An end to ‘smash and grab’ adjudications in Ireland

Byrne Wallace Shields LLP recently acted for Tenderbids Limited (“Tenderbids”) in its application to the High Court to enforce an Adjudicator’s decision  pursuant to the Construction Contracts Act 2013 (the “CCA 2013” or the “Act”). In the underlying decision of 25 April 2025, the Adjudicator recognised Tenderbids’ entitlement to the whole of the sum notified under its payment claim notice (the “PCN”), where the PCN had been ignored by its employer, Electrical Waste Management Limited (“EWM”). The Adjudicator consequentially awarded payment of the whole of the notified sum to Tenderbids in what is colloquially referred to as being a ‘smash and grab’ type adjudication.

By way of background, in November 2024 Tenderbids had made an unsuccessful application to the High Court to enforce an earlier Adjudicator’s decision concerning the same payment dispute (see this link to our previous article). That application failed owing to the non-compliant service of the document known as the ‘notice of intention to refer a payment dispute for adjudication’, which rendered the subsequent appointment of the Adjudicator and the consequent proceedings a nullity.

For ease of comprehension, this article makes reference to the original High Court proceedings and judgment of March 2025 as “Tenderbids 1”, whereas the judgment of 12 January 2026, in which the High Court identified that ‘smash and grab’ adjudication was absent a statutory footing is “Tenderbids 2”.

Summary of the High Court Judgment

Mr Justice Simons’ judgment in Tenderbids 2 includes the pivotal finding that the Adjudicator had erred in law in their interpretation of the CCA 2013 having reached the decision that EWM’s failure to deliver a response to the PCN (under section 4(3) of the CCA 2013) gave rise to Tenderbids’ entitlement to receive payment from its employer of the full amount as specified in the PCN. However, the CCA 2013 prescribes no outcomes, adverse or otherwise, in circumstances where an employer belatedly contests the sum due under a payment claim notice but fails to issue a response within the statutory period of 21 calendar days. 

Accordingly, the judgment in Tenderbids 2 has effectively extinguished the broadly held premise that an adjudicator in Ireland, acting on their individual interpretation of section 4 of the CCA 2013 and in consideration of the facts of the dispute presented before them, enjoyed the jurisdiction to infer legal consequences from an employer’s failure to respond to a payment claim notice within the statutory period. Where the adjudicator adopted this approach, the resultant decision routinely included the award of the whole of the notified sum to the contractor.  

In Tenderbids 2 the Court decided that for an adjudicator to impose a detrimental outcome that is not explicitly provided for by the CCA 2013 amounts to an error of law, and one that goes to the “very core of the adjudication process”. Further, for the High Court to enforce such a decision, with its attendant draconian consequences for the employer entity (particularly absent an assessment of the underlying merits of the contractor’s entitlement to the notified sum, which effectively denudes the employer of a defence in adjudication), would be to turn a blind eye to procedural unfairness. In this particular case, the Court elected to invoke its discretion not to enforce the Adjudicator’s decision - not for reason of any procedural fairness caused to EWM specifically, but to “ensure the integrity of the statutory scheme” of adjudication.

This article analyses the parties arguments and the High Court’s determination of Tenderbids 2 and its far-reaching consequences for the Irish construction sector noting that underlying to particular excerpts reproduced from the judgment have been added for emphasis. 

The Payment Dispute

As background to the dispute, Tenderbids was engaged by EWM to carry out the construction of a waste metal recycling facility. The contract between the parties was in the form of the RIAI (Blue form) Construction Contract where quantities do not form part of the contract. The project had been certified as practically complete under the parties’ construction contract in 2023.

A payment dispute arose between the parties during the currency of the construction project. The payment dispute, which was the subject of adjudication, arose on foot of the PCN issued by Tenderbids to EWM, in accordance with section 4(1) of the CCA 2013. EWM failed to respond to the PCN within the prescribed 21 days from the date of the notice and on 18 March 2025 Tenderbids re-referred the dispute to adjudication pursuant to section 6(2) of the CCA 2013 and in accordance with the terms of the parties’ construction contract.

