CCA Adjudication

Q: I don't have a written contract; can I still use adjudication?

Yes. Adjudication can be used if the construction contract is not written or only partly in writing.

Q: Can I use adjudication even if the other party does not agree?

Yes. Adjudication is a legal right under the CCA. The respondent’s agreement is not required. They cannot stop or delay the process. They are bound by the outcome, whether they participate or not.

Q: My contract says I must resolve disputes by another method, such as mediation or arbitration. Can I still use adjudication?

Yes. Your contract does not override the CCA. (In legal terms, you cannot contract out of the CCA). So, you can use adjudication regardless of what your contract says.Note that other processes, for example, court, disputes tribunal, arbitral proceedings, or mediation, may run in parallel to the adjudication (Section 26 of the CCA). Contact us to discuss this further if you are in this situation.

Adjudication under the Construction Contracts Act (the CCA) is the most commonly used dispute resolution process in New Zealand for resolving building and construction disputes. It offers a fast and relatively straightforward statutory process for resolving disputes under construction contracts. The other party cannot delay or avoid the process and is bound by the outcome whether or not they participate in the process.

Process Overview

Starting the process

A party to a construction contract can refer a dispute to adjudication at any time by serving a notice of adjudication on the other party or parties then applying to the Building Disputes Tribunal (BDT) 2 to 5 working days later.

Appointment of an Adjudicator

BDT will appoint an adjudicator typically within 1 working day of the application and will issue the adjudicator’s notice of acceptance of the appointment.

Claim

The applicant (claimant) must serve the claim and any accompanying documents within 5 working days of receiving the adjudicator’s notice of acceptance.

Response

The respondent may serve a response within 5 working days after receiving the claim, or within any further time that the parties agree or the adjudicator allows.

Reply

The claimant may serve a written reply to the respondent’s response within 5 working days of receipt of the response. The adjudicator cannot extend this period.

Rejoinder

The respondent may apply to the adjudicator to serve a rejoinder to the claimant’s reply. The rejoinder must be served within 2 working days of receipt of the reply.

Determination

An Adjudicator’s decision is a ‘determination’. It binds the parties unless or until it is altered or set aside by a court, arbitral tribunal, or by agreement of the parties. The determination must be issued within 20 working days after the time for service of the response. The adjudicator may extend this to 30 working days or such other time as the parties agree.

FAQs

Explore our FAQs section for quick insights and find answers to common questions.

Step 1. Starting the process

The claimant starts adjudication by serving written notice of their intention to refer a dispute to adjudication on the other party or parties to the construction contract, and whether they intend to seek a charging order over the respondent’s construction site (section 29 of the CCA). This notice is called a notice of adjudication.

The claimant does not need the respondent’s agreement to start the process.

The claimant must serve the notice on the construction site owner if:

the owner is not the respondent, and
the claimant seeks a determination of an owner’s liability (section 30(a)) and/or approval of a charging order over the construction site (section 30(b)).

The notice of adjudication must state (section 28(2)):

the date of the notice;
the nature and a brief description of the dispute and of the parties involved;
details of where and when the dispute arose;
the relief or remedy that is sought;
whether approval for the issue of a charging order under section 29 is being sought;
whether a determination of the owner’s liability under section 30(a) and an approval for the issue of a charging order under section 30(b) are being sought;
details sufficient to identify the construction contract to which the dispute relates including: the names and addresses of the parties to the contract and, if available, the addresses that the parties have specified for service of the notices.

Section 28(2) must be complied with fully, because the adjudicator has very little discretion to waive any non-compliance.

A notice of adjudication must include the required statement of the respondent’s rights and obligations in the adjudication and a brief explanation of the process.

BDT has developed a template for a valid notice of adjudication that can easily be downloaded below and completed by the claimant. (Many disputes are settled following service of a notice of adjudication, as it sends a very strong signal to the respondent that the claimant is serious about pursuing the claim.)

Please note: a different form must be provided to residential occupiers under contracts entered into before 1 December 2015. Please contact us for further assistance.

Take care with the notice of adjudication because the adjudicator derives their jurisdiction from it. If the notice does not include a matter subsequently raised in an adjudication claim, the adjudicator cannot determine that matter unless the parties agree.

Although section 28(2) must be strictly complied with, a claimant doesn’t need to establish the full details of the quantum of a claim before serving the notice. The relief or remedy sought may be couched as in the amount of [$amount] or such other sum as the adjudicator may determine or in the form of a question, e.g. what sum is due?

