In a release that is months later than usual and after the end of the eight 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 now, received the report in respect to the year that ended in July 2024. The Department of Enterprise on behalf of the Chair of the Ministers panel of Adjudicators, Mr. Bernard Gogarty, has 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, and it also includes some information, where adjudicators chose to submit statistical returns in respect to any adjudications where the Ministers Panel were not 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 marked increase in the in the use of Adjudication in Ireland with a 166% 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, year 6 had 81, year 7 had 61 and now year 8 detailed a breaking of the century ceiling with 101 applications to the panel for appointment of an adjudicator. A 163% 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, increase to 71 in year 6, a decrease to 57 in year 7 and now an increase to 93 in year 8. There was one non-compliant application and for the first time the report includes a reason, in this case the dispute did not relate to construction operations.
Adjudicators
Quantity Surveyors have retaken the lead at the top of the yearly leader board as the profession with the highest number of appointments with 34% (33) of all appointments with Barristers jumping to second with 17% (16) and Architects along with Fellows of the CIArb both at 15% (14). Solicitors come in with 14% (13) and Engineers complete the list at 6% (6). This breakdown does again show a spread of appointments across all professions in the year to July 2024.
The most common rate charged by adjudicators is now stated as set within a broad band width from €201 to €350 per hour, a slight reduction in the band from the previous report. The highest rate charged is recorded in the €500 plus per hour bracket where five cases are reported with one case also appearing in the €101-150 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 45% of the cases on the panel. Main Contractors are also continuing to use the adjudication process as a resolution tool with 35% of cases referred by them against non-Public Body Employers and a further 7% between them and Public Body employers. There is a record of only two cases (2%) been referred by Main Contractors against Sub contractors through the panel this year. Employers referring against Main Contractors was responsible for just three cases in year 8 and we continue to see the use by professional consultants that started in year 5, where a further four cases were referred against their clients. There was 3 cases in year seven 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 50% of reported cases with the respondent successful on 28% of cases. 22% of cases had a split decision issued.
Location of Dispute
Dublin continues to have the largest number of disputes with 56% of cases located in the Capital. The only other county in double digits is Kildare where 13% of cases are located. Munster is headed up by Cork who are responsible for 6%. Galway lead the west with only 1% and the remainder of the counties west of the Shannon reporting no cases in the year. There were no cases reported in Ulster in the year. After the eight year, only Westmeath remains as the county yet to record a case on the system.
Values and Costs
In year 8, following on from a similar situation in year 4, 5 , 6 and 7 a value between €100-500k (27 cases) is the most common value awarded following closely by Nil (22 cases). The remainder of disputes are single digits across all categories. There highest value recorded was on two cases where the award was between €5 million and €10 million.
54% of cases resulted in a total adjudicator cost of less than €10k with a further 25% between €10k and 20k. 21% of cases had a final adjudicator fee of more than €20k over the period with the highest reported fee of between €85-89,999k.
Conclusion
In a year where applications have finally broken through the century ceiling for applications, the continued and growing use of Adjudication in Ireland continues. Year 8 brings up a total of 399 applications through the panel since inception, which resulted in 345 appointments. In the eight years the value in disputes resolved through the process now stands at over €288 million. 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 grow at the current level in year 9.
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 25 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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