A little later than usual and after the end of the sixth year of adjudication in Ireland has come and gone (The Construction Contracts Act 2013 came into force for any construction contract entered into after the 25th of July 2016, therefore this date is the end of each yearly cycle) we have today, received the report in respect to the year that ended in July 2022. The Chair of the Ministers panel of Adjudicators, Mr. Bernard Gogarty, has today issued the 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 highlights a substantial uptake in the use of Adjudication in Ireland with a 159% increase 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 and now year 6 detailed 81 applications to the panel for appointment of an adjudicator. A larger 192% increase 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 and now a substantial increase to 71 in year 6. There were also four 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.’
Adjudicators
Architects have continued their maintenance at the top of the yearly leader board as the profession with the highest number of appointments with 26% (15) of all appointments with Quantity Surveyors coming up a close second with 24% (14) , followed by Fellows of the CIArb at 16% (9), Engineers at 12% (7) and solicitors at 5% (3). This does show a spread of appointments across all professions in the year to July 2022. The most common rate charged by adjudicators is now set in a band width from €201 to €350 per hour. The highest rate charged is recorded in the €451 to €500 per hour bracket where two cases are reported with a case also appearing in the €151-200 per hour bracket.
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 49% of the cases on the panel. Main Contractors are also continuing to use the adjudication process as a resolution tool with 32% 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 four cases (7%) been referred by Main Contractors against Sub contractors through the panel this year. Employers referring against Main Contractors was responsible for two cases in year 6 and we continue to see the use by professional consultants that started in year 5, where a further two cases were referred against their clients. There were no cases in year six of subcontractors referring against other subcontractors. 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 43% of cases located in the Capital. For the first time since its introduction, there are now recorded cases in Roscommon and Offaly. Munster is headed up by Cork who are responsible for 9%. Galway leads the cases west of the Shannon with 11% of cases in year 6. In Ulster, Cavan was again the only county to have a case. Only Donegal, Leitrim, Sligo and Westmeath have yet to record a case on the system in 6 years.
Values and Costs
In year 6, following on from a similar situation in year 4 and 5, a value between €100-500k (10 cases) is the most common value awarded following closely by €10k-€50k (7 cases) and €50k to €100k (6 cases). There highest value recorded was one case where the award was between €1 - €5 million.
54% of cases resulted in a total adjudicator cost of less than €10k with a further 29% between €10k and 20k. 25% of cases had a final adjudicator fee of more than €20k over the period with the highest reported fee of between €100-105k.
Conclusion
It is not surprising to find a substantial uptake in the number of applications to the panel in Year 6 as the industry deals with COVID, price inflation and the restriction on cash. In the calendar year of 2022, it is likely that the number of applications to the panel will breach 90 for the first time but it is unlikely to reach the magic 100 figure. 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 rise in year 7.
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. A copy of the report is also attached below for download.
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.
Use of Adjudication
The latest report highlights a substantial uptake in the use of Adjudication in Ireland with a 159% increase 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 and now year 6 detailed 81 applications to the panel for appointment of an adjudicator. A larger 192% increase 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 and now a substantial increase to 71 in year 6. There were also four 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.’
Adjudicators
Architects have continued their maintenance at the top of the yearly leader board as the profession with the highest number of appointments with 26% (15) of all appointments with Quantity Surveyors coming up a close second with 24% (14) , followed by Fellows of the CIArb at 16% (9), Engineers at 12% (7) and solicitors at 5% (3). This does show a spread of appointments across all professions in the year to July 2022. The most common rate charged by adjudicators is now set in a band width from €201 to €350 per hour. The highest rate charged is recorded in the €451 to €500 per hour bracket where two cases are reported with a case also appearing in the €151-200 per hour bracket.
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 49% of the cases on the panel. Main Contractors are also continuing to use the adjudication process as a resolution tool with 32% 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 four cases (7%) been referred by Main Contractors against Sub contractors through the panel this year. Employers referring against Main Contractors was responsible for two cases in year 6 and we continue to see the use by professional consultants that started in year 5, where a further two cases were referred against their clients. There were no cases in year six of subcontractors referring against other subcontractors. 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 43% of cases located in the Capital. For the first time since its introduction, there are now recorded cases in Roscommon and Offaly. Munster is headed up by Cork who are responsible for 9%. Galway leads the cases west of the Shannon with 11% of cases in year 6. In Ulster, Cavan was again the only county to have a case. Only Donegal, Leitrim, Sligo and Westmeath have yet to record a case on the system in 6 years.
Values and Costs
In year 6, following on from a similar situation in year 4 and 5, a value between €100-500k (10 cases) is the most common value awarded following closely by €10k-€50k (7 cases) and €50k to €100k (6 cases). There highest value recorded was one case where the award was between €1 - €5 million.
54% of cases resulted in a total adjudicator cost of less than €10k with a further 29% between €10k and 20k. 25% of cases had a final adjudicator fee of more than €20k over the period with the highest reported fee of between €100-105k.
Conclusion
It is not surprising to find a substantial uptake in the number of applications to the panel in Year 6 as the industry deals with COVID, price inflation and the restriction on cash. In the calendar year of 2022, it is likely that the number of applications to the panel will breach 90 for the first time but it is unlikely to reach the magic 100 figure. 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 rise in year 7.
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. A copy of the report is also attached below for download.
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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