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Mediation use grows in construction disputes

A Matheson briefing note has pointed out that arbitration of construction disputes will remain unaffected by Brexit.

Mediation, conciliation, arbitration and litigation are the most common methods of construction dispute resolution in this jurisdiction, with contract adjudication and expert determination also used.

There are no specialised tribunals dedicated to construction disputes but the use of mediation has gained acceptance since the Mediation Act 2017  came into force on 1 January 2018.

Arbitration is preferred to court litigation in construction disputes, the Matheson lawyers point out, and arbitration clauses are often included in construction contracts, which generally provide for a default appointing mechanism, involving an application to a professional body.

As the effects of Brexit do not extend to arbitration, UK-based arbitration clauses will continue to have full effect.

Status quo

The New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards, to which Ireland, EU member states and the UK are signatories, governs the enforcement of arbitral awards and maintains the status quo in this area, the Matheson briefing note points out.

This may result in arbitration becoming an even more attractive option for dispute resolution than litigation.

The International Chamber of Commerce Arbitration Rules are used in Ireland, and the London Court of International Arbitration is also gaining prominence. For construction in Ireland, there is a preference for the governing law to be Irish law and for the seat of the arbitration to be in Ireland, the briefing notes clarifies.

Government agencies may also participate in private arbitration and be bound by the arbitrators’ award.