What Is Adjudication?
Adjudication is the fast, statutory dispute resolution process created by Australia’s Security of Payment legislation, in which an independent, appropriately qualified adjudicator decides how much, if anything, is payable on a disputed construction payment claim. It is designed to resolve genuine payment disputes in a matter of weeks rather than the months or years a court case can take, on a “pay now, argue later” basis that keeps cash moving while the parties’ final contractual rights remain open to be settled separately if either side wants a final answer.
Key takeaways
- Adjudication is the statutory process for resolving a disputed construction payment claim quickly, typically producing a determination within weeks.
- It is triggered when a payment claim is disputed — a payment schedule proposes a lower amount, or none is issued at all.
- An adjudicator’s determination is binding and enforceable on an interim basis — it decides who gets paid now, not the parties’ final contractual rights.
- The process runs to strict timeframes for lodging an application and response, and is conducted largely on the papers rather than in a courtroom.
- Adjudication is faster and cheaper than litigation, but it doesn’t replace it — either party can still pursue a final resolution afterward.
What is adjudication?
Adjudication is the dispute resolution mechanism built into each state and territory’s Security of Payment Act, specifically for construction payment disputes. Instead of a payment disagreement sitting unresolved for the length of a court case, which can run for years on a complex commercial matter, an independent adjudicator reviews the parties’ submissions and issues a binding determination on the amount payable, usually within a matter of weeks.
The process exists to solve a specific, practical problem in construction: cash flow. A subcontractor waiting on a disputed payment can’t simply pause the rest of their business until a court eventually rules; adjudication gives them a genuinely fast, statutory route to be paid what an independent third party considers is properly due, without either side having to abandon their broader legal position.
Importantly, adjudication determines an interim entitlement, not a final legal one. The determination must be complied with, and can be enforced like a court judgment if it isn’t, but either party remains free to pursue litigation or arbitration afterward to finally resolve the underlying contractual dispute, with the adjudicated amount then taken into account in that final reckoning.
In plain terms
Adjudication is “pay now, argue later” — an independent umpire quickly decides who gets paid what in the meantime, while the bigger legal argument, if either side wants to keep having it, can still play out separately.
When adjudication is used
Adjudication becomes available once a payment claim made under a Security of Payment Act is genuinely disputed, rather than simply unpaid through oversight.
- A payment schedule proposes paying less than the amount claimed, and the claimant disagrees with the reasons given.
- No payment schedule is issued at all within the statutory deadline, and the scheduled or claimed amount still isn’t paid.
- A scheduled amount is agreed but the respondent still fails to pay it by the due date.
The adjudication process, step by step
The process is deliberately quick and largely conducted in writing, though the exact steps and timeframes differ slightly between states. The broad sequence, however, is consistent across Australia’s Security of Payment Acts.
The claimant lodges an adjudication application with an authorised nominating authority, attaching the payment claim, the payment schedule if one was given, and supporting submissions. An adjudicator is then appointed, the respondent lodges a response, generally limited to the reasons already raised in its payment schedule, and the adjudicator may seek further information or hold a conference before issuing a written determination.
| Step | Who acts | Typical timeframe |
|---|---|---|
| Adjudication application lodged | Claimant | ~10-20 business days after the payment schedule or its due date |
| Adjudicator appointed | Authorised nominating authority | Shortly after the application is lodged |
| Adjudication response lodged | Respondent | ~5-10 business days after receiving the application |
| Determination issued | Adjudicator | ~10 business days after accepting the application |
What an adjudicator considers and decides
An adjudicator’s job is narrow and specific: decide how much of the disputed payment claim is properly payable, based on the payment claim, the payment schedule, and the submissions each party lodges, not to resolve every aspect of the underlying contractual relationship. That narrow scope is exactly what makes the process fast enough to be useful.
In most states, a respondent is limited to the reasons it already raised in its payment schedule and cannot introduce brand-new grounds for withholding payment at the adjudication stage, which is precisely why a properly reasoned payment schedule matters so much at the time it’s issued, not just as a formality to beat the deadline.
Is an adjudication determination final?