However, an adjudicator cannot award more than the amount claimed, so a claimant should not fix the amount claimed without legal advice.

Step 2. Appointment of an Adjudicator

The claimant can apply to BDT to appoint an adjudicator by completing the online application form. The claimant must submit the online application form from the 2nd working day after the notice of adjudication was served up to and including the 5th working day.

The other parties’ consent is not required.

BDT will appoint a suitable adjudicator.

Alternatively, the parties may agree on one of BDT’s adjudicators. BDT will appoint the person selected by the parties, provided they are available and there is no conflict of interest. This choice can be indicated in the online application form.

Note that, however, an Authorised Nominating Authority (ANA), like BDT, must appoint the adjudicator if the claimant seeks approval for the issue of a charging order over the construction site (section 38A of the CCA).

BDT serves a notice of willingness to act on the parties once BDT receives:

the completed application form, and
the nominated adjudicator’s confirmation that he or she is willing to act, meets the eligibility criteria, and has no conflict of interest.

If the claimant has not done so, the parties (usually equally) or the claimant must pay the CCA Adjudication Fees for the adjudicator’s fees and expenses:

the fixed fee (for a fixed fee claim under the LVC scheme) or
the required security (for a general claim).

BDT does not charge an application fee for the nomination of adjudicators.

Upon receipt of payment, BDT will serve a notice of acceptance on the parties to complete the appointment process. If the claimant pays the fee when submitting the application, BDT will serve the notice of acceptance at the same time as the notice of willingness to act. This speeds up the process.

Once the notice of acceptance is served, the parties present their cases and evidence to the adjudicator in an extremely short period compared with court processes.

Step 3. Claim

The claimant must:

Submit their claim to the adjudicator (via BDT) within five working days of receiving the notice of acceptance (section 36(1)). The adjudicator cannot extend that period, so the proceedings end if the claimant doesn’t meet that deadline. The claimant may start the process again via a fresh notice of adjudication and a new application for appointment of an adjudicator.
Serve a copy of the claim and any accompanying documents on every other party to the adjudication before or immediately after they are served on the adjudicator.

The claim must:

Specify the nature or the grounds of the dispute and, to the extent that it remains relevant, be accompanied by a copy of the notice of adjudication and may be accompanied by any other documents (section 36(2)).
Be consistent with the notice of adjudication because the notice of adjudication fixes the adjudicator’s jurisdiction concerning the nature and scope of the dispute. If any new or different matters are raised in the claim, the adjudicator cannot deal with those matters unless the parties agree (which, in our experience, is unlikely).

A claimant is not limited to the arguments, contentions and evidence it put to the other party before the dispute crystallised.

There is no prescribed form for the adjudication claim. A sample claim is here:

The claim will typically be a narrative. It should be clear, concise, cogent, and accurate.

The best approach is to draft it as if you were telling your story to a neighbour over the fence or a reasonably intelligent teenager – it does not need to be drafted using ‘legalese’. Avoid repetition – repeating a point does not make it more convincing.

The claim should set out logically and sequentially the relevant chronology and background, identify precisely the disputed issues, the claimant’s case and the reasons for the dispute, and why (the factual and legal basis) the claimant believes it is entitled to a determination in its favour.

The claim must include all relevant evidence, documents, authorities, and other material that the claimant relies on to support their claim.

The adjudicator does not need to know irrelevant details such as what the other party has done to someone else. By including irrelevant material, you risk the adjudicator overlooking the critical material. Be clear and concise!

Step 4. Response

A respondent and any owner who is a party to the proceedings may serve a written response to the adjudication claim on the adjudicator (via BDT). If they decide to respond, they must:

Respond within five working days after receiving the claim or the notice of acceptance (whichever is later), or within any further time that the adjudicator allows or the parties agree.
Serve the response on the claimant and every other party to the adjudication either before or immediately after serving the response on the adjudicator.

Time limits

Time limits are strict. They must be complied with, because an adjudicator must not consider any response unless it was served in time (section 46(1)(b)). The adjudicator may allow further time only if the adjudicator considers that, in the circumstances, the additional time is reasonably required to allow the respondent to complete the written response (section 37). The time limit is deliberately short, and the presumption is against an extension of time being granted. A respondent would need a compelling argument to secure an extension of time. An application for an extension of time must be made before the expiry of the five-working-day period (and preferably as soon as possible).

