New laws 2020 - changes to adjudication
The Building Industry Fairness (Security of Payment) and Other Legislation Amendment Act 2020 (the Act) includes important industry reforms to further protect payments to contractors including new progress payment requirements, payment offences and new ways to secure payment if the respondent does not pay the adjudicated amount.
These reforms also include the following changes to adjudication. Changes introduced by BIFOLA are marked in bold.
A complex payment claims now defined as being a payment claim of more than $750,000 inclusive of GST, which means adjudication applications that may have previously been considered a standard claim – may now be considered a complex claim. This new threshold only applies to applications made after 1 October 2020.
Meaning of response date used to determine the time for deciding an adjudication application at section 85(2) is clarified -
- the day the adjudicator receives the adjudication response from the respondent (if applicable); or
- (clarification) if the respondent is unable to provide an adjudication response because they did not give a payment schedule to the claimant—the last day the respondent could otherwise have given an adjudication response; or
- otherwise—the last day the respondent could give an adjudication response under section 83
If an extension of time for deciding an adjudication application is agreed or decided under section 86, the adjudicator must notify the Registrar in writing of the extension within 4 business days – the notice may be given by emailing the Registrar at firstname.lastname@example.org.
If a claimant withdraws from adjudication either by giving written notice of discontinuation or because the respondent has paid the amount the subject of the adjudication application the claimant must, as soon as practicable, give written notice to the registrar of the withdrawal.
When the adjudicator gives the Registrar a copy of the decision under section 88 it must also provide a notice of all fees and expenses paid, and to be paid, to the adjudicator for the decision at the same time the adjudicator gives the decision to the claimant and the respondent.
If an adjudication decision requires the respondent to pay an amount (the adjudicated amount) to the claimant – when the amount is paid, the responded must notify the Registrar within 5 business days and provide evidence of the payment.
(Clarification) an adjudicator is not entitled to be paid any amount more than the lower of:
- a reasonable amount having regard for the work done ad expenses incurred by the adjudicator
- the prescribed maximum.
See the Building Legislation Changes - Guide for Registered Adjudicators for detailed information on the BIFOLA changes that impact progress payments and the adjudication process.