The Second Adjudication 

On 1 April 2025, an Adjudicator was appointed by the Chair of the Minister’s Panel of Adjudicators in line with section 6(4) of the CCA 2013 in respect of the payment dispute between the parties. Tenderbids sought from the Adjudicator, among other things, a declaration that EWM did not issue a valid response to the PCN, a decision in support of Tenderbids’ entitlement to the whole to the amount claimed in the PCN and payment of same, in what is pejoratively known as a ‘smash and grab’ claim.

As a key distinction between this second adjudication and the Tenderbids 1 adjudication - EWM fully participated in the second adjudication and, importantly, conceded to what Mr Justice Simons in Tenderbids 2 later referred to as being the “default direction to pay” point or the “default decision” principle. The default direction to pay/default decision being in reference to an acceptance by EWM that, as a consequence of its failure to respond to the PCN, it created an entitlement for Tenderbids to receive payment of the whole of the amount specified in the PCN.

In this second adjudication, EWM made no express objection to the jurisdiction of the Adjudicator, only that there had been a breach of fair procedures as the Quantity Surveyor on the project was also the Managing Director of Tenderbids and that the contract between the parties did not accommodate the payment sought as Tenderbids had not confirmed oral instructions in writing, i.e. an assessment of entitlements under the contract. 
The Adjudicator did not accept that EWM was deprived of any ability to respond to the PCN and that EWM was aware of the Quantity Surveyor’s role with Tenderbids when the contract was entered into. 

The Adjudicator did note, in response to EWM’s argument that the claim under the PCN exceeded the contract parameters, that the Adjudicator had not been asked by either party to determine the true value of the works in accordance with the Contract and therefore had no jurisdiction to do so.  

The Adjudicator’s decision was communicated to the parties on 25 April 2025.

The Adjudicator’s Decision

The Adjudicator ultimately decided that Tenderbids was entitled to the reliefs sought in the adjudication. The Adjudicator determined that EWM did not issue a response to the PCN within the required 21 days under section 4(3) of the CCA 2013; that Tenderbids was entitled to payment in full for the amount claimed in the PCN (plus interest and compensation) and that EWM should pay the fees and expenses of the Adjudicator. 

EWM failed to comply with the decision of the Adjudicator: no sums were discharged to Tenderbids and the professional fees of the Adjudicator remained unpaid prior to the commencement of the enforcement proceedings. 

Tenderbids therefore initiated enforcement proceedings of the Adjudicator’s decision pursuant to Section 6(11) of the CCA 2013. 

Grounds and Legal Arguments Challenging Enforcement 

In Tenderbids 2 EWM sought to resist the enforcement of the Adjudicator’s decision on five grounds, one of which was retracted while the fifth and final ground was reserved for a modular second hearing, which, on the findings of Mr Justice Simons, was ultimately not required.
Judge Simons allocated the remaining grounds and the arguments heard before the Court into three issues and two salient legal arguments, as follows:

Argument 1:  that the right to a ‘default decision’ (i.e. the requirement to make payment of the whole of the notified sum in the absence of a statutory response to a payment claim notice) is one which arises under the CCA 2013 alone and not under the parties’ construction contract and is therefore absent a right to refer, this argument is referenced here as the “Jurisdictional Argument”; and

Argument 2: that there is no right to a ‘default decision’ in adjudication, therefore that the relief sought by Tenderbids in the underlying adjudication must be invalid, referred to by this article as the “Reliefs Argument”.

These arguments were permitted by the Court on an exceptional basis, despite EWM’s earlier concession made in adjudication to the effect that it agreed to both the existence and effect of the ‘default decision’, being a matter at the centre of Tenderbids 2. 

The Jurisdictional Argument is premised on the right to refer a construction payment dispute to statutory adjudication pursuant to section 6(1) of the CCA 2013, which provides as follows:

“A party to a construction contract has the right to refer for adjudication in accordance with this section any dispute relating to payment arising under the construction contract (in this Act referred to as a “payment dispute”).”

While it was accepted by EWM that the parties were engaged under a ‘construction contract’ as defined by section 1(1) of the CCA 2013, it was however a matter of contention that the failure to respond to the PCN within the period of 21 days a dispute pertaining to payment under the construction contract itself, but rather a contrivance of the CCA 2013 that should not be read into the construction contract. 

