Bowen Buchbinder Vilensky

Pitfalls of Construction Adjudication

By Les Buchbinder, Director at Bowen Buchbinder Vilensky Lawyers

11 April 2014

 Disputes are more common in the building and construction area than in most other sectors of the economy.  Poor workmanship, time constraints and demands for payment for extras falling outside of an original contract, are just a few of the typical reasons for disputes.

When the WA Government passed the Construction Contracts Act in 2005, the aim was to enable disputes to be fast-tracked through an Adjudication process, rather than for disputing parties to have to wait to go to Court.

While Adjudication has been a great step forward in many ways, there is one major pitfall: if a claim is made against your organisation, you have only fourteen days to respond.  These are calendar days, not business days, and no concession is made for public holidays.  For example, if you receive a claim on 22nd December, you have until the 5th of January to respond.

The short response period may not always be a problem, at most times of the year, and for simple cases.  But it’s a very different matter in disputes which involve major construction project payments or where there are significant factual or legal complexities involved, and these need to be dealt with  unexpectedly when key staff are on leave.

My advice to companies which may find themselves having to respond to Adjudication claims is threefold:

1. Put in place procedures for making your organisation aware, as soon as practicable, of a claim for Adjudication having been served and for dealing with it swiftly.  This may involve educating staff as to the processes involved and the importance of the timeframes under the Act as well as having contingency plans in place as to how the response is to be dealt with if, for example, critical staff members are absent or there is a risk that a claim for Adjudication may be served just prior to or over a public holiday period or when for some other reason the business may be temporarily closed.

2. Get your documentation/software in order. As a Respondent, it is up to you to supply the Adjudicator with a copy of any relevant documents in support of your response.  Most often this happens by email.  The onus falls on you to make sure that documents are delivered to the Adjudicator in a way that they can be opened and read (compliance with Electronic Transactions Act 2011 (WA).  It seems incredible, but there are situations where Respondents fail simply because the documents they thought they had delivered to the Adjudicator either never arrived, or could not be opened by the Adjudicator.  If you don’t get your documentation and software in order, your side of the story may simply never be heard.

3. Take legal advice  The detail of a claim or response is critical.  The very wide range of contracts used in the construction industry today underlines the importance of looking at each case individually.  The best time to get legal advice is before offering or signing a contract.  The next best time is the moment you suspect there are grounds for a dispute!

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