My claim is only for a small amount, am I better to go to the Disputes Tribunal?
You are entitled to use the Disputes Tribunal to resolve your dispute if your claim is for less than $15,000 (up to $20,000 by agreement). However, many claimants with claims for less than $15,000 choose to exercise their statutory right and use the Building Disputes Tribunal’s highly successful fixed fee Low Value Claim adjudication service instead. The Building Disputes Tribunal has 30 years’ experience resolving building and construction disputes and has adjudicated more than 900 disputes since becoming an Authorised Nominating Authority in 2008. While one such case involved a claim in excess of NZ$100 million and a number have involved amounts in excess of NZ$10 million, 56% of all disputes referred to adjudication by the Building Disputes Tribunal are for amounts less than $50,000, including many where the amount in dispute is less than $5,000. Claimant’s choose adjudication through the Building Disputes Tribunal because they are able to access a quick (4-6 weeks), efficient, and highly professional dispute resolution service under which their disputes are adjudicated by an expert in construction law and building and construction practice.
The contract says we need to go to mediation in case of a dispute, can I still use adjudication?
Yes. A party to a construction contract has the right to refer a dispute to adjudication whether or not that dispute is the subject of another dispute resolution procedure, for example, court, disputes tribunal or arbitral proceedings, or mediation. Section 26 of the Construction Contracts act 2002 (the Act) Act provides that nothing in the Act prevents the parties from submitting a dispute to another dispute resolution procedure whether or not the proceedings for the other dispute resolution procedure take place concurrently with an adjudication. In essence, this is just another way of saying that the decision of the adjudicator is provisional and will be binding on the parties until the dispute is finally determined by arbitration or by court proceedings or resolved by agreement or mediation after the dispute is determined by the adjudicator.
Can I use adjudication even if the other party does not agree?
Yes. Parties to construction contracts cannot contract out of the Act. Any party to a construction contract has a statutory entitlement to refer a dispute to adjudication at any time that a dispute arises under that contract and does not require any other party’s agreement to refer the dispute to adjudication or as to the selection of the adjudicator to be appointed.
What happens if I win, but the other party still does not want to pay?
You can proceed to enforce the determination. If you need to take this additional step you are also entitled to your actual and reasonable costs of recovery. See our briefing on enforcement for more information.
Does the Disputes Tribunal/court decision take precedent over the Building Disputes Tribunal?
As a nominating authority, we have a duty to make an appointment when we receive a valid request for the appointment of an adjudicator under the Construction Contracts Act (CCA).
A court decision prevails over a determination under the CCA, that is to say, you cannot seek a determination over the exact same issues that have already been determined in Court.
The Building Disputes Tribunal is a private entity and we provide out-of-court dispute resolution services. Therefore, we do not share the information with the courts and we are unable to determine whether the issues submitted to the Disputes Tribunal are the same issues in dispute under this adjudication process.
On the other hand, if the adjudication process moves forward, and you believed that there is no jurisdiction for the adjudicator to make a determination, you could always bring a jurisdictional challenge.
Appointment of Adjudicator
How can I apply for the appointment of an adjudicator?
All you need to do is to complete the simple online application form. However, prior to making an application for appointment, you will need to serve a notice of adjudication on the responding party (and the owner if applicable). You can find a template for a notice of adjudication on our resources page.
Do we need to agree on the adjudicator?
No. There is absolutely no requirement under the Act for the claimant (the party referring a dispute to adjudication) to seek the agreement of the respondent (the party against whom a claim is made in an adjudication) to the selection and appointment of the adjudicator.
The Building Disputes Tribunal (BDT) is an Authorised Nominating Authority (ANA) – BDT is authorised by the Minister to appoint adjudicators.
The claimant does not require the agreement of the respondent to apply to BDT for the appointment of an adjudicator. Under section 33(1)(d) of the Act, the claimant may request an ANA chosen by the claimant to select a person to act as adjudicator. Because of its unique position and extensive experience, BDT will almost certainly be better placed than most parties or their advisers to know who the most appropriate person is to act as adjudicator in any particular dispute and, since 2008, parties and their advisers have consistently entrusted BDT to perform that function.
Parties are of course welcome to agree on one of BDT’s adjudicators if they wish, and subject to availability and there being no conflict of interest, BDT will appoint the person selected by the parties. The application form for the appointment of an adjudicator has provision for the parties to advise BDT of any such agreement.
However, the claimant can secure the immediate appointment of an adjudicator simply by applying to BDT in its capacity as an ANA, without any discussion or consultation with any other party to the adjudication, on the 2nd working day after the notice of adjudication was served and on any further day up to an including the 5th working day after service of the notice simply by completing the online application form.
I don't have a written contract; can I still use adjudication?
Adjudication can be used regardless of whether the construction contract is written or oral or partly written and partly oral.
