Construction Adjudication in Ireland – a guide for engineers
27 March 2017
Anthony Hussey is well known to many Engineers Ireland members as a significant figure in Irish construction-dispute resolution. He has served for several years on the organisation’s Dispute Resolution Board. In that time, he has contributed significantly through speaking at conferences and seminars and through his preparation of a number of the Engineers Ireland procedures, particularly in arbitration and expert determination.
His firm, Hussey Fraser Solicitors, has been involved in many of the largest and most contentious construction disputes to have arisen in this country in recent decades, while on a personal level, Hussey frequently acts as arbitrator, both in this country and internationally. He has also acted as adjudicator.
Consequently, Hussey’s recently published book, Construction Adjudication in Ireland, is likely to be of interest to many members of Engineers Ireland.
The book has been written in response to the Construction Contracts Act 2013, which applies to all construction contracts, as defined in the Act, entered into after 25 July 2016. The Act sets out to do two things, namely to regulate payment arrangements for such construction contracts and also to provide a dispute-resolution mechanism, adjudication, which is intended to provide a speedy and binding, but not generally final, determination of “any dispute related to payment arising under the construction contract”.
The Construction Contracts Act 2013 is comprised of 12 sections and it is to be read in conjunction with the Code of Practice governing the Conduct of Adjudications published under section 6 of the Act.
Issues of legal interpretation and case law
At the outset, Hussey says his book is intended for a “wide audience” of people involved in construction projects and he has attempted to apply “a light touch” when dealing with issues of legal interpretation and comparative analysis of the case law from Irish and other jurisdictions.
The book is well laid out and consists of 190 pages in 14 chapters, together with the Act and Code of Practice in two appendices at the end. It is also provided with an index and a short list of abbreviations, together with some ten pages of legal cases referred to in the book.
There is extensive reference to international practice, not only from the United Kingdom but also Australia, New Zealand, Isle of Man, Singapore and Malaysia. Clearly, “a light touch” does not equate with a superficial treatment of the topic; hardly a surprise to anybody acquainted with Anthony Hussey.
The book follows the structure of the Act and deals with the 12 sections in turn before also covering the Code of Practice. However, it does not involve a slavish recitation of either document, but instead involves a careful and comprehensive assessment of each of the provisions in an effort to see how they will operate in practice. In each case, this is done by reference to international practice and how such practice might be followed in this country.
Hussey does not shirk from the deficiencies in the Irish legislation and, in fact, he acknowledges this at the outset where he simply says: “Unfortunately, the Irish Act itself is also far from perfect.” Nor does he hesitate to say that the Irish provisions for enforcement of adjudicators’ decisions are unnecessarily complicated and could have been streamlined as has been done in New Zealand for example.
Hussey is generally constructive and positive in his approach while dealing with the deficiencies in the Act in such areas as:
- S5(5), where Hussey points out the Act says the opposite of what was clearly intended by the legislature;
- S7(3)(b), where, bizarrely, the Act prevents an executing party from suspending work despite an unpaid adjudicator’s decision in its favour once the matter has been referred either to arbitration or litigation; and
- S4(3), where the consequences of failure to respond to a Payment Claim Notice are entirely unclear.
However, the most significant contribution of the book is probably Chapter 13, under the title ‘Constitutional Issues’, where Hussey considers the likely response of the Irish courts to issues of constitutional and natural justice. In my view, that chapter will be particularly beneficial to engineers, and all non-lawyers, with any involvement in a process leading to any form of determination. That would include arbitration but would also cover disciplinary or workplace enquiries that could result in an outcome which might be prejudicial to an individual.
Irish courts and constitutional and natural justice
The response of the Irish courts in relation to natural justice and fair procedure is likely to have a very significant impact on the practice of adjudication in this country and could prevent it having a significant impact on construction dispute resolution. Hussey suggests that the importance attached to constitutional and natural justice by the Irish courts may lead to a very narrow interpretation of the expression “any dispute relating to payment”, rather than the much wider interpretation that many in the industry have anticipated.
Hussey also raises the question of how the Irish courts will respond when asked to enforce adjudicators’ decisions containing obvious errors of fact or law. Elsewhere, particularly in the UK, the approach has been to robustly enforce such decisions, most famously in the case of Bouygues (UK) Ltd v Dahl-Jensen (UK) Ltd . Hussey suggests the Irish courts may have much less appetite for such an approach.
Clearly, the Construction Contracts Act 2013 is going to have a significant impact on payment provisions, particularly in the case of subcontractors, who may enjoy much more favourable payment terms than the main contractors for whom they are working. On the other hand, the significance of the adjudication provisions of the Act is less clear and, as pointed out in the book, if adjudication is to flourish it will be necessary for the courts to give it life by interpreting, and applying, the Act purposefully.
Construction Adjudication in Ireland will be of considerable benefit to anybody involved in construction projects; however, it will be indispensable for anybody involved, or likely to become involved, in adjudication. The book is well written and clearly laid out while the analysis is cogent, comprehensive and balanced. Because of this, it is likely to be very widely consulted and referred to when the anomalies and unanswered questions thrown up by the Construction Contracts Act and the Code of Practice are being dealt with.