in year seven of subcontractors referring against other subcontractors and also a case of a subcontractor referring against an Employer. There continues to be 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 67% of reported cases with the respondent successful on 22% of cases. 11% of cases had a split decision issued.
Location of Dispute
Dublin continues to have the largest number of disputes with 53% of cases located in the Capital. For the first time since its introduction, there are now recorded cases in Donegal, Leitrim and Sligo. Munster is headed up by Limerick who are responsible for 7%. There is no leader in the west with with a couple of counties having 2% of cases in year 7. In Ulster, Donegal and Monaghan also lead the way with 2% of cases. Louth has the overall second highest number of disputes with 125 of cases. After seven year, only Westmeath remains as the county yet to record a case on the system.
Values and Costs
In year 7, following on from a similar situation in year 4, 5 and 6, a value between €100-500k (13 cases) is the most common value awarded following closely by €30k-€50k (8 cases) and €50k to €100k (8 cases). There highest value recorded was one case where the award was between €500k -€1 million. 59% of cases resulted in a total adjudicator cost of less than €10k with a further 28% between €10k and 20k. 14% of cases had a final adjudicator fee of more than €20k over the period with the highest reported fee of between €30-35k.
It is probably not surprising to find a reduction in the number of applications to the panel in Year 7 on the back of the large jump that took place in Year 6. Year 7 had the second highest number of applications since the Act came into play. It was also noted that two adjudicators retired from the panel in the period bringing the number of Adjudicators available for appointments down to 33. Adjudication is clearly now seen as a real option for the resolution of disputes in Ireland and it is likely with current market conditions that the numbers continue to stay at the current level in year 8.
For a full copy of the annual report including copies of the previous year’s 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 firstname.lastname@example.org 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.