What is Adjudication?
Adjudication is a dispute resolution process that allows Parties to present their dispute to an independent third Party for a decision. In an adjudication, the individual or organization wishing to refer a dispute to adjudication (the “Claimant”) and the individual or organization from whom money is alleged to be owing (the “Respondent”) present their dispute to a third party (the “Adjudicator”). The Adjudicator will consider the evidence and make a decision (a “Determination”) within thirty days of the Claimant submitting its supporting documents. If the Adjudicator orders a Party to pay the other Party, the payment must be made within ten days of the issuing of the Determination.
Interim adjudication is designed to help workers and businesses to be paid on time for their work and resolve payment disputes.
Some features of Adjudications under the Construction Act are:
- Adjudications are quick. After an Adjudicator receives the Claimant’s documents, the Adjudicator must render a Determination in 30 days;
- Determinations are binding only until a decision is made in a subsequent proceeding. Either Party can commence a proceeding in court or through arbitration. The Determination is binding until a final decision is made in the subsequent proceeding;
- Adjudications are cost-effective. Adjudications are less costly than arbitration and litigation. For further information on costs, please refer to the Schedule of Fees and Fees, Retainers and Payments;
- Adjudication is available as a right. A Party to a construction contract can commence an adjudication without the other Party’s consent; and
- The adjudication process is set by the Adjudicator, as opposed to the process being guided by a set of rules. The Parties can suggest a process to the Adjudicator for consideration, as outlined at Adjudication Process.
Overview of Adjudication Process
Commencement of adjudication:
- The adjudication process commences when the Claimant provides the Respondent with a Notice of Adjudication (and sends ODACC an electronic copy). For further information on how to commence an adjudication, please refer to Commencing an Adjudication.
- The Respondent may then provide the Claimant (and ODACC) with a Response to Notice of Adjudication. For further information on how to respond to a Notice of Adjudication, please refer to Response to Notice of Adjudication.
- After the Respondent receives the Notice of Adjudication, the Claimant and the Respondent have four days to select an Adjudicator and obtain the Adjudicator’s consent to act as the Adjudicator. Adjudicators have the right to refuse to conduct an adjudication. For an Adjudicator to be officially appointed to an adjudication, the Adjudicator must agree to conduct the adjudication (s. 13.9(6) of the Construction Act).
- If the Parties cannot agree on an Adjudicator, either Party can ask ODACC to appoint an Adjudicator. ODACC will appoint an Adjudicator within seven days of receiving the appointment request. For further information on the Adjudicator selection process, please refer to Selecting an Adjudicator.
- The Adjudicator will conduct the adjudication in the manner he or she determines appropriate in the circumstances, in accordance with s. 13.12(4) of the Construction Act. Some adjudications may include a hearing by videoconference, some may have an in-person hearing, some may require a site visit, and some may proceed only with documents. For further information about the adjudication process, please refer to Adjudication Process.
- After an Adjudicator consents to adjudicate a dispute, the Adjudicator will contact the Parties to negotiate the Adjudication Fee. The Adjudication Fee may consist of a flat fee, or an hourly rate (plus disbursements). If the Adjudicator and the Parties cannot agree on an Adjudication Fee, the Adjudicator may ask ODACC to set the fee. ODACC will set the fee in accordance with the Schedule of Fees approved by the Attorney General for Ontario. For further information on fees, please refer to the Schedule of Fees and Fees, Retainers and Payments.
- FAQ: Who is responsible for paying the cost of adjudications? The Parties to an adjudication are responsible for an equal share of the adjudication fees unless the Adjudicator orders otherwise (s. 13.10(3) of the Construction Act). Each Party to an adjudication will be responsible for their own costs, regardless of the outcome (s. 13.16 of the Construction Act). Pursuant to s. 13.17 of the Construction Act, an Adjudicator has the discretion to order a party to pay all or a portion of the other Party’s costs where the Party acted in a manner that was “frivolous, vexatious, an abuse of process or other than in good faith”.
Parties Submit Documents:
- When the Adjudicator communicates the adjudication process to the Parties, the Adjudicator will specify the supporting documents (and number of pages) that each Party may submit to the Adjudicator for consideration. The Claimant’s supporting documents are due within five days of the appointment of the Adjudicator. The Adjudicator will notify the Respondent as to when it must submit its supporting documents. For further information on supporting documents, please refer to Supporting Documents.
Determination Due Date:
- The Adjudicator will make a Determination within thirty days from the day the Claimant submits its documents (the “Due Date”). The Due Date may be extended with the consent of all the Parties and the Adjudicator. For further information on Determinations, please refer to Determinations.
- ODACC will certify the Determination within seven days of the Determination being sent to the Parties. For further information on certified Determinations, please refer to Determinations.
Flowchart of ODACC’s Adjudication Process
Below is a flowchart of ODACC’s adjudication process: