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As of 13 April 2016 the Construction Contracts Act 2013 (the “Act”) was finally commenced. The Act will apply to any construction contract entered into from 25 July 2016. It applies to agreements to carry out or procure construction operations and to agreements to provide professional services ancillary to construction including architectural, surveying, design and engineering services. The Act applies regardless of whether parties to the agreement attempt to limit or excl...
As of 13 April 2016 the Construction Contracts Act 2013 (the “Act”) was finally commenced. The Act will apply to any construction contract entered into from 25 July 2016. It applies to agreements to carry out or procure construction operations and to agreements to provide professional services ancillary to construction including architectural, surveying, design and engineering services. The Act applies regardless of whether parties to the agreement attempt to limit or exclude its application.
The most notable development under the Act is the introduction of an adjudication process for disputes relating to payments arising under a construction contract. Contractors and sub-contractors in Ireland commonly experience significant delays in receiving payments which of course can have a detrimental impact on businesses. One of the main purposes of enacting this legislation was to put in place mechanisms to ensure payments are made in a timely manner. The Act introduces statutory obligations on parties in relation to payments due under a contract and provides rights for those seeking payment such as, a limited statutory right to suspend work for non-payment until full payment is made.
Under the Act any party involved in a dispute has the right to refer to adjudication at any point during the dispute. The adjudicator must be appointed within seven days and he/she is legally obliged to provide an ‘Adjudication Award’ within twenty-eight days. Each party bears their own costs in connection with the adjudication.
Given that this is the first Act of its kind in Ireland it is clear that influence has been drawn from related legislation in the UK with which many similarities can be drawn however, one advantage the UK has over Ireland is the provision of a specialist construction court. Many questions will likely arise for the industry in Ireland once the Act begins to impact and no doubt the UK approach will be a helpful resource in considering those.
Please contact Susie Higgins or Killian O’Reilly if you have any queries in relation to the application of the Act, the adjudication process or if you require practical advice as to how the Act will apply to your business.
For a link to the act please click here.