High Court Rejects ‘Smash and Grab’ Adjudications Under Construction Contracts Act 2013

In a judgement delivered 12 January 2026, in the case of Tenderbids Ltd trading As Bastion V Electrical Waste Management Ltd Mr Justice Simons dealt with the question of ‘Smash and Grab’ adjudications. He has determined, in a detailed and considered judgement, that the Construction Contracts Act 2013 does not allow for automatic obligation to pay the full amount claimed in a Payment Claim Notice where the paying party has failed to issue a response to that notice within the time prescribed in Section 4 of the Act.

"The adjudicator 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. This is not the proper interpretation of the Construction Contracts Act 2013. The Act does not provide for such a default direction to pay" (Paragraph 85)

He concluded that, if the legislature intended to deprive a respondent/defendant of the right to defend against a claim,  the language used would have to be clear and specific in respect of the consequences of failing to respond to a payment claim notice. He found that no such language is present in the Act.  

"The adoption of a default direction to pay has the practical effect that the paying party, who failed to respond to a payment claim notice, will be precluded from defending a claim in adjudication on the merits. This is so notwithstanding that this preclusion is not provided for under the Construction Contracts Act 2013. Such a default direction to pay cuts against the general, background principle of natural justice that a party who will be adversely affected by a decision which is enforceable under statute, albeit on a provisional basis only, is normally entitled to be heard on the merits" (paragraph 89)

"… it is not possible to ascertain from the Act as a whole that the Oireachtas intended that a default direction to pay should be the consequence for a failure to respond to a payment claim notice" (paragraph 86)

"Whereas it is open to the legislature to circumscribe the extent of the procedural rights afforded at first instance (where there is a right to a full hearing by way of arbitral or court proceedings thereafter), it is not open to an adjudicator to derogate from fair procedures without legislative authority. Accordingly, this court refuses, in the exercise of its discretion, to make an order enforcing the adjudicator’s decision in this case" (paragraph 89)

In this case the Court was being asked to imply such consequence, and Mr Justice Simons concluded that for the Court to do so would be an act of judicial lawmaking – and was not permissible.

"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" (paragraph 75)

Mr Justice Simons has therefore rejected the Contractor’s argument that smash and grab consequences are available under the Construction Contracts Act 2013. He considered that the issue went to the very core of the adjudication procedure and that, notwithstanding the fact that this was a new argument raised by the Respondent at enforcement stage and not during the course of the adjudication, it was important that it be dealt with on an exceptional basis for the following reason:

"If, on the proper interpretation of the Act, it does not provide for a default direction to pay, then it is imperative that this be declared now rather than have the contended-for error replicated in other adjudications" (paragraph 54)

It is clear from the judgement that Mr Justice Simons was persuaded to this decision, at least in part, by the possible consequence of permitting the interpretation urged by the Contractor. Such an interpretation might permanently deprive the Respondent of the right to argue the merits of the claim, not just temporarily for the purposes of the adjudication, and that such consequence might carry forward into arbitral or court proceedings.

"There are a number of policy choices open as to what the consequence for non-response should be. At 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. 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" (paragraph 86)

This issue has been the subject of considerable debate since the commencement of the Construction Contracts Act 2013 in July 2016. Many dispute resolvers have argued that the only logical consequence of a failure to respond within the period stipulated in the legislation, is that the entire sum claimed falls due for payment.  Others have disagreed and have argued that, had the legislature intended that consequence, the provision would have clearly set that out, as is the case in equivalent legislation in the UK. This judgement settles the debate.

To read the relevant document please follow the link here: https://www2.courts.ie/view/Judgments/f041e0d4-8399-4b42-85b6-def59ead4b42/d82bb377-25fc-46d4-8019-9937d927824e/2026_IEHC_5.pdf/pdf