High Court Practice Direction for construction adjudication matters

In this short article we provide a summary of the recent decision by the President of the High Court, Ms Justice Mary Irvine, to issue Practice Direction 105 regarding the enforcement of construction adjudication decisions (https://www.courts.ie/content/applications-pursuant-construction-contracts-act-2013) and which is effective from 26 April 2021.  This direction builds on the momentum of the recent High Court decision (as outlined below) regarding the enforcement of adjudicator’s decisions.

Background to Adjudication within the Construction Sector

The 2013 Construction Contracts Act (the “Act”) introduced much needed reform in the area of construction payment disputes as the previous system (mediation, conciliation, arbitration or court) was largely viewed as ineffective.  Adjudication is viewed as relatively quick, relatively cheap and an appropriate mechanism to enable the successful claimant to get paid.  The Act became effective in July in 2016.

Enforcement of an Adjudication Decision

Data from the UK indicates about 10% of adjudicator’s decisions are challenged in the courts and of these about 1 in 8 succeed in their challenge. Therefore, approximately 98% of adjudicator’s decisions are enforced. The recent decision by the Irish High Court, in GRAVITY CONSTRUCTION LIMITED –V- TOTAL HIGHWAY MAINTENANCE LIMITED 2020/153MCA was the first judgment in Ireland on the enforcement of an adjudicator’s decision. In summary, Gravity Construction Limited (“Gravity”) referred a payment dispute to adjudication, pursuant to section 6 of the Act in March 2020 and were successful in that adjudication, with an award in their favour in late April 2020.  Total Highway Maintenance Limited (“THM”) refused to discharge the sum and sought a referral to arbitration, under the sub contract between the parties. Gravity commenced enforcement proceedings in the High Court seeking the enforcement of the adjudicators decision pursuant to section 6(11) of the Act and Order 56B of the Rules of the Superior Courts. Whilst THM at the point of hearing (26 January 2021) had in effect conceded the proceedings, Mr Justice Garrett Simons gave an ‘unless’ order, that unless all monies were paid within 7 days to Gravity an order would be made against THM.  Simons J noted, inter alia, that adjudicator’s decisions are binding, pursuant to section 6(10) of the Act and he highlighted the need for the enforcement of adjudicator’s decisions to be expedited.

Impact of the High Court Practice Direction

The President of the High Court appointed Mr Justice Simons as the presiding Judge for Adjudication matters and the Practice Direction will enable applications, pursuant to Section 6(11) of the Act, for leave of the Court to enforce or enter judgment and to be made returnable before Mr. Justice Simons at 10:30am on the first available Wednesday. The Judge will give such directions that are considered necessary to ensure that an application will be heard and determined with all due speed.

This Practice Direction will be of considerable benefit to those involved in the construction adjudication process, knowing that matters can be dealt with in an expedited manner.  It will likely lead to the prompt enforcement of decisions and may have a knock on effect on contractors/employers, who have adjudication awards against them, in that they might pay such awards in a timely manner, without the necessity for a claimant to enforce them through the courts.

How can Reddy Charlton help?

Reddy Charlton Solicitors have considerable talent and expertise in the area of construction law. If you have any queries or seek further information on Construction Law or any related area of law, please contact Godfrey Hogan at ghogan@reddycharlton.ie, Peter Kearney at pkearney@reddycharlton.ie or your usual Reddy Charlton contact.