The concrete jungle
Solicitor Bernard Gogarty, chair of the Construction Contracts Adjudication Panel, lays the foundations with the Gazette
Construction contracts have, by their very nature, a strong probability of disputes arising, solicitor Bernard Gogarty believes. And he should know, since Bernard advises both employers (public and private) and contractors and has acted as arbitrator and conciliator in construction disputes over the last 30 years.
In July 2021, Bernard was appointed by Minister Damian English to chair the panel of adjudicators provided for by the Construction Contracts Act 2013. That law arose out of the financial crash, which left many subcontractors and contractors unpaid, despite monies being transferred by the employer to the main contractor.
The act is based on the understanding that cashflow is the lifeblood of the construction contracting industry.
An experienced commercial litigator, UCD graduate Gogarty qualified as a solicitor in Ireland in 1979 and in the North in 1992.
He has been a partner in Smyth and Son solicitors since 1984 and has extensive experience in conveyancing, litigation, construction law, and commercial arbitration. He has acted as consultant to several local authorities and has advised many of the major construction and building companies operating in Ireland. He also lectures at Trinity on his specialism.
No one knows
Bernard believes that there is a lack of awareness of the availability of the adjudication process in the legal professions – and, to an extent, in the construction industry itself.
Some parties are not fully aware of the availability of the procedure, which can be commenced at any time, irrespective of whether an arbitration and/ or court proceedings have been commenced, he says.
The jurisprudence so far suggests that Irish courts are highly supportive of the procedure. All applications to court to enforce adjudication decisions have been successful to date.
The legislation is a significant development for ensuring quicker resolution of disputes, Bernard points out. However, he sees a need for clearer protocols in legal practices in dealing with disputes relating to payment if such advice is sought.
It is essential that the legal and administrative parties handling matters (such as receptionists or staff in law offices) understand the urgency of these limited timeframe disputes.
This is especially so in situations where an adjudication has already been initiated and a key party in the solicitors’ office may be on leave.
Built for speed
Solicitors’ practices must be aware that, if they are approached by a client in circumstances where an adjudicator has been appointed, then they must make a decision immediately as to whether or not they will act for that party.
They must be in a position immediately to either advise that client to go elsewhere, refer the matter to the appropriate professional, or take the case on.
All solicitors, even those who are not involved in the construction sector, need to understand the need for speed and the importance of acting within the timeframes of the adjudication processes.
Solicitors must understand the applicability of the process to disputes that they might not consider as ‘construction disputes’.
Such disputes might include circumstances where a professional (such as an architect, engineer, or chartered surveyor), who has acted for either a contractor or an employer and has not been paid their fees, may be entitled to refer the matter to adjudication.
This will have it resolved in the 28/42-day period rather than facing lengthy Circuit or High Court proceedings.
A significant role remains for lawyers in the construction sector, especially in higher-stakes projects, Bernard adds. However, lawyers need to be prepared to work quickly and efficiently, respecting the timelines set out in adjudication processes.
Lawyers should become more proactive in understanding these adjudication processes, Gogarty advises, as they could miss out on significant work if they don’t adapt to the faster pace of adjudication compared with traditional court-based dispute resolution.
Next in line
While the parties have a right to – and should be encouraged to – agree the identity of the adjudicator, the legislation provides that, if such an agreement is not reached within five days, a party may seek the appointment of an adjudicator at any time. This is irrespective of whether a conciliation, arbitration, or litigation has commenced.
The act has provided for the formation of a panel of adjudicators, which contains 35 people of various professions, including architects, engineers, chartered surveyors, solicitors, barristers, and fellows of the Chartered Institute of Arbitrators.
Once an application is made to the adjudication service, an appointment is normally made within seven days. Following an appointment, the referring party must file its referral within seven days from the date of the appointment of the adjudicator.
The adjudicator will then issue a timetable to the parties, with scope for the decision to be made within 28 days of the date of receipt of the referral.
The decision of the adjudicator is binding, unless overturned by a decision of an arbitrator (if arbitration is provided for in the contract) or a court. The decision of the adjudicator is also enforceable by way of notice of motion to the court.
There has, at the date of commencement of the legislation, been no successful challenge to the enforcement of an adjudicator’s decision.
In 2023/24, the number of applications and appointments by the panel was the highest since the act’s commencement. And the combined value of the disputes for that period was €42.2 million, bringing the total value over the last five years to €227.7 million, Gogarty concludes.
Mary Hallissey is a journalist with the Law Society Gazette.