Following the enactment of Construction Contracts Act 2013 (“CCA”) from 25 July 2016, all construction contracts (defined in the Act), entered into in Ireland, are required to have prompt payment provisions within the construction contract (or have them implied as per the Schedule contained in the Act).
Are you thinking about adjudication?
It is vital that you comply with the requirement of the Act in relation to payment claim notices and that it is issued as per the Contract. See the Article which sets out the pitfalls of failing to comply with the notice.
When can you refer a Payment Dispute to adjudication?
Possible steps in the adjudication
1. Referral document
Before you issue your notice of intention to refer, you should have completed your referral document. This document sets out the background of the dispute, the contractual framework, and details substantiating your claim.
2. Notice of intention to refer a payment dispute
To commence a reference to adjudication, a party will have to issue a notice of intention to refer a payment dispute under the CCA.
3. Referring Party issues it Referral Document
Once the adjudicator is appointed and the referral document has been issued to both the adjudicator and the other party (the “Responding Party”).
4. Responding Party's response
The Responding Party generally has 7-14 days in which to respond. The response is likely to include a counter claim. This claim may not necessarily have been provided to the Referring Party before the commencement of the adjudication.
5. Possible Rejoinder
If the responding party’s response included a counter claim, the referring party will have an opportunity to issue a response to the counter claim.
5. Possible hearing/further exchanges
The adjudicator having received all of the documents which the parties wish them to consider, can then determine whether they can make a decision, based on the documents only or whether there are issues of fact which would need to be considered at a meeting.
If a meeting is required, depending upon the issues, the parties may have legal representation. The meeting is convened for the benefit of the adjudicator to understand all of the issues.
6. Adjudication decision
Essentially, a payment dispute which is adjudicated upon will result in an award to one of the parties which will (in most cases) require a payment, therefore it is essential that you present the best possible case.
The process itself is designed to be quick 28 days from the referral (or such period longer period as may be agreed by the referring party or both parties after the dispute has been referred).
7. Temporarily binding / limited grounds to refuse to comply with adjudicator's award.
The decision is “temporarily binding” , that means you will have to comply with the Adjudicator’s Award.
There are limited grounds to refuse to comply with the Adjudicator, if you feel that the Adjudicator has answered the wrong question or there are circumstances of bad faith.