Security of Payments Lawyer NSW

Is adjudication under the Security of Payments Act right for you?

The Security of Payment Act aims to assist contractors in getting paid for construction work. As veterans of many applications and having served as adjudicators, we can attest that achieving success in these proceedings (with an over 80% success rate) is not an easy task. We once heard a judge describe adjudication, in jest, as a “quick and dirty” process.

In states where the Building Services Commission issues regular reports, over 25% of adjudications were reportedly left unresolved due to lack of jurisdiction (the “dirty” part). Although we fail to understand why a simple resolution process, where an adjudicator (an expert in the building industry) can make a quick and fair decision to resolve a dispute, would be interfered with, jurisdictional challenges are the norm in the “construction lawyer’s” industry. These range from allegations of (typically unfounded) breaches of licensing conditions, defective service of adjudication documents, incorrectly prepared payment claims, insufficient information in payment claims to trivial matters such as incorrect identification of the business name, ABN, or ACN number. We have also observed that lawyers without on-site construction experience cannot adequately address cost and scheduling matters, especially in small claims where the cost of engaging experts cannot be justified.

The bigger issue is that these ‘no jurisdiction’ findings are not the end of the dispute; it simply means that an adjudicator cannot handle the dispute and, in most cases, it has to be referred to a court “de novo” (from the beginning), which is precisely what the Security of Payments Act was designed to avoid in the first place—expensive court proceedings and lengthy judicial processes. Worse, for those 25% of disputes that remain unresolved, the process of adjudication was a wasted expense. We fail to see the logic in these jurisdictional challenges unless we consider that the beneficiaries are the legal teams.

Leaving jurisdictional issues aside, adjudication has very short timelines. In an environment where timelines are critical, construction lawyers with real on-site construction experience as engineers, quantity surveyors, and commercial managers have the ability to produce the right answer in a short period of time. This makes an enormous difference to your chances of success—and is the main contributor to our own success in this challenging environment. This is because while others promise the ability to “mobilise a team on short notice to meet the onerous time requirements of adjudication proceedings”, our team resides in-house, which also results in lower costs.

Another facet of our practice area is advising clients with regards to the best practices in preparing and issuing compliant payment claims. We can advise on appropriate drafting for claims and invoices which address terms and conditions in contracts consistent with the legislation and statutory requirements. We can also advise on how best to respond to a Payment Claim and prepare a Payment Schedule.

Please contact us for a no-cost discussion.