My contract says I need to resolve any disputes by mediation or arbitration or another dispute resolution method, does that mean I can't use adjudication?
No. Under section 25 of the Act, any party to a construction contract is entitled to refer a dispute arising under that construction contract to adjudication except where the parties have agreed to refer disputes between them to arbitration and the arbitration is an international arbitration. A ‘dispute’ is defined in section 5 of the Act as: a dispute or difference that arises under a construction contract. An example of a dispute is a disagreement between the parties to a construction contract about whether an amount is payable under the contract, or whether there has been a breach of the contract, including a breach of any term/warranty implied into every construction contract by the Building Act 2004, or any other enactment.
A party to a construction contract has the right to refer a dispute to adjudication whether or not that dispute is the already the subject of another dispute resolution procedure, for example, court, tribunal or arbitral proceedings, or mediation. Section 26 of the Act provides that nothing in the Act prevents the parties from submitting a dispute to another dispute resolution procedure whether or not the proceedings for the other dispute resolution procedure take place concurrently with an adjudication. In essence, this is just another way of saying that the decision of the adjudicator is provisional and will be binding on the parties until the dispute is finally determined by arbitration or by court proceedings or resolved by agreement or mediation after the dispute is determined by the adjudicator.
Do I need a lawyer to help me prepare my case?
No. You are not required to have a lawyer act for you in relation to an adjudication proceeding. However, if you have any questions or concerns about your legal rights and obligations, you should always take independent legal advice. It may also be worth asking a lawyer who is experienced in construction law and the adjudication process to review your submissions (claim, response, reply or rejoinder) before you serve them on the adjudicator and every other party.
Can I have more time to serve my submissions (claim, response, reply, rejoinder)?
A claim must be served on the adjudicator within five working days of receipt of the adjudicator’s notice of acceptance of appointment and on every other party either immediately before or after service on the adjudicator. There is no power for the adjudicator to grant an extension of time, even if the parties agree. If the claim is not served on the adjudicator within five working days, the adjudication proceeding is terminated and, if the claimant wishes to refer the dispute to adjudication, the claimant would need to start again by serving a fresh notice of adjudication and making a new application to BDT for appointment of an adjudicator.
A response must be served within five working days of the claim, unless either the parties agree to an extension of time for the response, or the adjudicator allows an extension of time. In this regard it should be noted that time limits for actions by the parties and the adjudicator under the Act are short and strict. The general presumption is against an extension of time being granted by an adjudicator. If a respondent or owner wishes to seek an extension of time for service of the response, the application must be made (with time for the adjudicator to consider it and respond) before the expiry of the default five working day period.
Where a reply and rejoinder are permitted, those time periods (five and two days respectively) cannot be extended under the Act.
How long will the whole process take?
Adjudication is quick and cost effective. Most disputes are resolved in less than six weeks from the time the process is initiated.
The Construction Contracts Act 2002 establishes the procedural requirements to be followed when referring a matter to adjudication and the process to be followed by the adjudicator who is generally required to make a decision on the disputed matters (known as a determination) within 20 working days of receipt of the respondent’s response to the claim. This period may be extended by the adjudicator to 30 working days, or any other period by agreement of the parties.
Adjudication will almost certainly be quicker and less expensive than litigation through the courts and is now the most commonly used process for resolving building and construction disputes in New Zealand. One of the significant advantages that adjudication has over any other dispute resolution process, is that the time limits for the various procedural steps are fixed by the Act and a respondent cannot delay, avoid, or avert the process and will be bound by the outcome whether or not the respondent participates as it is entitled.
Is the determination made by the adjudicator binding on the parties?
An adjudicator’s determination is binding unless or until it is altered or set aside by a court, arbitral tribunal, or by agreement of the parties.
While adjudication does not necessarily achieve a final settlement of any dispute under a construction contract because any of the parties has the right to have the same dispute heard afresh and determined in a court, or by an arbitral tribunal if the contract provides for arbitration, a determination is binding in the interim, and the empirical evidence to date overwhelmingly indicates that the majority of adjudication determinations are accepted by the parties and complied with as the final result.
Is there a hearing?
Adjudication is conducted on the documents, rather than in person. Therefore, there is no formal hearing or meeting during an adjudication proceeding. The evidence and submissions are in writing.
When is payment of the Adjudication Fee required?
Payment of security for the adjudicator’s fees and expenses is required to be made at the time the application for appointment of an adjudicator is filed with the Tribunal. The notice of acceptance which sets in train the timetable for the adjudication proceedings will not be served on the parties by the Tribunal until payment of the prescribed e security is made in full and the funds are clear.
If the adjudication is undertaken under BDT’s fixed fee adjudication scheme for low value claims (LVC Scheme), the entire fee is required to be paid as security before a notice of acceptance will be issued by BDT.
For all other claims, a nominal amount based on the value of the claim is required to be paid before a notice of acceptance will be issued by BDT.