On this justification, EWM advanced the argument that a payment dispute arising from the operation of the CCA 2013 itself (i.e. section 4(3) and a failure to respond) would not engage the statutory right to refer that ‘payment dispute’ to adjudication as is provided for by section 6(1) of the CCA 2013. Bereft a right the refer, the underlying adjudicator’s appointment is rendered a nullity and therefore the adjudicator’s decision is incapable of enforcement. This argument was ostensibly supported by an interpretation of the High Court’s determination of Connaughton v. Timber Frame Projects Ltd [2025] IEHC 469, the divergent facts of which are germane to common law damages, which do not give rise to a payment dispute under a construction contract.

The Jurisdictional Argument additionally considered whether a failure by EWM to respond to the PCN could constitute a payment dispute for the purposes of the CCA 2013.

The Jurisdictional Argument attracted the vast majority of the parties’ preparation time and written legal submissions, but was not argued to its full extent before the Court. The Jurisdictional Argument was refined during the hearing of Tenderbids 2 to present concession that the payment claimed by the referring party must be one which is: (i.) expressed by or stipulated in the construction contract; and/or (ii.) one which is implied into the contract by dint of the CCA 2013.

Mr Justice Simons decided the Jurisdictional Argument in recognition that sections 3 and 4, plus the Schedule to the CCA 2013 confer contractual or statutory prescribed terms (as required) and rights upon the parties. In the Court’s judgment, it would be “…absurd to interpret the Construction Contracts Act 2013 so as to exclude the very rights, which the Act itself confers, from the scope of the adjudication process created under the same Act. Rather, the proper interpretation is that the newly conferred terms and rights are enforceable by way of adjudication.”

To clarify matters further, Mr Simons’ judgment elucidates that a referring party in adjudication “… must either be asserting or resisting a claim to a payment which is expressed or stipulated in the terms of the construction contract (including any terms implied into the construction contract by the Act) or is provided for under the Act. This element is a prerequisite to a valid referral to statutory adjudication” and was found to be present on the facts of Tenderbids 2, meaning that the adjudication process cannot by retrospectively invalidated was not a nullity as EWM had argued.

As a corollary to the foregoing findings, a failure to respond to a payment claim notice by the conclusion of the 21-day statutory window does however crystalise a ‘payment dispute’ under a construction contract in Ireland.

The Reliefs Argument became the primary focus of the October 2025 hearing and attracted Mr Justice Simons’ assessment of the supposed reliefs and outcomes prescribed by the CCA 2013. On the facts of the case as ventilated by the notice of intention to refer and the referral document, Tenderbids’ claim and the Adjudicator’s jurisdiction were constrained to the consideration of the failure to respond to the PCN. The principal relief sought being the award the whole of the sum notified under the PCN and without undertaking an assessment of Tenderbids’ entitlement to the sum claimed (an exercise that has come to be known in the sector as a ‘true value’ assessment), i.e. the ‘default decision’.

The Reliefs Argument was not articulated during the currency of the adjudication, with Mr Justice Simons extrapolating that During the hearing Mr Simons reflected on the curious juxtaposition whereby the CCA 2013 provides for a consequence where an employer, who, having accepted that a lesser sum is due in payment to a contractor is required to pay that amount, however, where no response is given by the employer to the contractor’s payment claim notice, no consequence is expressly stated to follow that omission. Mr Justice Simons observed that this silence in the CCA 2013 was not necessarily determinative of the issue and proceeded to consider what “…may properly be implied from the language used and the legislative context.”“Generally, the failure to raise a point before the adjudicator will be fatal to any attempt to rely on that point to resist subsequent enforcement proceedings. There is both a principled and a pragmatic reason for this...”, that “[t]he parties are expected to present their case in full to the adjudicator. This is because the Act envisages that the payment dispute will, initially, be heard and determined by the adjudicator alone” and “[i]t will not normally be possible for a party, who has participated in the adjudication process without objection, to resist enforcement proceedings by raising an objection for the first time before the High Court.” In this instance however, this new argument met the threshold for an exceptional departure from that generality, a decision taken in recognition of the importance of the matters in dispute to the operation of the CCA 2013 and to the statutory adjudication regime.

