Adjudication FAQ
Adjudication is a unique fast track statutory dispute resolution process under the Act. It is the most commonly used dispute resolution process for resolving such disputes.
Adjudication FAQ
What is contractual adjudication?
When can you use adjudication to resolve a dispute?
You can use adjudication at any stage after a dispute has arisen, but (unlike statutory adjudication under the Construction Contracts Act 2002) the parties must agree in writing to use adjudication to resolve their dispute. They can do this before a dispute arises by including NZDRC’s model contractual adjudication clause in their terms and conditions of trade or in a legal instrument such as a Deed of Trust, or by entering into a separate agreement to adjudicate after a dispute has arisen. The adjudication agreement must be in the form published on the NZDRC website.
Where parties have agreed to submit a dispute to adjudication, no party may commence arbitration or legal proceedings in relation to that dispute until the adjudication ends other than commencing proceedings necessary to preserve its legal rights.
What types of disputes can be resolved through adjudication?
Adjudication can be used to resolve a wide range of disputes, including, among other things: disputes in relation to a contract, such as disputes over payment, whether a party has performed their obligations under a contract, the proper interpretation (the meaning and effect) of the contract, and the existence, validity, or termination of a contract; disputes arising in relation to a trust between a trustee and one or more beneficiaries, or a trustee and one or more other trustees; and disputes in relation to a cause of action in tort such as a negligence or nuisance claim.
What is the role of the adjudicator?
The adjudicator’s role is to determine the outcome of the dispute in accordance with the procedures set out in the NZDRC Adjudication Rules by applying the relevant law to the preferred evidence. The adjudicator must remain independent and impartial throughout the process.
How long does adjudication take?
The process usually takes about 35 working days under the NZDRC Adjudication Rules. However, the process does have flexibility built into the rules to ensure that the parties and the adjudicator have reasonable time to enable the effective and complete determination of the issues in dispute.
Is there a hearing?
No. The adjudicator will determine the dispute based on the documents (submissions and evidence) provided by the parties.
An adjudicator may request further submissions, information, or evidential material from the parties, convene a conference of the parties if the adjudicator considers it desirable (for example, to clarify any aspects of the matters in dispute or the parties’ submissions) and/or may visit or inspect land, premises, property, goods, documents, technologies, or any other items relevant to the dispute.
Is adjudication confidential?
Yes, unlike court proceedings, adjudication is a private and confidential process. The details of the dispute, the proceedings, the documents prepared for the adjudication, and the adjudicator’s determination must not be disclosed unless the law requires disclosure or if the parties agree to disclose certain information.
Is an adjudicator’s determination binding and enforceable?
An adjudicator’s determination is binding on the parties, unless and until the dispute is finally determined by arbitration, legal proceedings in a court or tribunal, or subsequent agreement between the parties.
An adjudicator’s determination has full effect and a determination that requires the payment of money may be enforced as a debt due in a court (as well as the reasonable costs and expenses of recovery) even if arbitration or legal proceedings in relation to the dispute are started or are in progress.
Can an adjudicator's decision be challenged?
Yes, an adjudicator’s decision can be challenged. If a party is dissatisfied with the adjudicator’s decision, they can take the same dispute to court or arbitration (if there is an arbitration agreement).
However, the determination must be complied with before a party starts arbitration or legal proceedings to challenge a determination unless the parties have agreed otherwise.
Who pays for adjudication?
Usually, the parties pay their own costs and an equal share of the adjudicator’s fees and expenses.
However, an adjudicator may make a different apportionment if they consider that is appropriate in the circumstances ie, if a party has caused costs to be incurred unnecessarily or has acted in a contemptuous or improper manner during the adjudication.
What happens if the adjudicator's decision is not followed?
If the adjudicator’s decision is not followed, it can be enforced by a court unless there are compelling reasons not to do so. Such reasons could include a serious procedural error during the adjudication process, a breach of natural justice or a manifest error of law. However, these are exceptional circumstances, and in most cases, the adjudicator’s decision is enforced.