As previously reported, the Construction Contracts Act 2013 (the “Act”) commenced on 25 July 2016. The Act applies to construction contracts entered into after that date and, for the first time in Ireland, introduces a new statutory dispute resolution mechanism for construction contract payment disputes, through adjudication by an independent third party. The Department of Jobs, Enterprise and Innovation has now published the following materials relating to the Act:
- Information Booklet on the Construction Contracts Act 2013
- Construction Contracts Act 2013 Code of Practice on the Conduct of Adjudications
Information booklet on the Construction Contracts Act 2013
The information booklet provides a summary of:
- Construction contracts covered by the Act
- Payment procedures under a construction contract, payment claim notices and responses
- Suspension for non-payment
- Adjudication procedures
Code of Practice on the Conduct of Adjudications
The Code of Practice on the Conduct of Adjudications (the “Code”) is a statutory code governing the conduct of adjudication under Section 9 of the Act. A version of the Code published on 5 July 2016 has already been replaced by a version published on 25 July 2016. The Code addresses:
- Appointment: The Code governs the procedures for appointment of an adjudicator whether by agreement of the parties or from a statutorily appointed Panel, which has now been constituted. This includes the service of a “notice of intention” to commence adjudication.
- Rapid decisions: Adjudicators’ decisions on a payment dispute must be reached within 28 days of referral, or 42 days with the referring party’s consent. Decisions must be in writing and unless agreed by the parties, include reasons. Adjudicators’ decisions are binding on parties until the dispute is resolved through agreement, arbitration or litigation. Adjudicators have the ability to invite written submissions/representations and evidence from the parties, but also to hold oral hearings where appropriate.
- Costs: Parties bear their own legal and other costs in connection with the adjudication. The Code provides that Adjudicators’ decisions shall allocate such Adjudicator’s fees as are authorised under the Act, although these should be reasonable having regard to the amount in dispute, the complexity of the issue and the time spent by the Adjudicator.
- Adjudicator responsibilities: the Code requires adjudicators to be independent and impartial and be satisfied that no actual conflict of interest exists. They should be competent to determine the issues in dispute and able to give the adjudication the time and attention that the parties are reasonably entitled to expect.
The scope of the Act is likely to be far reaching within the projects and construction industry. Parties should familiarise themselves both with the Act and the Code and consider the related implications for construction contracts, particularly as regards payments and dispute resolution.