No, and this is the single most misunderstood feature of adjudication. A determination settles who must be paid now, on an interim basis, but it does not finally decide the parties’ actual rights under the contract. Either side can still pursue litigation or arbitration to have the underlying dispute properly and finally resolved.
That said, a determination is not merely advisory. It must be complied with, and if the paying party doesn’t pay the determined amount, the claimant can generally have an adjudication certificate registered and enforced as a judgment debt through the courts, giving the process real teeth despite its interim nature.
Who is involved in adjudication
An authorised nominating authority appoints an adjudicator, an independent, appropriately qualified and accredited individual, not a court or tribunal, to determine the specific dispute. Both the claimant, usually a contractor or subcontractor owed money, and the respondent, the party disputing the claim, lodge written submissions, and the adjudicator decides based on those documents.
Legal representation is common but not required, and the relatively informal, document-based nature of the process is a deliberate design choice to keep it faster and less costly than litigation, though complex disputes, particularly around defective work or extensive variations, can still involve significant preparation on both sides.
Adjudication vs litigation vs arbitration
Adjudication sits alongside other dispute resolution routes, but it is not a substitute for either:
- Adjudication vs litigation — adjudication is fast and interim, typically resolved in weeks; litigation is slower and more expensive, but produces a final, binding determination of the parties’ actual contractual rights.
- Adjudication vs arbitration — arbitration is a private, contractually agreed process that also produces a final and binding determination, generally taking considerably longer than adjudication and closer in formality to litigation.
- Adjudication vs mediation — mediation is a facilitated negotiation aimed at a mutually agreed settlement; adjudication is a determination imposed by an independent third party regardless of whether the parties agree with it.
Common mistakes in adjudication
Most avoidable losses in adjudication come down to preparation and timing rather than the underlying merits of the claim.
- Not lodging the adjudication application within the strict statutory window, which can bar the claim entirely regardless of merit.
- Submitting a payment schedule with vague or incomplete reasons, then trying to raise new grounds later — most Acts don’t allow it at adjudication.
- Treating a determination as the final word on the dispute and failing to pursue litigation or arbitration afterward if a genuine contractual disagreement remains.
- Not paying a determined amount by the due date, risking enforcement as a judgment debt plus the cost of that enforcement.
- Underestimating the preparation an adjudication response needs, given the respondent generally gets one narrow opportunity to state its full case.
How My Trade Hub helps if you reach adjudication
My Trade Hub keeps every progress claim linked back to the measured Bill of Quantities and schedule of values it was built from, so if a payment claim is ever disputed, you already have an itemised, dated record of exactly what was claimed, what had been completed, and how the figure was calculated.
That record is exactly the kind of evidence an adjudication application depends on — because an adjudicator decides largely on the papers submitted, having your claims, variations and progress history already organised in one place, rather than reconstructed under a tight statutory deadline, gives you a genuinely stronger starting position.
Frequently asked questions
What is adjudication in construction?
Adjudication is the fast, statutory dispute resolution process under Australia’s Security of Payment legislation, where an independent adjudicator decides how much is payable on a disputed construction payment claim, usually within a matter of weeks.
Is an adjudicator’s decision final?
No. An adjudication determination is binding and enforceable on an interim basis, but it doesn’t finally decide the parties’ contractual rights. Either party can still pursue litigation or arbitration afterward for a final resolution.
How long does construction adjudication take?
It varies by state, but adjudication is designed to be fast — a determination is typically issued within around 10 business days of the adjudicator accepting the application, with the whole process from application to determination usually taking a matter of weeks.
Who can apply for adjudication?
A claimant who has made a payment claim under a Security of Payment Act, typically a contractor, subcontractor or supplier, can apply for adjudication once the claim is disputed, whether through a reduced payment schedule or no schedule at all.
What happens if you don’t pay after an adjudication determination?
The claimant can generally have an adjudication certificate registered and enforced through the courts as a judgment debt, giving the determination real enforceability despite it being an interim rather than final decision.
How much does adjudication cost compared to going to court?
Adjudication is generally significantly faster and cheaper than litigation, since it’s conducted largely on the papers with strict, short timeframes, rather than through the extended process, evidence and hearings a court case typically requires.
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