Dr Nael G Bunni, Chairperson of the Ministerial Panel of Adjudicators has submitted a third Annual Report on the implementation of the Construction Contracts Act, 2013 to the Minister of State with responsibility for the Act, Mr Pat Breen TD. The third Annual Report covers the period from 26 July 2018 to 25 July 2019.
The report indicated that there were 32 applications seeking the appointment of an adjudicator during the reporting period.
Figure 1 below, shows the distribution of payment disputes, which unsurprisingly shows that the majority of the disputes were initiated by the Subcontractor against the Main Contractor.
The value of the disputes are shown in Figure 3 (extracted from the report) and range from €10m+ to €10k.
Of the 32 adjudications, 26 decisions were issued. The report states that 15 of those decisions saw the referring party successful, 7 the responding and 4 were split decisions.
In terms of timescale for the decision, the Act requires a decision in 28 days (extendable by 14 days by the referring party) or such other period agreed by both parties. From the report, of the 26 decisions, 16 were beyond the 28 days but within 42 days, 5 were within 28 days and 5 were presumably over 42 days.
Finally, the report covers adjudicators fees, which range between €200 – €400 per hour and total fees charged by the Adjudicator. The ‘Code of Practice Governing the Conduct of Adjudications’ requires that the fees charged by an Adjudicator should be reasonable in an amount having regard to the amount in dispute, the complexity of the dispute, the time spent by the Adjudicator on the dispute and other relevant circumstances. Figure 9, taken from the report, shows the total fees.
Our experience of adjudication to date is that it can be an effective means of sorting out discrete issues as long as you are aware of the potential pitfalls and costs.