There have been a number of developments in this area since our previous update in May 2013 (view update here).

James Elliott Construction Limited v Irish Asphalt Limited

As we reported in our May 2013 update, the High Court decision in James Elliott Construction Limited v Irish Asphalt Limited is under appeal to the Supreme Court.  View an article on the High Court decision here.

The Supreme Court has now heard submissions in the appeal and a decision is awaited. 

Before the Supreme Court, Irish Asphalt Limited argued that the High Court judge erred in implying a requirement of “merchantable quality” into the contract for the supply by it of infill to James Elliott Construction Limited. Irish Asphalt Limited submitted that by so doing, the Court modified the relevant harmonised standard applicable to the material, namely Standard 13242:2000 as adopted by the National Roads Authority. It was argued that this was contrary to the principle of harmonisation and was an action which required notification to the European Commission.  Irish Asphalt Limited sought a referral to the Court of Justice of the European Union to provide guidance on the application of the Construction Products Directive (No 89/106/EEC) and the underlying harmonised standard.

The Supreme Court has not yet indicated when a decision in this case is due.  However, should it elect to refer the matter to the Court of Justice of the European Union this will lead to some delay in concluding the case.

Announcement of Pyrite Fund

On 16 October 2013, the Minister for Environment, Community and Local Government, Phil Hogan, announced approval for a Pyrite Remediation Scheme worth an initial €10 million, with additional funding promised over the coming two years. The Minister has described the initiative as a scheme “of last resort”, rather than a compensation scheme. 

Up to 1,000 homes severely affected by pyrite are due to benefit from the scheme which will cover the cost of remediation and temporary accommodation. Homeowners who have already carried out repairs will not be entitled to a rebate.

This assistance to homeowners is exchequer-funded and will be implemented by the Pyrite Resolution Board.  An initial plan to levy the insurance and quarrying industries was abandoned on the basis of advice from the Attorney General.

Pyrite Resolution Act 2013

The Pyrite Resolution Act 2013 was signed into law on 25 December 2013 and came into force on 10 January 2014.

The Act provides for the establishment of the Pyrite Resolution Board (the “Board”) on a statutory basis whose functions include:

  • providing information on pyrite and pyrite damage
  • devising an appropriate Pyrite Remediation Scheme (the “Scheme”)
  • fielding applications for inclusion in the Scheme and determining appeals
  • monitoring the implementation of the Scheme, and
  • providing quarterly reports on the Scheme.

The Housing and Sustainable Communities Agency (the “Housing Agency”), a body also established by the Minister, provides services in relation to housing to the Department, local authorities and other bodies. The Pyrite Resolution Act 2013 provides that the Board may direct the Housing Agency to, amongst other things:

  • categorise dwellings in accordance with testing standards
  • carry out testing
  • verify damage attributable to pyrite heave
  • prioritise dwellings affected in accordance with available resources and remediation progress, and
  • liaise with participants with regard to remediation.

Section 19 of the Act was inserted at the Dáil Committee Stage of the legislative process by the Minister. It provides that where a builder/developer is involved in legal proceedings, the Board can defer a decision on whether to refer an application to the Housing Agency, or whether to include an applicant within the remit of the Scheme. The Act requires the Board to review any decision to defer periodically.

As noted above, the Government has already approved an initial €10 million funding to kick-start the Scheme, with additional funding to be allocated over the next two years.

In a statement on 28 January 2014, the Minister said that the Board would be in a position to receive applications within a month.