As part of the enforcement proceedings EWM’s Senior Counsel developed the Reliefs Argument to the effect that no such reliefs and outcomes of the type sought by Tenderbids in adjudication exist under the CCA 2013. Exemplars of EWM’s arguments include a critique of section 4 of CCA 2013, the wording of which neither stipulates nor suggests that a failure to respond to a payment claim notice is to be met with an obligation on the part of an employer to make any payment. Much less, the CCA 2013 does not prescribe an obligation for an employer to make payment of the whole of the notified sum, nor does the legislation stipulate or allow for matters of legitimacy of entitlement are to be disregarded by the adjudicator seized of the dispute.

The Reliefs Argument additionally identified the potential for unintended and enduring consequences arising from an adjudicator’s decision (once enforced by way of High Court Order), if the Court were to find that the CCA 2013 allowed for a ‘default decision’, requiring an employer to make payment of the whole of the notified sum. This argument was posited in the context that the Oireachtas had intended for an adjudicator’s decision to be ‘provisionally binding’ only, the implication being that where an entitlement to pay whole or part of a contested notified sum sits withing the CCA 2013, as opposed to a decision to make such payment arising from an adjudicator’s interpretation of the law, this could hold implications for any subsequent litigation or arbitration of the dispute. Should this be the case, the CCA 2013 would presumably also need to provide for a mechanism to redress the imbalance created, or to clarify that the obligation to pay is interim binding – if that was the intention of the legislature. Tenderbids’ Senior Counsel submitted that a ‘default decision’ was indeed interim binding and subject to challenge in the guise of a secondary ‘true value’ adjudication or through the parties’ dispute resolution processes, either a substantive hearing of the matter in the Courts or through arbitral proceedings.

While Mr Justice Simons reaffirmed the High Court’s role, being one which is “confined to considering whether an adjudicator’s decision should be enforced on a provisional basis, i.e. pending any arbitral or court proceedings. The enforcement procedure provided for under the legislation is summary in nature. The High Court is not acting as a court of review, still less as a court of appeal, from the adjudicator’s decision”, there was also judicial recognition in consideration of the potentially unintended consequences flowing from a ‘default decision’, chiefly that “[i]t is not at all clear that this is the only proper implication to be drawn from the Act. On at least one view, the terminus of the contractor’s argument, if followed through to its logical conclusion, is that a paying party who fails to respond to a payment claim notice should be precluded from ever contesting the underlying merits in any forum. This is because there is nothing in the wording of section 4 of the Act which indicates that the payment claim notice procedure is intended to have relevance only in the context of an adjudication…”.

In evaluating the Reliefs Argument and the ‘default decision’ principle (including the Adjudicator’s reasoning that there was no basis to conduct an assessment of the underlying merits of Tenderbids’ claim and purported entitlement), Judge Simons observed that while “it is open to the legislature to circumscribe the extent of the procedural rights afforded at first instance …it is not open to an adjudicator to deny a right of defence without legislative authority.”

Considering the wording of section 4 and the broader context of the CCA 2013 itself, Mr Justice Simons found that section 4 “…is silent as to what is to happen in the event that no response is delivered to a payment claim notice. It is nowhere expressly stated that—in the absence of having delivered a response to the payment claim notice—the paying party is required to pay the amount specified in the notice. This is to be contrasted with the approach taken under the section to the contingency of the paying party having proposed to pay a lesser amount in its response to the payment claim notice. It is expressly stated that the paying party “shall pay the amount” by the day on which the amount is due.” 

During the hearing Mr Simons reflected on the curious juxtaposition whereby the CCA 2013 provides for a consequence where an employer, who, having accepted that a lesser sum is due in payment to a contractor is required to pay that amount, however, where no response is given by the employer to the contractor’s payment claim notice, no consequence is expressly stated to follow that omission. Mr Justice Simons observed that this silence in the CCA 2013 was not necessarily determinative of the issue and proceeded to consider what “…may properly be implied from the language used and the legislative context.”

