QBCC ADJUDICATION (BIFA ACT)

What is Adjudication?

Adjudication is a procedure in which a dispute is referred to by one of the parties to the Queensland Building and Construction Commission (QBCC), who in turn appoints an independent adjudicator who makes a binding decision on the dispute. In choosing adjudication, the parties opt for a dispute resolution procedure instead of going to court.

In practice, the parties present their arguments and evidence to an arbitrator who acts as a judge and rules producing a binding determination and award. The adjudicator’s decision is enforceable in a court.

Adjudication typically provides a lower cost and speedier resolution than proceeding in court. The limited right to appeal adjudication determinations typically eliminates an appeal process that can delay the finality of the adjudication.

What is the adjudication process?

A payment claim is sent to the person responsible to make the payment typically 10 business days after the end of a calendar month, as a request for payment for construction works completed in the preceding month. The person responsible to make the payment (the Respondent) has 15 business days to respond to a ‘payment claim’ in a ‘payment schedule’.

If the respondent provides a payment schedule within the required timeframe, and the amount is less than the amount requested in the payment claim, the claimant has the right to apply for adjudication to the Queensland Building and Construction Commission (QBCC).

An application for adjudication must be submitted within 20 business days of receipt of the payment schedule. Once the application for adjudication is lodged with the QBCC registry, the QBCC will appoint an adjudicator within 4 business days

Adjudication Application

An adjudication application will be valid if:

(a) it is in the approved form, (b) identifies the payment claim and payment schedule to which it relates, (c) is accompanied by the fee prescribed by regulation for the application, (d) includes the submissions relevant to the adjudication application the claimant chooses to include, (e) the claimant supplied a copy to the respondent, (f) the adjudication application complies with the requirements of the SOP Act, (g) was made within the prescribed time, and (h) the application is neither frivolous nor vexatious

Why CLB?

New customer on the phone: “Thank you for your quote, we rang a few other lawyers and you were the only one that could answer all our questions from the get-go, we decided to engage you.”

‘Construction Lawyers’ who are not versed in technical matters needs to build their cases based on what others say. They write adjudication submissions based on affidavits and third party opinions concentrating in jurisdictional issues and leaving others to deal with the ‘real’ issues which led to the dispute (latent conditions, delay in approvals, incorrect materials, insufficient labour). However, adjudicators have to decide a dispute solely on the submissions in front of them; and after all the ‘noise’ in pages and pages of jurisdictional challenges and case law, it is sad for us when we act as adjudicators to see the merit in a poorly framed and/or poorly evidenced claim and having to decide against it because, when we act as QBCC appointed adjudicators, we must rule on the submissions before us and we are prevented from assisting any of the parties.

We are our client’s first choice because we understand the minute details written in technical specifications, we can read and interpret plans, we can analyse the impact of unanticipated events in P6 schedules and determine risk allocation, and we are familiar with HIA, AS2124, AS4000, FIDIC, NEC, and Bespoke contracts.

Our only area of practice is Construction Law - that says it all.

Is adjudication under the Security of Payments Act right for you?

The Security of Payment Act aims to assist contractors in getting paid for construction work. As veterans of many applications and having served as adjudicators, we can attest that achieving success in these proceedings (with an over 80% success rate) is not an easy task. We once heard a judge describe adjudication, in jest, as a “quick and dirty” process.

In states where the Building Services Commission issues regular reports, over 25% of adjudications were reportedly left unresolved due to lack of jurisdiction (the “dirty” part). Although we fail to understand why a simple resolution process, where an adjudicator (an expert in the building industry) can make a quick and fair decision to resolve a dispute, would be interfered with, jurisdictional challenges are the norm in the “construction lawyer’s” industry. These range from allegations of (typically unfounded) breaches of licensing conditions, defective service of adjudication documents, incorrectly prepared payment claims, insufficient information in payment claims to trivial matters such as incorrect identification of the business name, ABN, or ACN number. We have also observed that lawyers without on-site construction experience cannot adequately address cost and scheduling matters, especially in small claims where the cost of engaging experts cannot be justified.

The bigger issue is that these ‘no jurisdiction’ findings are not the end of the dispute; it simply means that an adjudicator cannot handle the dispute and, in most cases, it has to be referred to a court “de novo” (from the beginning), which is precisely what the Security of Payments Act was designed to avoid in the first place—expensive court proceedings and lengthy judicial processes. Worse, for those 25% of disputes that remain unresolved, the process of adjudication was a wasted expense. We fail to see the logic in these jurisdictional challenges unless we consider that the beneficiaries are the legal teams.

Leaving jurisdictional issues aside, adjudication has very short timelines. In an environment where timelines are critical, construction lawyers with real on-site construction experience as engineers, quantity surveyors, and commercial managers have the ability to produce the right answer in a short period of time. This makes an enormous difference to your chances of success—and is the main contributor to our own success in this challenging environment. This is because while others promise the ability to “mobilise a team on short notice to meet the onerous time requirements of adjudication proceedings”, our team resides in-house, which also results in lower costs.

Another facet of our practice area is advising clients with regards to the best practices in preparing and issuing compliant payment claims. We can advise on appropriate drafting for claims and invoices which address terms and conditions in contracts consistent with the legislation and statutory requirements. We can also advise on how best to respond to a Payment Claim and prepare a Payment Schedule.

Please contact us for a no-cost discussion.