Response contents

The respondent may raise any ground in the response that would amount, in law or in fact, to an arguable defence of the claim, whether raised before the adjudication or not. The response must be accompanied by any other documents, evidence, authorities and other material that the respondent wishes to rely upon.

The respondent may claim set-off or abatement to the extent of extinguishing the claim. Set-off is an independent cross-claim that cancels out the claim in whole or part. It may arise under:

an express contractual entitlement (e.g. liquidated damages for delay) or
the common law right to equitable set-off where the cross-claim is so closely connected with the claim that it would be manifestly unjust to allow the claim without taking into account the cross-claim.

Abatement is a reduction from the amount claimed arising from a breach of contract that reduces the value of the work carried out due to defective or incomplete work.

However, the response cannot include a counterclaim. If the respondent believes it is entitled to money from the claimant, it must file its own adjudication claim to recover that money.

Consolidation

If the respondent lodges a separate counterclaim, wherever possible, BDT will appoint the same adjudicator to deal with the claim and counterclaim. With the parties’ written consent, the adjudicator may consolidate the proceedings and determine all claims and counterclaims simultaneously.

In practice, the parties usually agree that claim and counterclaim should be determined simultaneously, and that the submissions and evidence for each may be read together for the purposes of both. However, even then, the parties must comply strictly with the time limits in sections 36 and 37 of the CCA.

Step 5. Reply

The claimant may serve a written reply to the response on the adjudicator (via BDT). If they decide to do so, they must:

Reply within five working days after receiving the response. The adjudicator cannot extend this period.
Serve the reply on the respondent and every other party to the adjudication either before or immediately after serving the reply on the adjudicator.

Special rules apply to adjudications under construction contracts entered into before 1 December 2015:

A claimant who receives a response that contains new or different grounds for opposing the claim and/or new or different evidence to that previously used or referred to by the respondent, should immediately apply to the adjudicator seeking approval to file further submissions under s42(1)(b) and stating the grounds upon which the application is based. If the adjudicator grants approval to the claimant to file further submissions under this provision of the Act, the adjudicator must also grant the respondent the right to file further submissions in reply.

Parties will usually be given a short period of one to three days each to file further submissions, but obviously the period of time will depend on the issues and the circumstances of the case.

Step 6. Rejoinder

The adjudicator may allow the respondent to serve a rejoinder (that is, a reply to the claimant’s reply).

If the respondent wishes to serve a rejoinder, the respondent must:

Immediately on receiving the reply, apply to the adjudicator to serve a rejoinder.

The application must be dealt with, and the rejoinder must be served within two working days of the respondent receiving the reply.

There is no power to extend the time (section 37A(4)(b)).

Step 7. Determination

An adjudicator’s decision is called a determination.

An adjudicator must determine:

whether any of the parties under the construction contract are liable (or will be liable if certain conditions are met) to make a payment, and
any questions in dispute about the rights and obligations of the parties under that contract.

Time for the determination

The adjudicator must determine the dispute within 20 working days after the time for service of the response.

The adjudicator may extend this to 30 working days, or the parties may agree to further time (section 46(2)).

Determination is binding

The adjudicator’s determination binds the parties unless or until the dispute is finally determined by arbitration or court proceedings or resolved by agreement or mediation after the adjudicator determines the dispute.

If a liable party fails to comply with the adjudicator’s determination, the other party may:

recover from the liable party, in any court, the unpaid amount and actual and reasonable costs of recovery awarded by that court,
suspend the construction work, or
apply for the determination to be enforced by entry as a judgment in a District Court.

Charging orders

In certain circumstances, an adjudicator may approve the issue of a charging order for the construction site owned by a party to the construction contract against whom an adjudication claim is made or an associate of that person.

Adjudicator’s powers

The adjudicator has broad duties, powers, and procedural obligations (sections 41-50). An adjudicator must comply with the principles of natural justice and procedural fairness. Tempered/qualified by the constraints inherent in the tight time limits under the CCA, and the provisional nature of the determination. Usually, the determination is made solely on the documents the parties submit within the required timeframes.

Adjudicators can convene conferences and inspect construction work or other things to which the dispute relates. In practice, these powers are rarely used (less than 0.5% of cases). Conferences are used to clarify matters. The adjudicator will ask the parties questions. The principles of fairness and natural justice will be applied, but no examination or cross-examination of parties or witnesses is allowed.

The parties may be represented at conferences, although the adjudicator may limit the number of representatives present in the interests of efficiency (section 67).

