Building Dispute Resolution for Subcontractors

Subcontractors undertaking sub contract works on construction projects are dependent on the builder for payment and completion of the works.

Provided that the payment procedures of the Construction Contracts Act are being followed, a subcontractor should always know where they stand on a project. And, understanding the Act can be a very powerful tool as a subcontractor can exercise its rights to ensure it does not end up in financial difficulty. For example, the works can be suspended and disputes can be adjudicated.

Building Disputes Tribunal can help subcontractors with understanding the options available for the resolution of building and construction disputes including adjudication, arbtiration and mediation.

Building Disputes also provides sample payment claim and payment schedule forms to assist parties to the construction contract.

What exactly is adjudication?

Adjudication is a dispute resolution process that is intended to resolve disputes in a quick and relatively inexpensive manner. It is only available for use by parties to a construction contract who have a dispute arising during the completion of the construction works.

It is a similar process to a Court proceeding with the dispute arising under the building or construction contract being referred to an independent 3^rd party who reviews the ‘evidence’ on each side before making a decision that is binding and enforceable. The Construction Contracts Act 2002 establishes the procedural requirements to be followed when referring a matter to adjudication which is summarised on the Building Disputes Tribunal website.

Adjudication does not necessarily achieve a final settlement of any dispute because either of the parties has the right to refer the same dispute to be hard afresh at Court or in arbitration (where the contract provides). However, in New Zealand, the majority of adjudication determinations are accepted by the parties and the matter is no litigated further.

It is different to mediation as mediation relies on the consent of the parties to the exploration of issues between them with a neutral 3^rd party who will not be making an enforceable decision.

Adjudication is also unrelated to the procedure used in the Weathertight Homes Resolution Service for the resolution of “leaky home” matters but can, in certain situations, be used to resolve a leaky home dispute should the claimant wish to refer the dispute to adjudication rather than rely on the WHRS.

We invite you to review our website and to telephone us if you have any questions regarding your construction project or the resolution of any disputes that may arise.