Adjudicators’ decisions in building contract disputes are binding – court

The High Court has confirmed that adjudicators' decisions in building contract disputes are binding, clarifying a key point in legislation designed to end costly construction rows.

The Construction Contracts Act 2013 makes adjudicators’ decisions in building industry disputes binding until the issue is settled or a different decision is reached by a court or arbitration.

In a key High Court ruling, Mr Justice Garrett Simons recently enforced an adjudicator's decision in a dispute between subcontractor Gravity Construction Ltd and Total Highway Maintenance Ltd, which experts say clarified the law.

Martin Cooney, partner and head of construction at law firm Byrne Wallace, which acted for Gravity in the case, explained that Justice Simons's finding was significant, as it was the first time an adjudicator's decision had been enforced since the 2013 Act came into force.

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Mr Cooney noted that until Justice Simons’s ruling, there had been no judicial interpretation of the law since the adjudication system for construction contracts came into force.

Justice Simons confirmed that adjudications made under the 2013 Act were binding pending the resolution of the dispute by arbitration or legal proceedings.

He said Gravity could “enforce the adjudicator’s decision in the same manner as a judgment or order of the High Court”, unless Total Highway Maintenance paid the award.

In the dispute itself, an adjudicator ruled that Total Highway Maintenance should pay €135,458.92, net of VAT, on April 28th, 2020.

Total Highway Maintenance initially argued that the issue should be referred to arbitration and the payment halted pending the outcome of those proceedings.

Gravity ultimately took High Court action to enforce the adjudicator’s ruling against Total Highway Maintenance, which challenged this on several grounds.

Costs

On December 23rd, Total Highway Maintenance told Gravity it would pay the award, but raised an issue about the legal proceedings’ costs. This led to the hearing before Justice Simons. The judge ruled that Gravity was entitled to its costs.

A subsequent note on the decision by William Brown of law firm Quigg Golden states there are more High Court cases dealing with the issue on the way.

The Oireachtas passed the Construction Contracts Act, 2013 to find a solution to disputes over payments between building contractors and subcontractors, which often dragged on for long periods, costing the parties money.

The late Fergal Quinn, founder of the Superquinn grocery chain, who was a senator at the time, proposed the legislation, making it one of the few private members' Bills to make it into law.

Builders welcomed news that the Oireachtas had passed the legislation, as it created a system for dealing with often complex disputes.