The difficulty faced by the Court was whether to imply into the CCA 2013: (i.) an obligation to pay the amount specified in a payment claim notice unless a response in contest had been delivered within the prescribed 21-day period; and (ii.) an entitlement on the part of the contractor to a ‘default decision’ in the amount specified in the payment claim notice and without challenge to the underlying merits of the contractor’s claim. 

Tenderbids’ argument in reference to section 4(3) of CCA 2013 is essentially one that EWM as employer must pay the whole of the notified sum in the absence of its timeous contest of the same, as follows: “4(3) If the other party or specified person referred to in subsection (1) contests that the amount is due and payable, then the other party or specified person— (a) shall deliver a response to the payment claim notice to the executing party, not later than 21 days after the payment claim date…”.

In this regard, the CCA 2013 operates in stark contrast to the statutory construction adjudication regime in the UK. In the UK construction adjudication is governed by the amended Housing Grants, Construction and Regeneration Act 1996, section 111 of which explicitly imposes an obligation on an employer to pay a notified sum unless the employer issues its ‘pay less notice’ before the final date for payment. Failure to make payment in the absence of a payless notice gives rise to a clear, statutory right to refer the payment dispute to adjudication. This however has no bearing on the CCA 2013 or the intentions of the Irish legislature.

Tenderbids’ interpretation of the statute was not accepted by Mr Justice Simons for reason that it imposes an intention for the CCA 2013 which cannot be ascertained from the wording of the statute itself. This finding is expanded upon in recognition of the “…worthy sentiment that there should be some consequence for the failure to comply with the statutory imperative to respond to a contested payment claim is not a legitimate guide to statutory interpretation in circumstances where it is not possible to ascertain what the Oireachtas intended that consequence should be. It is unclear whether the supposed consequence, i.e. a preclusion on contesting the underlying merits of the amount specified in the payment claim notice, extends to court and arbitral proceedings, or whether, alternatively, it is confined to an adjudication.”

Mr Justice Simons postulates as to the gamut of potential consequences as the legislature might have been intended for the CCA 2013, including “[a]t one end of the spectrum, the consequence might simply be to allow the payee to invoke the adjudication process immediately once the prescribed twenty-one day period has passed  without a response. Put otherwise, the failure to respond would be regarded as crystallising a dispute. At the other end, the consequence might be that a paying party who fails to respond to a payment claim notice should be precluded from ever contesting the underlying merits in any forum, i.e. the consequence would extend beyond adjudication and would also infect arbitral or court proceedings.” 

To this end the Court finds that “[t]he flaw in the contractor’s argument is that there is nothing within the Act which makes it possible to ascertain which of the potential forms of consequence the Oireachtas has chosen. In the absence of any such guidance, it would represent judicial law-making for the court to choose one over the others.” Citing the Supreme Court’s judgment in Heather Hill Management Company v. An Bord Pleanála [2022] IESC 43, the Court in Tenderbids 2 identifies that it is “impermissible to impose upon legislation an outcome simply because it appears reasonable or sensible to an individual judge or aligns with his or her instinct as to what the legislators would have said had they considered the problem at hand.”

 
Furthermore, the Court and the parties could not look to the parliamentary history, the explanatory memorandum and debates that culminated in the enactment of the CCA 2013 for reason that matters of statutory interpretation are restricted to the text of the CCA 2013 itself.

The foregoing breadth of prospective consequences as might have been intended by the CCA 2013, go beyond imposing an obligation to make payment, they potentially do so while denying the contractor of the right to defend the payment dispute on the merits.

Having contemplated the Reliefs Argument the Court found that the Adjudicator erred in law though having determined that EWM’s failure to deliver a response to Tenderbids’ PCN gave rise to Tenderbids’ entitlement to the payment of the full of the amount specified in the PCN. The Adjudicator’s finding did not represent a proper interpretation of the CCA 2013, which does not provide for a ‘default direction’ to pay. Furthermore, it is impossible for the Court to ascertain from the text of the CCA 2013 what outcome the Oireachtas had intended as a consequence of a failure to issue a response in the prescribed period and to impose one of several potential outcomes would represent judicial law-marking.

