Welcome to In the Works, Matheson’s quarterly construction bulletin with news, views and legislative updates.
It is hard to believe that the first quarter of 2026 is behind us and what a busy quarter it has been. We have seen increased activity across all sectors most notably in residential and commercial offices but also in industrial and logistics. In this edition of In the Works, we look at recent case law, the implementation of RIAI 2025, construction cost inflation, the abolition of retention in the UK and catch-up on new and upcoming legislation.
In the industry: Construction costs, RIAI contracts
With oil prices and availability dominating the headlines, it’s no surprise that the impact is trickling down into construction contracts. In an industry that has run the gauntlet over recent years, price fluctuation has never truly been off the agenda.
As of the time of writing, everything from the cost of raw materials to the cost of delivery to site is under review. The longer uncertainty continues, the trickier it will become to separate true cost increases from defensive pricing and the inevitable move away from “just in time” procurement modelling will present its own challenges.
One positive aspect of meeting the uncertainties of Brexit, Covid and the Ukraine War (to name but a few) is that the market is now much more sophisticated in terms of approaching risk allocation for unforeseen events. From risk share to supply chain mitigation strategies, we have seen very collaborative engagement around this issue in recent weeks notwithstanding the uncertainty.
Speaking of construction contracts, it has been almost six months since the RIAI published the 2025 edition of the RIAI Construction Contracts. As per the RIAI, these forms were designed to “achieve better quality and sustainable outcomes reflecting the more complex layers brought about through planning, design, construction and use” and include a revised structure, clarifications and the incorporation of common amendments as ‘bespoke’ clauses. The forms also reflect legislative and other changes, for example, the incorporation of detailed provisions in relation to the Building Control and Health and Safety.
Whilst the 2025 Forms are a welcome update, there has naturally been some trepidation in the market when it comes to their use on specific projects – the 2017 Edition continues to be the mainstay. As we saw with the 2017 Edition (and with updates to the JCT and FIDIC alike), widespread adoption will take time.
In the news: Abolition of retention
Across the pond, the UK government has recently announced new measures to abolish retention under the terms of construction contracts.
The proposed ban marks a decisive intervention in long-standing payment practices across the construction sector. Retentions have served as an effective mechanism to manage both contractor performance and defects risk, but it appears that widespread abuse has resulted in disproportionate cashflow strain, particularly on those further down the supply chain.
From an Irish perspective, it will be interesting to see how the UK’s move plays out. Retentions continue to serve an important role in securing performance in this jurisdiction, and a similar ban here could give rise to a number of unintended consequences.
Although a ban would address the structural imbalance whereby retention monies are often delayed, reduced, or lost entirely in insolvency scenarios, such reform raises other legitimate concerns. For example, in the absence of retention payments, how will employers secure performance and remedy defects without increasing costs through performance bonds or guarantees? The risk is that the abolition of retentions simply shifts, rather than resolves, underlying tensions.
For Ireland, where similar challenges persist, the UK’s move offers a live test case. The key lesson may not be the ban itself, but whether the market can develop viable and proportionate alternatives that balance cashflow protection with performance security.
In the courts: Adjudication
The biggest construction law decision so far this year has been the decision of Mr. Justice Simons in Tenderbids II [1] confirming that a paying party’s failure to respond to a payment claim notice under a construction contract does not entitle the payee to an adjudicator’s decision directing payment of the full notice amount. Simons J clarified that no such entitlement to a default decision for payment exists under the Construction Contracts Act 2013 and that it would ‘represent judicial law making’ to imply such an entitlement.
This marks the end of more than a decade of uncertainty around the validity of ‘Smash and Grab’ adjudications and whether the failure of the paying party to issue a response entitles the payee to an adjudication award for the full value of its payment claim notice.
The immediate impact of Tenderbids II is that payees will now have to prove that they are entitled to the amount specified in the payment claim notice. This will be the case even where the paying party has been late in responding or unresponsive to a payment claim notice.
Elsewhere in Gael [2], Mr. Justice Simons clarified the position around extending the 28 day adjudication process under subsections 6(6) and 6(7) of the CCA, in circumstances where the responding party claimed a breach of fair procedures because the time was extended without notice or consent by them. As per the court: “…the legislation treats the referring party as dominus litis, i.e. the driving force behind the adjudication process…Time may only ever be extended if the referring party consents to a request by the adjudicator for an extension, or agrees an extension with the responding party… If and insofar as a referring party has a preferential status, this is by design of the legislation not by dint of any unfairness on the part of the adjudicator”.
In the Dáil: the construction products regulation and more
The new Construction Products Regulation [3] came into effect on 8 January 2026, replacing the 2011 CPR. Per the Department of Housing, Local Government and Heritage, the purpose of the updated Regulation is to “achieve a well-functioning single market for construction products and contribute to the objectives of the green and digital transition, particularly the modern, resource-efficient and competitive economy”. This includes providing updated standardisation to reflect the latest technical developments and now applies to a broader range of modern products, such as those that are 3D printed. Consumer protection has also been strengthened with new obligations on manufacturers, importers and other economic operators, including requirements in relation to environmental information to be provided to consumers.
Despite a transposition deadline of 29 May 2026, we have not seen any implementing legislation for the recast Energy Performance of Building Directive [4]. The EPBD which includes the zero-emission goal by 2050, minimum energy performance standards, and introduces updated standards for all new buildings is set to have a significant impact on the Irish construction and real estate sectors. The Government’s legislative programme for Summer 2026 announced on 14 April notes that the heads for Energy Performance of Buildings Bill are in preparation and have been designated for priority drafting for the summer session. Watch this space.
By way of update on the awaited Building Standards Regulatory Authority Bill – the summer legislative programme notes that the heads of the bill are currently in preparation but the bill is not in the priority list. The purpose of the Bill is to establish a Building Standards Regulatory Authority to strengthen the oversight role of the State in respect of the design and construction of buildings and the marketing and use of construction products.
Lastly, the Critical Infrastructure Bill 2026 was published last week. If you haven’t already seen our update, you will find it here.
[1] Tenderbids Limited t/a Bastion v Electrical Waste Management [2026] IEHC 5
[2] BMC Renovations v Gael Property [2026] IEHC 195
[3] The Construction Products Regulation[3] (EU) 2024/3110:
[4] Directive 2024/1275/EU