TAS: Claimant Chooses Adjudication
Adjudication is quick and cost effective dispute resolution for industry participants to recover all progress payments that are due, including final payments and retention monies.
The Act permits claimants access to compulsory rapid adjudication whether the construction contract is written or oral and even when the contract has no provision for progress payments and/or the contract is for a single supply at a fixed price.
The process is not only rapid (the adjudicator must make the decision within 10 business days unless the parties agree to extend the time) but if the respondent's reasons for not paying are spurious, the respondent is generally liable for all adjudication fees. The process is usually entirely in writing and is so simple that most claimants do not require a lawyer. After adjudication, the claimant takes the adjudication certificate to the appropriate court and registers it as a judgment debt.
Unlike litigation or arbitration, compulsory rapid adjudication cannot result in the claimant being liable to the respondent. The respondent cannot initiate adjudication or obtain a determination that the claimant must pay the respondent money. The maximum liability of the unsuccessful claimant is the amount of the adjudication fees. Even then, the fees are shared by the parties unless the adjudicator determines otherwise.
The Act broadly defines those persons who may make progress claims under the Act, including: contractors against clients (eg. principals, developers, owner-builders); subcontractors against contractors; suppliers of building components against purchasers; architects, engineers, and others (eg. consultants) providing advice against clients, plant and equipment hirers against clients.
Prompt payment on account is vital to the stability and efficiency of the construction industry. Too often the party (the respondent) liable to pay for construction work or related goods or services, manufactures a dispute to deny, or try to delay, payment. In other situations, respondents try to string out the time for payment with promises of future work if only the claimant just waited a bit longer.
The Act ensures that the party providing work, goods or services can force the respondent to make payment on account.
The Act bars "pay when paid" and/or "paid if paid" clauses and overturns them even if they are included in the contract. It also provides a minimum rate of interest on late progress payments.
The Act includes other protections to claimants such as a right to suspend work and be paid for any losses and expenses if sacked because of the suspension. Respondents cannot claim or sue for liquidated damages because of a suspension of work under the Act.
Please move to the next step on the flowchart" being "Claimant has 20 business days from Due Date for payment to prepare and serve 2nd opportunity Adjudication [s21(4)] Notice on Respondent re no Payment Schedule".