Concern about Quinn Bill on construction arbitration (adjudication)

The Construction Contracts Bill  (Click for bill)  was initiated in the Seanad by Feargal Quinn.  A recent report in the SBP suggests that this is likely to be adopted by the government and enacted before the election. It is apparently with the A-G at the moment.

It essentially proposes a system of fast track arbitration, styled as ‘adjudication’ into disputes over contract payments between various parties in the construction chain (‘employer’- main contractor-sub-contractor etc).

While the objective of speeding up disputed payments is a laudable one especially in the current climate facing the construction industry there are significant concerns about the bill within sections of the construction related professions (engineers, architects, surveyors etc) and within the arbitration ‘community’.

In principle it sounds fine; but it draws on a UK model which has been the subject of much criticism, and there are alternative models (New South Wales) which are regarded as superior. Something between the two might be an option.

Notably, the precise limits of the ‘chain’ is an issue.  (Does it include a solicitor drafting a contract at the end of the chain as well as a main and a sub contractor?)

Also there are issues about how a dominant party can abuse the process to strong-arm weaker parties within the tight time frame for the adjudication. This danger is anathema to fair procedure concepts associated with arbitration.

There is no urgency about this Bill. Such a measure is, in principle a good idea but the detail needs to be refined. Little of this was done in the Seanad which in this case at least has reinforced critics as to its role.

Much better to let the civil service do what it does well and extend the period of consultatiom on the measure with a view to bringing an improved version to the Dail later in the year.

A group representing engineers, architects, surveyors etc is very critical of the measure and has made its views known in a paper submitted to the Government. I can make it available (with the approval of the authors) on request.

As a general arbitrator some of the issues involved here are, frankly beyond my experience (and I suspect beyond Senator Quinn’s) but we should not ignore the views of those with practical experience of the operational strengths and weaknesses of existing provision.

But the paper describes how a dual process of adjudication would solve many of the perceived problems with adjudication in the building and construction industry. The proposed dual process is a combination of the existing process of adjudication in NSW, Victoria and Queensland, which is described as the certification process, and the process of adjudication in the UK, NZ and elsewhere: the traditional process.

Under the dual process, the procedure for adjudicating progress claims would be slightly different to the procedure for adjudicating ‘ex–contractual claims’for debt or damages.

This is something which should not be rushed. Better to wait and do it well than just add to a list of swan song enactments. There are dangers in creating legal rights in a situation where there is such uncertainty as to their implications.

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