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As a construction business, there may be instances where a dispute arises with a client, contractor or other construction business. You may be able to settle this conflict yourselves. However, you may need to use a dispute resolution process to resolve your issue. One such process is adjudication. This article will outline:

  • what adjudication is;
  • how your business can apply for it; and 
  • the typical adjudication process. 

What is Adjudication?

Adjudication is an alternative dispute resolution process for resolving construction and build disputes. During adjudication, a neutral third-party or adjudicator will resolve the conflict which arrises under the construction contract. This outcome reached by the adjudicator is termed a determination.

How Do You Apply For Adjudication?

If you are a party to a construction contract, you can refer any dispute that arises from that contract to adjudication. To begin the process, you will have to draft and serve a written notice of adjudication to the other disputing party or parties. This notice must contain:

  • the date that you have written the notice; 
  • a brief description of the dispute, including where and when this conflict arose; 
  • the remedy that you are seeking; 
  • details to identify the construction contract from which your dispute arose from. These details should include the names and addresses of all of the parties to the contract; 
  • a statement of the other party’s (the respondent) rights and obligations in the adjudication; and
  • a brief outline of the adjudication process. 

Selecting an Adjudicator

Once you have served this notice to the respondent, you will need to choose an adjudicator. There are three processes for choosing an adjudicator. Here, you:

  • and the other disputing party can agree on a neutral third party. You should select this third party as soon as practicable after you have served the notice; 
  • and the other disputing party agree on a body or person to nominate an adjudicator for you. This body or person has five working days from the date that you served the notice to nominate a suited individual; or 
  • apply to have an authorised nominating authority, such as the Building Disputes Tribunal, choose an adjudicator. This authority has two to five working days to appoint an adjudicator.

If you are going to choose your own adjudicator, keep in mind the following criteria:

  • an adjudicator cannot be a party to your construction contract. A good adjudicator will act independently and impartially;
  • the proposed adjudicator should disclose all conflicts of interests they may have. If there are any conflicts, this individual should only proceed as your adjudicator if all parties to the dispute consent to it; and
  • the proposed adjudicator should have expertise in dispute resolution and the subject-matter of your particular dispute. The Arbitrators’ and Mediators’ Institute of New Zealand offers adjudication training and qualifications.

Requesting an Adjudicator

Once you have decided who you wish to be your adjudicator, you must send a request. This request must:

  • be a written document; 
  • be sent alongside a copy of your notice of adjudication; and
  • state that is made under the relevant law. For building disputes, you should state that the request is made under the Construction Contracts Act 2002.

The chosen adjudicator must indicate that they agree to be an adjudicator within two working days of receiving your request. Additionally, to indicate that they have accepted the request, the adjudicator must send you and the other disputing party a written notice of acceptance.

Adjudication Proceedings

Once you have served a notice of adjudication and decided upon an adjudicator, you have five working days to refer the dispute to your adjudicator by writing an adjudication claim. This adjudication claim must:

  • describe your dispute. This description should involve all of the relevant events in chronological order and the disputed issues that arose from these events;
  • outline your argument. This outline should involve both the factual and legal basis for why you believe that you are entitled to an outcome, or determination, in your favour; 
  • be consistent with your notice of adjudication; and
  • be accompanied by any other relevant or supporting documentation.

You must also serve a copy of this adjudication claim to every other party involved.

The respondent may serve on both you and the adjudicator a written response to your claim. If this response contains any new grounds for opposing your claim, you can reply to these arguments.

Once you have served all of these arguments to the adjudicator, they will come to their final determination. In determining a case, an adjudicator must consider:

  • the relevant law;
  • the relevant provisions of your construction contract; 
  • your adjudication claim and any other written submissions;
  • the respondent’s response; and
  • (where relevant) the report any experts or inspectors involved in the adjudicator. 

You will receive a determination within 20 working days from the last submission. This determination has to be in writing and contain the:

  • adjudicator’s final outcome, such as an order to repay money owed or complete contracted work;
  • reasons for this outcome; and 
  • date on which the determination was issued. 

The determination will be binding on you and the other parties involved unless the dispute is later resolved by arbitration, court proceedings or mediation. 

Key Takeaways

Conflict and disputes are inevitable. However, resolving these disputes in an effective way is key to the success of your relationships with clients, contractors and other construction businesses. Adjudication is a dispute resolution process that is catered towards resolving construction and building disputes. If you are interested in engaging in adjudication, contact LegalVision’s New Zealand disputes lawyers on 0800 005 570 or complete the form on this page.

Frequently Asked Questions 

Is adjudication legally binding?

The outcome of adjudication proceedings, or a determination, will be legally binding unless the dispute is later resolved by arbitration, court proceedings or mediation.

What is the purpose of adjudication?

Adjudication is intended to resolve building or construction disputes in a fair, neutral and effective manner.

What is the adjudication process?

The adjudication process involves the following steps: the claimant serves the respondent a notice of adjudication; an adjudicator is appointed by the disputing parties, an appointed body or an authorised nominating authority;  the claimant serves a claim to the adjudicator and the respondent; the respondent can serve a written response; and the adjudicator analyses these submissions and comes to a final decision or determination.

What is an adjudication claim?

An adjudication claim is a written document that a claimant serves to an adjudicator to inform the adjudicator of their side of the dispute.

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