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Adjudication is one of many dispute resolution mechanisms available for use by those involved within the construction sector around the Oceania region.
The construction industry in Australia often resembles a hierarchical chain of contracts. When one party fails to fulfill payment, such an act often threatens to destabilise the payment process throughout the entire chain.
In many cases, the adjudication method, enshrined within security of payment legislation, is a useful method that allows for the quick ruling on disputed payment claims, allowing cash to flow down through the hierarchy of construction contracts.
The role of the adjudicator is to decide the rights of parties under a construction contract. Aggrieved parties may prepare their case to bring to an adjudicator without having the respondent necessarily agreeing to the dispute process. The adjudicator is empowered to make judgment on any particular case with regards to the evidence at hand, and can call on submissions from both parties in order to satisfy points of contention. In such situation, the adjudicator can be likened to as an independent ‘referee’ who determines the validity of payment claims and other related disputes with specific regards to the relevant contracts.
Within the Australian construction industry, such adjudication processes have been widely used in Queensland, New South Wales, Victoria, Western Australia, Tasmania, Australian Capital Territory and the Northern Territory.
New South Wales was the first state to implement security of payment legislation, introducing the Building and Construction Industry Security of Payments Act in 1999. Adjudication was introduced into Queensland in October 2004, as the Building and Construction Industry Payment Act, and has seen a sharp increase in use as a valid dispute resolution mechanism.
Benefits of Adjudication
Adjudication has many benefits that parties to a construction dispute can take advantage of.
Speed
Adjudication operates under a strict timetable that ensures decisions are made quickly – typically within 15 business days of the application being received by the RICS DRS.
Timeliness
Adjudication allows building disputes to be resolved as and when they arise. By resolving disputes in a quick and efficient manner, this reduces tension between the parties, tension which ordinarily might lead towards additional time and costs wasted resolving disputes through litigation.
Clear Conclusions
An adjudicator’s decision is binding on the parties to the dispute and compliance must be adhered to either immediately or on another date as set by the adjudicator.
The RICS DRS as an nominating body
The RICS DRS is currently an Authorised Nominating Authority (ANA) in Queensland, New South Wales and the Australian Capital Territory as well as an Prescribed Appointor (PA) in Western Australia. This means we can nominate adjudicators to handle your construction disputes in these respective jurisdictions.
The Oceania branch of the RICS DRS is currently pursuing registration as a nominating body in the Northern Territory and other jurisdictions within the Oceania region.
Our Adjudicators
The RICS DRS prides itself on providing adjudication decisions that are not only professionally written and sensible, but cost effective and pragmatic. For that reason, our adjudicators all must be recognised as professionally competent requiring at least ten years practical experience within the construction industry or a related field. Furthermore, in most cases, they are required to be certified by the regulatory bodies which oversee security of payment regimes within the various state and regional jurisdictions.
The RICS DRS provide several levels of adjudicators skill which reflect both their experience within the construction industry, their level of expertise as well as their specific experience as adjudicators and dispute resolvers.
The RICS DRS draws their adjudicators from a diverse range of professions including:
- Chartered Quantity Surveyors
- Chartered Building Surveyors
- Civil engineers
- Construction lawyers, solicitors and barristers
- Project managers
- Mediators and arbitrators
Furthermore, the majority of RICS DRS adjudicators are members of professional organisations such as the RICS.
How are adjudicators appointed?
Our adjudicators are appointed with specific regards to the methods set out in the relevant security of payment legislation. For example, under the Queensland jurisdiction, the RICS DRS refer an adjudication application to the adjudicator who then accepts the appointment and notifies the relevant parties to the dispute through the nominating authority.
Generally, and where possible, the RICS DRS do attempt to match the nature of the dispute or issues at hand to the qualifications of members of our panel, so as to get a decision that is of a high standard. We find that this also assists in saving time and money for both parties.
For further information on how adjudicators are appointed, we direct you to have a look at the individual jurisdictions covered by the DRS as a nominating body.
How much does adjudication cost?
Depending on thejurisdiction, the costs of adjudication can vary. For example, in Queensland, the RICS DRS employ three different fee structures – pro-bono, fixed fee adjudication, and non-fixed fee adjudication (hourly rates). Generally, in this jurisdiction there is no ‘application fee’ per se. Adjudication certificate fees are included with the pro-bono and fixed adjudication schemes, whereas for non fixed-fee adjudication, there is a standard low cost fee. Relative to the cost of court litigation, adjudication is a cost effective method of resolving disputes within the construction industry.
The adjudicator also has the power to decide which party is to be responsible for payment of their fees, along with the nominating authority fees. It may be decided that both parties pay the fees in equal shares, or if there is an outright winner in a particular, the adjudicator may decide that the losing party must pay the fees.
Each party will normally bear their own costs of making submissions or acquiring professional help.
For more information, please have a read of our fee structures for adjudication.
Further Information
This website provides some valuable information with regards to adjudication. We provide information regarding specific security of payment jurisdictions, a knowledge base for the security of payment legislation in Queensland and New South Wales.
We also provide as some useful forms, tools and work-flows to assist with understanding the adjudication process as well as information our value-for-money fee structure.
Furthermore, if you require even more assistance, the RICS DRS offers a range of training courses relevant to security of payment, as well publishing several relevant publications.
Alternatively, you can contact us directly.
