Earlier today, the High Court published an ex-tempore judgment in Finnegan Construction Limited v Killycard Developments Limited [2024] IEHC 752, which was given by Simons J on 17 December 2024. The High Court enforced an adjudicator’s decision. However, an issue arose as to the treatment of interest.

Previously, Aakon Construction Services Limited v Pure Fitout Associated Limited [2021] IEHC 619, considered whether, in the absence of the adjudicator having made any provision for the payment of interest, the successful party could rely on s.22 of the Courts Act 1981 to claim interest. The court held that it is a matter for the adjudicator to decide whether interest is payable on the amount claimed. The decision to award interest is part of the adjudicator’s overall resolution of the payment dispute. The court does not have jurisdiction, when dealing with enforcement, to consider whether interest should have formed part of the adjudicator’s decision. To do so would trespass on the substance of the dispute. Therefore, interest under the Courts Act 1981 does not apply to the enforcement of an adjudicator’s decision under the Construction Contracts Act 2013.

However, in Finnegan Construction Limited, the facts were slightly different. The adjudicator had awarded interest express at a fixed sum per day until payment of the claimed amount was made. In those circumstances the court enforced the decision including the adjudicator’s findings on interest. The court gave two reasons for doing so stating that:

6 The first reason is that this best reflects the underlying rationale and objective of the Construction Contracts Act 2013, which is to give full effect to the adjudication process and to treat an adjudication award as if it were enforceable pro tem as a judgment or order of the High Court. It seems to me that the court should respect the finding made by the adjudicator in relation to the rate of interest.

7 The second reason follows by analogy with contract law in general.  In the case of a commercial dispute, or even a dispute in relation to the debt payable under a residential mortgage, the ordinary approach would be that, having identified the principal sum, the court order would then recite that interest would continue to accrue at the contractual rate.  It seems to me that, in this context, the adjudicator’s award of interest is analogous to the rate of interest fixed under a contract.  In circumstances where there is no suggestion that the adjudicator did not have jurisdiction to impose the interest rate, nor that the rate is penal or otherwise disproportionate, it seems to me that the rate should continue post-judgment.

We often see adjudicators include interest as part of their decisions expressed as a daily amount until payment is made. However, it is advisable for a Referring Party to claim interest in the Notice of Adjudication so that it forms part of the overall dispute. Often, the interest amount can be considerable. Regularly, in adjudication and indeed in conciliation, we see parties do not include interest as part of their claims.