Adjudication Explained: What It Is and How It Works

If you’ve served a payment claim under a Security of Payment Act and the head contractor has disputed it, the next step is adjudication. But what exactly is adjudication, and how does it work? Here’s a clear explanation of the adjudication process — without the legal jargon.

What Is Adjudication?

Adjudication is an independent dispute resolution process built into Australia’s Security of Payment laws. When a payment claim is disputed (via a payment schedule), either party can apply for adjudication to have the dispute resolved by an independent, qualified adjudicator.

Think of it as a fast, paper-based version of a court hearing — but without lawyers arguing at a lectern and without waiting 12 months for a hearing date. The adjudicator reviews documents from both sides and makes a binding determination, typically within 10 business days.

Who Is an Adjudicator?

Adjudicators are independent professionals — typically construction lawyers, quantity surveyors, or experienced construction professionals — who are accredited under the relevant state’s SOP legislation. They are appointed by an adjudication registry or nominating authority registered under the Act.

Adjudicators are not judges, but their determinations have the force of law. An adjudication determination can be registered as a court judgment and enforced as such.

How Does the Adjudication Process Work?

Step 1: Lodging the Adjudication Application

After receiving a payment schedule (or when the response deadline has passed with no schedule), the claimant lodges an adjudication application. This application includes:

• The original payment claim
• Any payment schedule received
• Supporting documentation — contracts, invoices, delivery dockets, photos, emails, site diaries
• A submissions document explaining the claimant’s position

The application must be lodged within the required timeframe — typically 10 business days from receiving the payment schedule.

Step 2: Adjudicator Appointed

The nominating authority appoints an adjudicator, who accepts the application and notifies both parties.

Step 3: Adjudication Response

The respondent (head contractor) has a short time to provide an adjudication response — typically 5 business days. In the response, they set out their case, present their evidence, and explain why the claimant shouldn’t be paid the full amount.

Step 4: The Adjudicator’s Determination

After reviewing both sides’ submissions and evidence, the adjudicator makes a determination. This typically takes 10 business days from when the adjudicator accepted the application. The determination:

• States the adjudicated amount (how much the respondent must pay)
• The due date for payment
• The adjudicator’s reasons for the decision

Step 5: Payment or Enforcement

If the adjudicated amount is in the claimant’s favour, the respondent must pay within the specified time (usually 5 business days). If they don’t pay, the claimant can register the determination as a court judgment and pursue enforcement.

Is Adjudication Final?

An adjudication determination is legally binding and immediately enforceable — but it’s technically an “interim” determination. In theory, a dissatisfied party can re-open the dispute in court proceedings. In practice, this rarely happens — the cost and time of court proceedings make challenging an adjudication determination unattractive for all but the largest disputes.

How PayClaim Manages Adjudication for You

The adjudication process requires careful preparation — the right evidence, the right submissions, the right strategy. PayClaim handles the entire adjudication process on behalf of Australian subcontractors, from preparing the application to managing the response period. Flat fee, no surprises. Start your free claim today.