The Construction Contracts Act 2013 will be commenced (finally) this year. That means that subcontractors who aren't getting paid will have the right to refer a claim to Adjudication. Adjudication means that binding decisions on contractors compelling them to pay subcontractors monies due can be turned around within 30 days. Remarkable when you think that arbitrations can take years to get to hearing and by that time the subcontractor had gone out of business. However it is näive to think that the 30 day time limit is absolute and that the adjudication decision will mean immediate payment to the subcontractor. So here are some tricks up the sleeves of contractors that they will inevitably use to slow down the process and to negotiate a better hand:-1. Extension of time applications during the adjudication. These will be limited to two week extensions. Not much gain here except some frustration. 2. Contractor does not respect the award, which is binding pending it being overturned by the High Court or in arbitration, which means the subcontractor will have to apply to the High Court to enforce the adjudication decision. 3. Subcontractor having had to pay his own legal costs in the adjudication (there being no ability to have an Order for Costs made against the losing party) now has to spend more money on lawyers to enforce their right to the monies awarded in the adjudication before the High Court. Deep pockets need only apply. 4. Contractor takes advantage of the unreadiness of Courts Service and High Court bench whereby there is no fast tracking mechanism for the enforcement of adjudication decisions or challenges to those decisions. Compare that the construction Court in the UK which turns these enforcement/challenge actions around in the High Court in 4 weeks. Lightening quick!5. Contractor challenges the legality of the adjudication award before the High Court on every level. That usually includes the breach of natural justice, fair procedures and all sorts of constitutional palaver on the basis that the contractor did not have enough time to prepare their defence. It's realistic to predict at least 5 High Court challenges in the first year of adjudication being introduced. The penny will ultimately drop that the Courts will support this process as a matter of public policy. 6. Contractor appeals the High Court decision dismissing the challenge to the adjudication award to the Supreme Court on the basis of a breach of constitutional rights. Without priority listing, the appeal could languish in a 2 year waiting list. This is all quite predictable if cash is tight, the claim for payment is big enough, it is a final account squabble and the relationship has broken down.
The UK judiciary has demonstrated a strict approach in their consideration of challenges of adjudication awards. The ‘first blush’ opinions of some of the most senior members of the Irish judiciary to date indicate that the same fair judicial wind might not automatically automatically be relied upon in this jurisdiction. Absent the contractual assent of the parties, in circumstances where a complaint of ‘rough justice’ is made and premised on constitutional concepts, the Irish Courts may well apply the lens of ‘strict scrutiny’ to a dispute resolution process not assented to by the parties in contract but rather imposed by way of statute. An important feature of adjudication is that each party will pay their own legal and other costs and the adjudicator’s costs will be discharged in accordance with his/her decision.