Substance of the determination

The adjudicator must consider only the matters referred to in section 45 of the CCA in determining the dispute:

The CCA
The construction contract
The claimant’s claim and any reply
Any response and rejoinder by the respondent
Any expert report
The results of any inspection the adjudicator performs
Any other matters that the adjudicator reasonably considers relevant.

The adjudicator’s determination must:

be in writing in the prescribed form (Form 3 in Schedule 1 to the Construction Contracts Regulations 2003)
contain the reasons for the determination (unless the parties agree in writing that reasons may be dispensed with), and
be dated.

Correction of errors (‘slip rule’)

Within two working days after the date on which a copy of the adjudicator’s determination is given to the parties, an adjudicator may, on his or her own initiative, correct in the determination any errors in computation or any clerical or typographical errors of a similar nature (section 47(3)). In practice, a party usually applies formally to the adjudicator for correction of an error, (copied to every other party). The adjudicator then exercises their ‘initiative’ in correcting the error.

This is akin to the ‘slip rule’, enabling courts and arbitrators to correct a slip or accidental omission where there is a clerical, arithmetical or mechanical error. It may not be used to vary the determination substantively, even if the error is plain on the face of the determination.

There is no power to extend the time for corrections.

The parties should promptly check the determination for errors and request any corrections as soon as possible so the adjudicator can consider and make any corrections within the two-working-day window.

Monetary claims

In a monetary claim, an adjudicator must determine:

Whether any of the parties are liable, or will be liable if certain conditions are met, to make a payment under the contract (section 48(1)(a)) and
Any questions in dispute about the rights and obligations of the parties under that contract (section 48(1)(b)).
Where liability is found under section 48(1)(a), the amount payable or conditionally payable and the date upon which that amount becomes payable, and may determine that the liability to make payment depends on certain conditions being met (section 48(3)).

Any amount determined by the adjudicator to be paid to a party must be paid within two working days after the date the determination is given to the parties, unless the adjudicator determines a later date for payment (section 59).

Non-monetary claims

In non-monetary claims, an adjudicator must determine the rights and obligations of the parties under the construction contract.

Scrutiny of Adjudicator’s Determination

The Building Disputes Tribunal is committed to delivering consistent, certain and professional adjudication services of the highest possible standard. Unless a party objects, each determination is scrutinised by one of the BDT’s legally trained quality reviewers before being given to the parties. This is a quality assurance process and a key element of the service.

Scrutiny of a determination is aimed at identifying any errors in computation, clerical or typographical errors, or any errors of a similar nature, and any errors as to form. This aims to reduces the likelihood of errors requiring correction by adjudicators within the two working days period after the determination is given to the parties, and provide an additional layer of protection since an adjudicator’s determination regarding payment of money under a construction contract is provisionally binding and enforceable.

BDT may draw the adjudicator’s attention to any points of substance or any internal inconsistencies in the determination, but this does not affect the adjudicator’s independence and autonomy. The determination is that of the adjudicator.

FAQs

Find quick insights and helpful information related to CCA adjudication

I don't have a written contract; can I still use adjudication?

Yes. Adjudication can be used if the construction contract is not written or only partly in writing.

Can I use adjudication even if the other party does not agree?

Yes. Adjudication is a legal right under the CCA. The respondent’s agreement is not required. They cannot stop or delay the process. They are bound by the outcome, whether they participate or not.

What happens if I win, but the other party still does not want to pay?

If you are awarded a sum of money, the other party must pay it within two working days after we issue the determination. If they don’t pay, you can enforce the determination as a debt. If you need to take this additional step, you may also claim your actual and reasonable costs of recovering the debt. See our briefing on enforcement for more information.

My contract says I must resolve disputes by another method, such as mediation or arbitration. Can I still use adjudication?

Yes. Your contract does not override the CCA. (In legal terms, you cannot contract out of the CCA). So, you can use adjudication regardless of what your contract says.

Note that other processes, for example, court, disputes tribunal, arbitral proceedings, or mediation, may run in parallel to the adjudication (Section 26 of the CCA). Contact us to discuss this further if you are in this situation.

My claim is only for a small amount, what are my options?

You may use the public Disputes Tribunal if your claim is within its jurisdiction (currently $30,000 and proposed to increase to $60,000).

However, many claimants with claims within the Disputes Tribunal’s jurisdiction choose adjudication through the private Building Disputes Tribunal because it is quick and efficient (6-9 weeks). A construction law expert adjudicates the dispute.

