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Adjudication is a new method for New Zealand to resolve building and construction disputes in a quick and eifficient manner pursuant to the Construction Contracts Act 2003. Adjudication is relatively straightforward and intended to provide for the speedy resolution of disputes arising under a construction contract and thereby to improve cash flow within the construction industry. Adjudication is where one party to a construction dispute refers the dispute to an adjudicator who provides a determination that is enforceable at Court. The process takes as little as 6 weeks from start to finish and provides a cost effective and timely option to all the parties involved in construction disputes including home owners, builders, subcontractors and consultants. Typically it is done on the "papers" which means that the adjudicator decides the dispute based on the documents filed by each party and without having a hearing with cross-examination, or any need to meet with the parties in person. Adjudication has been popular in New Zealand since it come into effect and with the comprehensive service offered by Building Disputes Tribunal more parties can take advantage of the adjudication process to resolve their disputes without it taking months (or years) for a dispute to be decided and without incurring the same level of costs as would be incurred in the more traditional forms of dispute resolution. Generally the Act applies to every construction contract entered into after 1 April 2003 whether or not governed by New Zealand law and whether the construction contract is written, oral, or partly written and partly oral. Adjudication can be used even if the dispute is the subject of another dispute resolution procedure, for example, court or arbitration. Unlike other alternative dispute resolution procedures the parties do not need to agree to Adjudicate. The Act differentiates between residential and commercial construction contracts to the extent that different procedures apply for making and giving notice in relation to adjudication and suspension of the works between them. Any party to a construction contract can commence an adjudication provided that there is a dispute or difference between the parties. A dispute can include: a dispute as to whether a claimed amount is due to be paid or not; a disagreement as to the time that construction works have taken, a disagreement about the quality of workmanship or a dispute as to whether an item of work was a variation or not. Adjudication cannot be avoided or contracted out of and a reluctant party cannot delay the process without the consent of the claimant. In simple terms this means that, unlike mediation, one party can proceed to have the dispute decided at adjudication and the responding party has no ability to stop or delay that process. Essentially, the parties are bound by a determination of an Adjudicator on a dispute until it is finally overtaken by a decision of a court or arbitral tribunal or a settlement agreement between the parties. This means, for example, that if an amount is ordered to be paid, it must be paid and any disagreement with the decision can be resolved by way of another dispute resolution process such as arbitration or court. Multiple adjudications such as for an extension of time or variation to the contract works are permissible provided that each adjudication arises from a separate dispute. |
