The Construction Contracts Act, 2013 regulates payments, particularly the timing of payments, under a construction contract covered by the legislation. It provides a right for a party to a construction contract to refer a payment dispute for adjudication as a means of swiftly resolving the dispute.
The Act also provides that if a contractor or subcontractor is denied full or part payment as set out in a payment claim notice, the contractor or subcontractor may suspend work under the construction contract by giving notice in writing to the other party. In addition, the contractor or subcontractor may decide to refer the payment dispute for adjudication under the Act, and the suspension of work must then be lifted.
Section 4 of the Construction Contracts Act, 2013 sets out the procedural requirements in relation to the issuance of a payment claim notice by an executing party under a construction contract and of the response to the payment claim notice by the other party.
The judgment referred to by the Deputy concerned an application for leave to enforce a decision of an Adjudicator by a contractor, which was resisted by the contractor’s employer. The judgment found that the Adjudicator had erred in law in determining that the employer’s failure to deliver a response to the payment claim notice triggered an entitlement, on the part of the contractor, to payment in full for the amount specified in the payment claim notice. The judgment has provided an important clarification in relation to the operation of section 4 of the Construction Contracts Act, 2013.
I am satisfied that the adjudication process under the Construction Contracts Act, 2013 continues to provide effective solutions to parties who have been denied full payment or part payment under a construction contract. The operation of the legislation will be kept under review.
