1. Construction Contracts Act, Adjudication & Payment Claims Conference 2016 The Right to Suspend Work Explained Lydia B. Bunni BL Wednesday 28 th September 2016 Royal Marine Hotel, Dun Laoghaire, Co. Dublin © Lydia B. Bunni B.L.

2. The Right to Suspend Section 5 of the Construction Contracts Act 2013 The Right of Suspension for Non-Payment Section 7 of the Construction Contracts Act 2013 The Right of Suspension for Non-Compliance with the Adjudicator’s Decision © Lydia B. Bunni B.L.

3. What Can I do if I don’t get Paid? In accordance with Section 5 of the Construction Contracts Act 2013, if a party has not been paid by the date the requested payment falls due, that party now has a right to suspend work. © Lydia B. Bunni B.L.

4. When can I suspend? Section 5 of the Construction Contracts Act 2013 Any amount due under a construction contract; Not paid in full by the day on which it is due; Party MAY suspend work. © Lydia B. Bunni B.L.

5. What has to be done before I suspend? Must give notice in writing. Specify the grounds why it is intended to suspend work; Must be delivered to the other party Not earlier than the day after the day on which the amount is due At least 7 days before the proposed suspension is to begin © Lydia B. Bunni B.L.

6. When can I not suspend the Works? Work cannot be suspended: If other party has paid the amount due; OR After notice has been served by a party referring a dispute relating to payment of the amount concerned to Adjudication © Lydia B. Bunni B.L.

7. What Can I do if I receive a notice of intention to suspend the works? How can I prevent it? The right to suspend for non-payment ceases where: The amount due is paid in full prior to the start of any proposed suspension; or The payment dispute has been referred by either Party to adjudication. Partial payment will not suffice to render suspension unjustified © Lydia B. Bunni B.L.

8. What is the effect of Suspension on the Time for Completion? In accordance with Section 5(4) of the Act, where: Work is suspended; and The ability of the suspending party to complete the work within a contractual time limit is affected by the suspension, The period of suspension ‘shall be disregarded for the purpose of computing the contractual time limit unless the suspension of the work is unjustified in the circumstances’. © Lydia B. Bunni B.L.

9. What is the effect of Suspension on the Time for Completion? (Contd/2) In accordance with Section 5(5) of the Act, where: Work is suspended; and The ability of a subcontractor to complete the work within a contractual time limit is affected by the suspension, The period of suspension ‘shall be disregarded for the purpose of computing the contractual time limit’. © Lydia B. Bunni B.L.

10. What is the effect of Suspension on the Time for Completion? (Contd/3) In accordance with Section 5(6) of the Act: ‘ A period of suspension of work … shall also be disregarded for the purpose of computing the time taken to complete the work under another construction contract where – a)The construction contract the work under which is suspended is a subcontract b)The other construction contract is also a subcontract and the other party to that other subcontract is the same as the other party to the subcontract the work under which is suspended, and c) The ability of the executing party under that other subcontract to complete work within a contractual time limit is affected by the suspension of work. ’ © Lydia B. Bunni B.L.

11. What other remedies do I have for non- payment? Right to refer a payment dispute to adjudication in accordance with Section 6 of the Act NB: A suspension by a contractor cannot continue once the dispute relating to payment in respect of which the suspension relates has already been referred to adjudication. Dilutes the effect of a threatened suspension of the works and the contractor will be obligated to continue with the works whilst the adjudication process is on- going © Lydia B. Bunni B.L.

12. The Right to Suspend Section 5 of the Construction Contracts Act 2013 The Right of Suspension for Non-Payment Section 7 of the Construction Contracts Act 2013 The Right of Suspension for Non-Compliance with the Adjudicator’s Decision © Lydia B. Bunni B.L.

13. What Can I do if I don’t get Paid? In accordance with Section 7 of the Construction Contracts Act 2013, if an amount is due to a contractor pursuant to a decision of an adjudicator within 7 days of the date of the said decision, that contractor now has a right to suspend work. © Lydia B. Bunni B.L.

14. When can I suspend? Section 7 of the Construction Contracts Act 2013 Any amount due pursuant to the decision of an Adjudicator; Not paid in full before the end of a period of 7 days from the date the decision is made; Party MAY suspend work. © Lydia B. Bunni B.L.

15. What has to be done before I suspend? Must give notice in writing. Specify the grounds why it is intended to suspend work; Must be delivered to the other party Not later than 7 days before the proposed suspension is to begin © Lydia B. Bunni B.L.

16. When can I not suspend the Works? Work cannot be suspended: If other party has paid the amount due; OR After the decision of the Adjudicator is referred to arbitration or proceedings are otherwise initiated in respect of the said decision © Lydia B. Bunni B.L.

17. What Can I do if I receive a notice of intention to suspend the works? How can I prevent it? The right to suspend for failure to comply with an Adjudicator’s decision ceases where: The amount due is paid in full prior to the start of any proposed suspension; or The decision of the adjudicator is referred to arbitration or proceedings are otherwise initiated in respect of that decision. Partial payment will not suffice to render suspension unjustified © Lydia B. Bunni B.L.

18. What is the effect of Suspension on the Time for Completion? In accordance with Section 7(4) of the Act, where: Work is suspended; and The ability of the suspending party or a subcontractor to complete the work within a contractual time limit is affected by the suspension, The period of suspension ‘shall be disregarded for the purpose of computing the contractual time limit’. © Lydia B. Bunni B.L.

19. What is the effect of Suspension on the Time for Completion? (Contd/3) In accordance with Section 7(5) of the Act: ‘ A period of suspension of work … shall also be disregarded for the purpose of computing the time taken to complete the work under another construction contract where – a)The construction contract the work under which is suspended is a subcontract b)The other construction contract is also a subcontract and the other party to that other subcontract is the same as the other party to the subcontract the work under which is suspended, and c) The ability of the executing party under that other subcontract to complete work within a contractual time limit is affected by the suspension of work. ’ © Lydia B. Bunni B.L.

20. WARNING! A suspension cannot continue once the decision of the adjudicator is referred to arbitration or proceedings are otherwise initiated in respect of that decision Dilutes the effect of a threatened suspension of the works and the contractor will be obligated to continue with the works whilst the adjudication process is on- going © Lydia B. Bunni B.L.