If the adjudicator’s fees and expenses are less than the security held, the balance will be refunded to the parties by BDT in accordance with the adjudicator’s determination.
In the event that the adjudicator’s fees and expenses are greater than the amount held as security, the parties must pay the balance within two working days of receipt of notification by the Tribunal of such additional fees and expenses.
Who must pay the adjudication fee?
The parties are free to make any arrangements as between them for payment of the adjudication fees and expenses after a dispute arises. (Please note: any agreement about how costs are to be apportioned is not binding on the parties if that agreement was made before the dispute arose).
However, and notwithstanding any agreement as between the parties, the parties shall at all times be jointly and severally liable for the adjudicator’s fees and expenses, including any fees and expenses incurred by the adjudicator in the absence of a determination fixing the costs and expenses of the adjudication (ie, where an adjudicator finds there is no jurisdiction to determine the claim or the parties reach a settlement), together with any additional costs howsoever incurred by the Tribunal in recovering any overdue monies on a full indemnity basis.
How can I pay the adjudication fee?
Payment of all BDT fees and expenses may be made by direct credit or by credit card (Visa and MasterCard only). Please note that if paying by credit card there is an additional merchant transaction fee of 2.95% payable.
I wish to withdraw my claim, how much will I be charged?
In any case where an adjudication claim is withdrawn, or the dispute between the parties is resolved after receipt by BDT of an application to appoint an adjudicator and before the provision of a determination, BDT will charge a fee being not less than $750.00 in respect of the fees and expenses incurred in relation to the administration of the adjudication up to and including the date on which the adjudication claim was withdrawn or the Tribunal was notified that the dispute had been resolved together with the adjudicator’s fees and expenses incurred up to and including the date of withdrawal.
I wish to cancel a site inspection or conference, what cancellation fees apply?
In any case where a party notifies the adjudicator in writing that a scheduled conference or inspection is to be vacated, whether or not the dispute between the parties has been settled, or the conference or inspection is adjourned by agreement, or the adjudication claim is withdrawn or terminated, or the dispute between the parties is resolved, and the notice is received by the adjudicator during ordinary business hours between ten and six working days from and including the date of the scheduled conference or inspection, BDT will charge a cancellation fee in the amount of 50% of the Adjudicator’s daily charges for the scheduled attendances.
If such notice is received five working days or less from and including the date of the scheduled conference or inspection, BDT will charge a cancellation fee in the amount of 75% of the adjudicator’s daily charges for the scheduled attendances.
What if the other party does not want to pay its share of the prescribed security for the adjudicator's fees and expenses?
While the presumption under the Act is that each party will bear its own costs and expense and share the adjudicator’s fees and expenses in equal proportions, BDT cannot compel anyone to pay any amount as security for an adjudicator’s fees and expenses.
A notice of appointment will not be issued until the full amount of security prescribed by BDT has been paid into BDT’s trust account.
In practice, the claimant will almost always pay the prescribed security to secure the immediate appointment of the adjudicator following service of the notice of adjudication and making an application for the appointment of an adjudicator.
In such cases the claimant will, in its notice of adjudication, and subsequently in its adjudication claim, seek a determination from the adjudicator that the respondent, or any other party to the adjudication, is liable to meet the adjudicator’s fees and expenses in such proportions as the adjudicator determines, and to reimburse the claimant for any amount paid in excess of its share of the adjudicator’s fees and expenses.
Termination of claim
I no longer wish to pursue my claim; can I withdraw it?
Under section 39 of the Act, an adjudication claim may be withdrawn by a claimant if:
(a) the claimant serves written notice of withdrawal on the adjudicator, unless the respondent objects to the withdrawal and the adjudicator recognises a legitimate interest on the respondent’s part in obtaining a determination in respect of the dispute; or
(b) the parties agree on the withdrawal.
The other party proposed to settle the dispute; what do I need to do now?
Parties are always encouraged to find their own resolution of any dispute referred to adjudication. However, unless the parties agree to adjourn the adjudication process for any negotiation/payment to occur, it will continue, and the parties will be required to comply with the timetabling provisions of the Act.
In practice this is most likely to occur after the claim is served and before the response to the claim is served; or, after the response is served and before the determination is made. If the parties agree to negotiate before the response is served, the adjudicator will simply extend the time for service of the response to enable any settlement discussions to take place. If the parties agree to negotiate after the response is served, they will be required to extend the time for making a determination to such date as the adjudicator may agree, otherwise the adjudicator will simply continue with the adjudication in order to meet his/her statutory obligation to make a determination within 30 working days of receipt of the response.
Where the parties do reach a settlement, they should advise the Registrar as soon as possible to ensure no further costs are incurred. The parties will be liable to pay an administration fee of $750.00 plus the adjudicator’s fees and expenses to date. Parties wishing to take those costs into account in any settlement negotiation should request a cost incurred to date amount from the Registrar.