The judgment reflects that, absent procedural unfairness, the High Court at enforcement stage would ordinarily enforce an adjudicator’s decision irrespective of an underlying error of law, (being a feature of the expeditious “pay now, argue later” regime that permits enforcement including in the event that an adjudicator answers “…the right question in the wrong way… ”).

In the context of the ‘default decision' principle however, the Court recognised the procedural unfairness that would be visited on a hypothetical 
employer, who had failed to respond to a payment claim notice and was subsequently precluded from defending a claim in adjudication on its merits. Where this procedural unfairness arises the Court will elect to exercise its discretion to refuse to enforce an adjudicator’s decision

On the facts of Tenderbids 2 however, EWM had conceded to the otherwise procedurally unfair ‘default decision’ principle at adjudication stage and the Court elected to invoke its discretion not to enforce the Adjudicator’s decision - not for reason of any procedural fairness caused to EWM specifically, but to “ensure the integrity of the statutory scheme” of adjudication.

The Decision & Implications for the Construction Sector

The key findings arising from, or reinforced by the Tenderbids 2 judgment include:

1. The failure to respond within 21 days to a payment claim notice issued pursuant to section 4 of the CCA 2013 constitutes a ‘payment dispute’ under a ‘construction contract’, irrespective of the underlying merits of that claim;
2. The failure to issue a timeous response to a payment claim notice correspondingly gives rise to a right to refer a payment dispute in accordance with section 6(1) of the CAA 2013, notwithstanding that the adjudication of that payment dispute is required to take into consideration the merits of the referring party’s claim and entitlement to payment or otherwise – but not to make a ‘default decision’ for the whole of the notified sum other than on its merits;
3. The High Court will ordinarily enforce an adjudicator’s decision even where the adjudicator had erred in law, subject to the Court’s discretion not to enforce the decision on the grounds of procedural unfairness;
4. A party who adopts a “high-risk strategy” by not participating in an adjudication or through failing to raise arguments on which it might later rely in enforcement proceedings, can generally expect that it will be denied an opportunity to have those arguments heard by the Court; and
5. Concessions made by a party before an adjudicator are, as a general rule, binding on that party in enforcement proceedings.

The Tenderbids 2 judgment is a landmark ruling for the Irish construction sector. 

The High Court’s decision effectively abolishes the notion of a ‘default payment’ or ‘smash and grab’ adjudication where a party providing works or services under a construction contract has not received a timely response to its payment claim notice.

This decision represents a sharp departure from how statutory construction adjudication has operated in Ireland since 2016 following the commencement of the CCA 2013. Prior to the Court’s judgment in Tenderbids, 2 many in the construction industry viewed the High Court’s prior enforcement of adjudicators’ decisions in cases such as Aakon Construction Services Ltd v. Pure Fitout Associated Ltd [2021] IEHC 562 (noting that Aakon was not argued on the same bases as Tenderbids 2), as signifying the High Court’s tacit approval of the ‘default decision’ principle, or at least a recognition that adjudicators enjoyed the jurisdictional latitude to interpret section 4(3) of the CCA 2013 as they saw fit, including the discretion to award a ‘default decision’. 
In many instances to date, adjudicators adopted a ‘purposive’ view that the CCA 2013 intended to impose a negative consequence on a paying party for its failure to issue a response to contest the substance of the payment claim notice within the prescribed 21-day period. This was particularly so where section 4(3)(b) of CCA 2013 requires the paying party to pay any sums notified by the payment claim notice that are not in dispute and where the avowed aim of the legislation was to regulate timely payments in the construction sector.

The judgment in Tenderbids 2 arguably renders section 4(3) of the CCA 2013 redundant, which was plainly not the intention of the Oireachtas. Further, the judgment turns the page to a new chapter of defining procedural fairness in adjudication.

Byrne Wallace Shields LLP's Infrastructure, Construction and Energy Group acted for Tenderbids in its second enforcement application.

Authors: Andrew McVea, Jeff Waldron and Gráinne Fitzgerald