A full six years since Feargal Quinn (pictured) first introduced it to the Seanad as a Private Member’s Bill, the Construction Contracts Act 2013 will come into force on July 25. Minister for Employment Ged Nash has finally signed an order which will give legal effect to the provisions of the Act which, among other measures, establishes the right to regular payments to sub-contractors over the period of their engagement.
One of the key aspects of the new legislation is the introduction of adjudication into the suite of dispute resolution procedures available where disagreements over construction contracts arise.
The legislation provides for a statutory adjudication service which entitles parties involved in a payment dispute to seek to resolve the matter through adjudication. This will take place in a short time period – the Act envisages 28 days.
According to Nash: “This is a significant day in the calendar of events leading to the implementation of this important legislation, which will transform the landscape in which the construction sector operates. Changes to the way construction contracts will now be drawn up will guarantee payment to sub-contractors at regular intervals during the life of a contract.”
Payment Disputes
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Adjudication has been part of the legal landscape for construction contracts in Britain for some time, but there is a potentially significant difference in the Irish Act, which is confined to a ‘payment dispute’ rather than ‘any dispute’ arising under a construction contract.
John O’Brien, whose dispute resolution consultancy has conducted several successful adjudications in the UK, welcomed the ministerial order. “Adjudication is not for the faint-hearted. A claimant must have his ducks in a row before pulling the trigger, as it is a fast and rough process. The adjudicator’s award is immediately enforceable and binding and can only be overturned in a subsequent Arbitrator’s award or by court order," said O'Brien.
“All the same, it is a welcome addition to the existing methods of settling disputes outside of court action — mediation, conciliation and arbitration. It will be quick, which saves in terms of costs. But anyone entering into adjudication must be ready to argue their entire case in a prompt manner, as the process is intended to be speedy and won’t be allowed to drag out.”
Quinn's Bill, introduced in 201o as a response to fall-out from the building bust, passed all stages in the Seanad in March 2011, but didn’t come before the Dáil until 14 months later. Referred to a select committee in June 2012, the Bill came back to the chamber in May 2013 and was signed into law by the President in December 2013. However only now is the commencement order for the legislation taking place.
