When a payment dispute arises in the construction industry, things can quickly spiral into delays, frustration, and financial pressure. For builders, subcontractors, and suppliers in New South Wales (NSW), adjudication offers a faster, more practical path to resolution—one that doesn’t rely on drawn-out court processes or expensive legal manoeuvring.
But what exactly does adjudication involve? And what are the financial considerations you should be aware of before proceeding?
What Is Adjudication and How Does It Work in NSW?
Adjudication is a dispute resolution process provided under the Building and Construction Industry Security of Payment Act 1999 (NSW). It allows claimants—typically subcontractors, suppliers, or builders—to resolve issues around unpaid progress claims on construction work or services.
The process moves quickly and follows a strict timeline:
- A payment claim is served on the respondent.
- The respondent issues a payment schedule (or fails to do so).
- The claimant lodges an adjudication application.
- An adjudicator is appointed by an Authorised Nominating Authority (ANA).
- The adjudicator reviews the documentation and makes a binding determination.
This process is designed to maintain cash flow and business continuity, a cornerstone of the construction industry in NSW.
What Key Factors Influence Adjudication Costs?
While adjudication is generally considered more affordable than litigation, there are still various components that may influence the cost of the process.
Here’s what typically affects it:
- Claim Value – The higher the disputed amount, the more time and expertise may be required.
- Complexity of the Matter – Detailed or multi-layered claims can involve more document review and analysis.
- Volume of Supporting Evidence – A substantial number of attachments and submissions often leads to extended review times.
- Length of the Adjudication – The more time an adjudicator needs to reach a decision, the more resources are involved.
- Administrative Handling Fees – Fees set by the ANA for processing and coordinating appointments.
While adjudication costs are influenced by these variables, they are generally more predictable than costs associated with a legal trial.
Who Is Responsible for Paying the Adjudication Fees?
The costs of adjudication are usually shared equally between the claimant and the respondent. However, the adjudicator has the discretion to allocate these costs differently depending on the outcome of the case and the conduct of each party.
For example, if one party has behaved unreasonably or failed to comply with the Act’s timeframes, the adjudicator may assign a greater share of the fees to that party.
It’s important to note that each party is also responsible for their own costs related to preparing and submitting their application or response—such as consultant advice, document collation, and any optional legal assistance.
What Are the Benefits of Using Adjudication?
Adjudication was designed with the construction industry in mind, providing fast, enforceable decisions on payment claims. Its benefits include:
- Efficiency – Most disputes are resolved within 10 to 28 days.
- Cash Flow Protection – Helps claimants secure payment without prolonged delays.
- Legally Binding – Decisions can be enforced through the courts if necessary.
- Reduced Formality – A less intimidating alternative to court.
- Flexibility – No mandatory need for legal representation.
- Preserves Relationships – Speeds up resolutions, reducing the risk of ongoing conflict.
These advantages make adjudication particularly well-suited to the fast-paced, high-stakes environment of the construction sector.
What’s the Difference Between Adjudication and Court Proceedings?
To highlight the strengths of adjudication, let’s compare it with court proceedings in a clear table:
Comparison Table: Adjudication vs Court
| Aspect | Adjudication | Court Proceedings |
|---|---|---|
| Timeframe | 10–28 days | Several months to years |
| Cost | Moderate | Often very high |
| Process | Informal | Highly formal |
| Legal Representation | Optional | Often required |
| Enforceability | Yes | Yes |
| Impact on Workflow | Minimal disruption | Often disruptive |
| Suitable For | Fast resolution of payment disputes | Complex legal matters |
As shown above, adjudication offers a streamlined and accessible alternative to formal court action, especially for small to medium-sized claims.
What Elements Typically Make Up the Cost of Adjudication?
Although no specific dollar amounts are included here, it’s helpful to understand the types of costs involved. These are the typical components:
Breakdown of Adjudication Cost Factors
- Adjudicator’s Time: Charged hourly or as a fixed service based on claim complexity.
- Administrative Fees: Set by the ANA, covering the process of appointment and correspondence.
- Document Handling: Time taken to assess submissions, documents, and evidence.
- Determination Writing: Finalising the legally binding written outcome.
- Legal or Advisory Fees (Optional): If you choose to engage a professional to assist.
Parties should always request a cost schedule or estimate from the ANA and understand the terms before the adjudicator is appointed.
How Can Guardian PC Help You Navigate Adjudication?
If you’re facing a construction payment dispute, navigating the adjudication process alone can be daunting. That’s where Guardian PC comes in.
At Guardian PC, we assist clients across NSW in handling construction-related adjudications. Whether you’re preparing a claim, responding to one, or trying to understand your rights under the Security of Payment Act, our expert team offers tailored support. We break down legal jargon, guide you through documentation, and help you meet critical timeframes—giving you confidence at every step.
Our goal? To make sure you get the resolution you deserve—clearly, efficiently, and cost-effectively.
FAQs
1. Is adjudication suitable for all construction payment disputes?
Adjudication applies to most construction-related payment claims in NSW, but certain residential owner-occupier situations may be excluded. Always check your eligibility under the Security of Payment Act.
2. Do I need a lawyer for adjudication?
Legal representation is optional. Many parties handle the process themselves or use consultants, although advice can be useful for complex claims.
3. What happens if the adjudicated amount isn’t paid?
If the respondent doesn’t pay, you can apply for an adjudication certificate and have it enforced in court as a debt.
4. Can adjudication be used more than once in the same project?
Yes, multiple claims can be lodged at different stages of a project. Each progress payment dispute can be adjudicated individually.
5. How long does it take to get a decision?
Most decisions are handed down within 10 business days of the adjudicator receiving all relevant documents.
6. Can adjudication decisions be appealed?
While binding, adjudication decisions can be challenged in court—but only on limited legal or procedural grounds.
References
- NSW Fair Trading – Security of Payment
- Adjudicate Today – NSW Adjudication
- Resolution Institute – Adjudication in NSW