Construction Lawyer & Building Solicitors Sydney | Contracts Specialist Law Firm

What is Adjudication Process?

Adjudication is a procedure for resolving disputes without resorting to lengthy and expensive court procedure.

 Aside from enforcing the rights of builders and contractors under the Act, one of the benefits of the Security of Payment Act is that it provides builders and contractors a quick and inexpensive process of obtaining their rightful payment. An adjudication is, firstly, not a court process. Rather, it is a quicker method in resolving disputes than a lengthy and costly court process where an adjudicator is appointed to settle the dispute.

Upon the Security of Payment Act’s legislation, its primary objective is to make sure that contractors and subcontractors get paid. If payment disputes or problems arise such as late payment, short payment or non-payment, the contractor’s right to file for adjudication is enforced.

Contractors may file for adjudication if:​

               1.      The amount given by the client is less than what it is being claimed by the contractor.

               2.      The client did not pay any of the disputed amount.

               3.      The client failed to provide a payment schedule.

If an adjudication process isn’t a court process,
then how are payment disputes settled?​

By written submissions. However, there are turn of events that can eventually lead to a court trial.

Order of escalating disputes:

Contractor and owner negotiation leading to adjudication under the Security of Payment in Sydney | Contracts Specialist
Application for adjudication under the Security of Payment in Sydney | Contracts Specialist
Courthouse for adjudication appeals as per the Security of Payment Act in Sydney | Contracts Specialist

Negotiations between the two parties​

Adjudication​

Court

Strict timeframes

               ·       Under NSW’s Building and Construction Industry Security of Payment Act 1999, non-conformity with the law may be deemed invalid.

               ·       A certain right of another party may no longer be available if the party conformed past their given time.

Adjudication Process

Below is the procedure of the adjudication under the Building and Construction Industry Security of Payment Act 1999 of NSW

               1.      The claimant (contractor) presents or serves a payment claim to the client or respondent.

               2.      The respondent must issue a payment schedule within 10 business days.

If Payment Schedule is not served:

                1.      The respondent did not provide a payment schedule within the given number of days (10 business days).

                2.      The claimant may file for adjudication and is allowed to suspend work for two business days’ notice.

                3.      The claimant shall serve and prepare Adjudication Notice within 20 business days since due date of the payment.

                4.      The respondent shall serve the payment schedule within five days since the receipt of the Adjudication Notice.

           5.      If the respondent did not issue a payment schedule within five business days, the claimant has 10 business days (after the expiry of the five-day deadline) to apply for adjudication.

                6.      The adjudicator shall come up with a decision within 10 business days since the receipt of the application.

If payment schedule is served, but the full amount or part of the payment was not paid:

                3.      Claimant accepts the payment.

                4.      Respondent did not pay the full amount or any part of the scheduled amount.

                5.      Claimant has 20 business days from the due date of the payment to apply for adjudication or may suspend                   work for two business days’ notice.

                6.      Respondent must serve the Adjudication Response within 5 business days since the receipt of the              Adjudication Application or within 2 business days after receiving the notice of the Adjudicator’s acceptance of the application.

                7.      The adjudicator shall come up with a decision within 10 business days since the receipt of the application.                    

If payment schedule is served, but the claimant disputes the
Payment Schedule:​

                3.      The claimant may apply for adjudication within 10 business days since the receipt of the payment schedule.

                4.      However, if an Adjudication Notice was served, the claimant shall apply for adjudication within 10 business             days after the expiry of the five-day deadline.

                5.      Respondent must serve the Adjudication Response within 5 business days since the receipt of the Adjudication Application or within 2 business days  after receiving the notice of the Adjudicator’s acceptance of the application.

                6.      The adjudicator shall come up with a decision within 10 business days since the receipt of the application.