In a decision of significant consequence for the Irish construction industry, the High Court has confirmed that a failure to submit a timely response to a valid payment claim notice does not automatically entitle the payee to an adjudicator's determination awarding the amount claimed – putting an end to any perceived statutory right to so-called "smash and grab" adjudications. The recent case of Tenderbids Ltd t/a Bastion v Electrical Waste Management Ltd [2026] IEHC 5 confirms that payment of the claimed amount is not an automatic remedy prescribed by the Construction Contracts Act 2013 (the Act), and refused the contractor's application to enforce an adjudicator's decision made on the basis of this alleged default position.
The facts
Tenderbids involved a RIAI Blue Form contract relating to the construction of a metal recycling facility in Rathcoole, Dublin (the Contract). On 17 May 2024, Bastion (the Contractor) issued a payment claim for an amount of €1,402,457.13. Electrical Waste Management Ltd, as employer under the Contract (the Employer), failed to deliver a response to this payment claim within the timeframe prescribed by the Act. On 18 March 2025 (following an initial adjudication and subsequent enforcement application that was rejected by the Court on procedural grounds, which we discussed in further details here, the Contractor submitted a notice of intention to refer this 'payment dispute' to adjudication, on the basis that failure to provide a response to the payment claim entitled it to payment of the full amount claimed.
The adjudicator found in favour of the Contractor, employing what Simons J described as a form of "default decision making whereby the non-response to the payment claim notice was treated as determinative of the payment dispute and resulted in a default direction to pay." This principle is colloquially referred to as a "smash and grab" entitlement. Critically, the Court rejected this approach taken by the adjudicator, instead finding that despite the 'pay now, argue later' principle underpinning the Act's function, it was not possible to read in such a default direction to pay. In coming to its decision, the Court had to consider three key issues:
1) Was it a payment dispute?
The primary gateway to invoking the statutory adjudication regime under the Act is that the dispute in question must be a "dispute relating to payment arising under the construction contract" (see our article on the recent Connaughton "Drawing the line: Common Law damages are not "payment disputes" under the Construction Contracts Act" decision for a more detailed analysis of this test).
Here, the Employer presented two arguments. First, it contended any alleged right to a default decision for failure to respond to a payment claim arose under the Act and not the contract, meaning this was not a dispute "arising under the construction contract". The Court rapidly dismissed this argument, noting that the Act's intention is to supplement rights enjoyed under the contract, and any additional rights conferred should be characterised as contractual rights. Accordingly, such rights are intended to be enforceable by way of adjudication.
Secondly, the Employer argued that because (in its view) there is no right to a default decision in adjudication, any referral to adjudication which seeks this relief cannot be valid. The Court however was similarly dismissive of this claim, noting that to answer the question of whether the right to default payment exists requires determination of the merits of the claim. It therefore could not serve as the test for whether the dispute is amenable to adjudication in the first place.
2) Could new arguments, not raised at adjudication, be considered at enforcement stage?
A central issue in this case was that the Employer's primary contention before the Court– that no right to default payment exists – was not raised in adjudication. In fact, it actively conceded before the adjudicator that the Contractor's argument of a right to default payment was correct. It now sought to argue this point in defence to the enforcement proceedings.
The Court was highly critical, noting that failure to raise a point before an adjudicator would generally be fatal to any attempt to rely on that point in subsequent enforcement proceedings. It noted two key reasons for this - it undermines the purpose of the legislation to provide an expeditious dispute resolution mechanism and defeats the "pay now, argue later" principle of the Act, and secondly it is difficult to argue a breach of fair procedure or error of law occurred in adjudication proceedings, where the issue was not actually raised in such proceedings.
Nevertheless, the Court exercised its discretion to hear the Employer's newly raised argument in the "exceptional circumstances of the present case". It considered that the question of whether a default direction to pay arises under the Act goes to the "very core" of the statutory scheme of adjudication. Having regard to the fundamental significance of the legal point raised, it would "serve the greater good to permit this to happen", and any procedural unfairness in doing so could be set off by an appropriate costs award.
3) Does the Act imply a default direction to pay?
The fundamental question before the Court was whether the sanction for failure to respond to a valid payment claim is that the paying party forfeits any entitlement in adjudication to defend the claim for payment on its merits. Importantly, the part of the Act detailing the obligation to respond to a payment claim, section 4(3), is silent as to what happens in the event of a complete failure to do so. This means that any consequence for such failure can only be determined by an attempt to imply the Act's intended consequence.
The Court noted that the arguments in favour were attractive – a party who "contests" a payment claim is, under statute, required to provide a response within 21 days. A party who elects not to contest the payment claim is by implication in agreement with the claim. Payment as a default consequence means that the requirement to provide a response "cannot be ignored with impunity".
Simons J held, however, that the issue with this approach is that it "necessitates attributing to the Oireachtas an intention which cannot be ascertained by the Act itself". He considered that, even taking into account the primary purposes advanced by the Act (to regulate the timing of interim and final payments under the construction contract, and to put in place an expeditious dispute resolution mechanism) there was nothing to suggest that default payment was the only proper implication that could be drawn from the Act. Instead, there was a range possible consequences aligning with Act's intent, from automatically invoking the dispute resolution mechanisms of the Act at one end, to being precluded from ever defending the dispute in any forum at the other.
The Court concluded that where multiple, materially different possible consequences could be plausibly implied, it would represent "judicial law-making" for the Court (or an adjudicator) to make the policy choice. Accordingly, it found that the adjudicator had erred in law by making such a determination and refused the Contractor's application to enforce the decision.
Our views
This is a significant judgment, as it provides a definitive conclusion on the hotly contested legitimacy of "smash and grab" adjudications. It also highlights underlying issues with a lack of clarity in the Act, and the resulting reluctance of the Court to imply an intention into legislation where one is not clearly identifiable. It is still open to the parties to impose a default entitlement within the terms of the contract itself, if they so choose.
We expect that following a restriction of the meaning of "payment dispute" imposed by the Connaughton decision in 2025, and the two separate Tenderbids decisions in 2025 and 2026, more focus will turn to the payment terms within the construction contract.
Noting the extensive caveats placed by Simons J in his decision to refuse to enforce the award based on error of law (and his re-iteration that there were exceptional circumstances in this case) we do not expect this decision to lead to an increase in error of law-based challenges.
If you would like to discuss the impact of this decision and what it might mean for your business, please contact Fiona Egan or your usual Beauchamps contact.
Thanks to Andrew Smylie for his contribution to this article.