One key advantage of adjudication is that, if you are awarded a sum of money, the other party must pay it within two working days after we issue the determination.

Does the Disputes Tribunal/court decision take precedence over the Building Disputes Tribunal?

Determinations under the CCA are binding but not final. A later court decision will override the determination under the CCA.

You cannot seek a determination by BDT on an issue already determined in Court or the Disputes Tribunal.

How can I apply for the appointment of an adjudicator?

See Starting the Process above. You must serve a notice of adjudication on the responding party (and the owner if applicable) and then apply via our application form.

Do we need to agree on the adjudicator?

No, the parties do not need to agree. We are authorised to appoint the adjudicator.

However, if you and the other party have agreed on an adjudicator from our panel, we will appoint them if they are available and there is no conflict of interest.

Do I need a lawyer to help me prepare my case?

You do not have to have a lawyer act for you in adjudication.

However, adjudication is a legal process under the CCA. You should always take independent legal advice on any questions or concerns about your legal rights and obligations. It may also be worth asking a lawyer experienced in construction law and the adjudication process to advise you or to review your submissions before you serve them.

The Building Disputes Tribunal is neutral and independent and cannot give legal advice. We can talk you through the process and your options.

Can I have more time to serve my submissions (claim, response, reply, rejoinder)?

No, except potentially for the response. Timeframes in the CCA are deliberately short and strict.

The claim must be served within five working days of the adjudicator’s notice of acceptance of appointment. The adjudicator cannot extend this time (even if the parties agree).

A response must be served within five working days of the claim. The parties may agree to an extension, or the adjudicator may allow an extension of time (which must be requested within the five working days).

The time for any reply and rejoinder cannot be extended.

How long will the whole process take?

Most disputes are resolved within six weeks of the response.

The CCA requires the determination to be issued within 20 working days of the respondent’s response. The adjudicator may extend this to 30 working days, or as agreed by the parties.

Adjudication is almost certainly quicker (and less expensive) than litigation through the courts.

One significant advantage is that the respondent cannot delay the process and is bound by the outcome, whether they participate or not.

Is the determination made by the adjudicator binding on the parties?

Yes, 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.

Adjudication is not final: a party may have the dispute reheard in a court, or by an arbitral tribunal), but the determination is binding until then.

Our experience over more than 20 years is that only a small proportion of determinations are challenged. In the overwhelming majority of cases, the parties accept the determination as the final result.

Is there a hearing?

No. Adjudication is conducted on the documents, rather than in person. There is no formal hearing. The evidence and submissions are in writing.

When is payment of the Adjudication Fee required?

Payment is required at the time of the application.

If the adjudication is under BDT’s fixed fee adjudication scheme for low value claims (LVC Scheme), the entire fixed fee must be paid in advance before BDT starts the process.

For all other claims, a security deposit (a nominal amount based on the value of the claim) must be paid before BDT starts the process. The balance will be refunded if the adjudicator’s fees and expenses are less than the security deposit. If the adjudicator’s fees and expenses are greater than the security deposit, the parties must pay the balance within two working days of notification by BDT.

Who must pay the adjudication fee?

The parties are jointly and severally liable for the adjudicator’s fees and expenses. That is, they are each liable for all the fees.

If one party pays more than their share, they are entitled to be reimbursed by the other party.

The CCA presumes equal sharing of the fees. (This occurs about 80% of the time). The adjudicator can order unequal sharing if one party’s case “lacks substantial merit” or there is bad faith behaviour.

Generally, we expect the parties to each pay half of the cost at the outset, but in practice, often the respondent does not wish to pay. In that case, the claimant must pay the full fee if they wish to proceed. If they succeed, they are entitled to be reimbursed the amount ordered by the adjudicator in the determination.

The parties can agree to different cost-sharing arrangements, but (a) they remain jointly and severally liable, and (b) this is not binding if the agreement was made before the dispute arose, e.g. in the contract).

If I withdraw my claim, how much will I be charged?

Please refer to our fees page for cancellation fees.

I wish to cancel a site inspection or conference, what cancellation fees apply?

Please refer to our fees page for cancellation fees.

The other party proposed to settle the dispute; what do I need to do now?

We encourage parties to resolve their disputes themselves. However, the process continues, unless the parties agree to adjourn the adjudication process for settlement negotiations or payment to occur. We recommend you seek legal advice on any settlement agreement.

If you have settled, please let us know immediately, so no further costs are incurred. You will be charged for the costs to that date and a cancellation fee – please see our fees page.

Next steps

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