Knowledge · Finance
Adjudication,
pay now, argue later.
When a progress payment is disputed, the security of payment legislation offers a fast statutory route to decide how much is payable now, so money keeps moving while the parties argue the merits elsewhere. This reference covers what adjudication is, when a dispute escalates to it, how the process runs against its short timeframes, and what the determination actually does. General information, not legal advice.
01 / Overview
What adjudication is
Adjudication is the fast, statutory dispute-resolution process built into the security of payment legislation in every Australian state and territory. Its job is narrow and specific: to decide, quickly and on an interim basis, how much of a disputed progress payment is actually payable, so that cash keeps flowing down the contracting chain while the parties are still arguing about the underlying merits. An independent adjudicator reviews the claim and the response, largely on the documents, and determines the amount to be paid, when it is due and the interest on it.
The principle underneath it is worth stating plainly, because everything else follows from it. Adjudication is pay now, argue later. The determination is binding straight away, and a party that believes it is wrong generally has to pay first and pursue the final argument afterwards in court or arbitration. The regime was created because construction disputes used to freeze payment for months or years while a subcontractor who had done the work went unpaid, and the legislative answer was to keep the money moving on an interim basis and settle the final rights later.
Where this sits relative to progress claims
This node is downstream of progress claims and the payment schedule that answers them. The claim and the schedule are the ordinary machinery of getting paid; adjudication is the escalation that exists for when that machinery breaks down. The step-by-step working process, with the jurisdiction detail, is mapped in the security of payment guide, the per-jurisdiction Acts, windows and owner-occupier positions are looked up in security of payment by state, and this page is the reference for the adjudication mechanism itself. Everything here is general information, not legal advice, and a live dispute is a matter for proper advice.
02 / When it applies
When a payment dispute goes to adjudication
Adjudication does not open every dispute; it opens after the payment-claim and payment-schedule step, in defined situations. Three triggers cover most of them.
No payment schedule was served
The claimant served a payment claim and the respondent did not reply with a payment schedule inside the statutory window. Under most schemes the respondent then becomes liable for the full claimed amount, and adjudication (or a debt recovery route) is how the claimant enforces it. This is the most avoidable way to end up in adjudication, and it is a diary failure, not a dispute.
The scheduled amount is less than claimed
The respondent served a payment schedule proposing to pay less than the claim, stating reasons. The claimant disputes the shortfall and applies to have an adjudicator decide the amount actually payable. This is adjudication doing its core job, resolving a genuine difference over how much is due.
The scheduled or adjudicated amount is not paid
The respondent agreed an amount in a payment schedule, or an adjudicator determined one, and then did not pay it by the due date. The claimant escalates to recover it. A determination that is ignored does not evaporate; it becomes enforceable.
Notice that two of the three triggers are really failures at the payment-schedule step covered in the progress claims reference, not fresh disputes. The respondent who ignores a payment claim, or schedules an amount and then does not pay it, has usually created the adjudication rather than been dragged into one. The genuine dispute, the one adjudication was designed for, is the middle trigger: an honest disagreement over how much of the claim is properly payable.
03 / Process workflow
How adjudication runs, step by step
Six steps, each on a short statutory clock. The design goal is speed, so the timeframes are unforgiving in both directions, and the case is largely built before anyone reaches step two.
- 01
The payment claim and payment schedule run first
Adjudication is not the start of the process; it is the escalation. A valid payment claim is served, and the respondent either serves a payment schedule inside the window or does not. What happens at this step decides whether adjudication is even available and what the respondent may still argue.
- 02
The claimant lodges an adjudication application
Within a statutory timeframe after the trigger, the claimant applies for adjudication, setting out the claim and the submissions supporting it. The application is lodged through the mechanism the relevant Act provides, which in several jurisdictions means an authorised nominating authority.
- 03
An adjudicator is appointed
An independent adjudicator is appointed to decide the dispute, through the process the Act sets. The adjudicator is a specialist decision-maker, not a court, and the whole point of the design is speed, so the appointment happens quickly.
- 04
The respondent lodges an adjudication response
Within its own short timeframe the respondent puts in a response. In many jurisdictions the respondent cannot raise reasons for withholding payment that were not already in the payment schedule, which is why the schedule served weeks earlier quietly governs the whole dispute.
- 05
The adjudicator determines the amount
The adjudicator decides the adjudicated amount, the date it became or becomes payable, and the rate of interest, within a statutory timeframe from appointment or from the response. The determination is made on the documents, rapidly, on the material properly before the adjudicator.
- 06
The amount is paid, or the determination is enforced
The respondent pays the adjudicated amount by the due date. If it does not, the claimant can obtain an adjudication certificate and have it filed as a judgment debt, and in many schemes can suspend work. The determination is binding on an interim basis until the parties finally resolve the dispute elsewhere.
The detail that governs each step, how long the claimant has to apply, how the adjudicator is appointed, how long the respondent has to respond, and how long the adjudicator has to determine, is set by the specific Act in the state or territory where the work is performed. This page states the shape and quotes no timeframe as universal, because the numbers differ between jurisdictions and change over time. Confirm the current windows for the Act that applies where you build.
04 / The determination
What the determination does
The determination is the adjudicator’s decision, and it does three things: it fixes the adjudicated amount payable, the date that amount is or was due, and the interest rate on it. From the moment it is made it is binding on an interim basis, which is the entire point. The respondent must generally pay the determined amount now, whatever it thinks of the reasoning, and take any further argument to a court or an arbitrator later. The adjudicator has not finally decided the parties’ legal rights; the adjudicator has decided who holds the money in the meantime.
If the determined amount is not paid by its due date, the determination does not lapse. Under most schemes the claimant can obtain an adjudication certificate and file it as a judgment debt with a court, turning the determination into an enforceable order, and in many jurisdictions the claimant also gains a statutory right to suspend work on notice. This is what makes adjudication more than an opinion: an unpaid determination becomes an enforcement action with costs attached, quickly.
The interim nature cuts both ways and is easy to misread. A party that wins an adjudication has not necessarily won the dispute; it has secured the cash for now, and can still lose when the final merits are decided elsewhere. A party that loses one has usually not lost the war, only the round that decides who is out of pocket while the war continues. The grounds for challenging a determination directly are narrow, generally limited to matters such as jurisdiction or a denial of natural justice rather than a rehearing of the amount, so a dissatisfied party’s real remedy is usually the separate final proceeding, not an attack on the adjudication. The routes differ by jurisdiction, which is another reason a live matter belongs with an adviser.
05 / Australian considerations
The schemes, the models and the owner-occupier question
Adjudication is a creature of statute, and the statute is not the same across the country. The points below are labelled by evidence class, differ by jurisdiction, and change over time, so confirm the current Act before relying on any of them. None of this is legal advice.
- Legislation. Every state and territory has its own security of payment Act, and the schemes fall into broadly two families with different mechanics for how a claim proceeds and how the adjudicator is engaged. The concepts on this page, the payment claim, the payment schedule, the application, the response and the determination, recur across the schemes, but the triggers, timeframes and forms are jurisdiction-specific.
- Legislation. Whether the scheme reaches a residential contract made directly with an owner-occupier is not uniform. Several jurisdictions exclude owner-occupier residential contracts from the scheme, while others include them, and the position has moved over time in some places. A builder’s ability to adjudicate against an owner is therefore genuinely state-dependent, even where adjudication is freely available up and down the subcontract chain.
- Legislation. The reasons a respondent may rely on in adjudication are, in many schemes, confined to the reasons stated in the payment schedule. This is why the schedule served at claim time effectively builds the case, and why a reason omitted then can be lost for good. The mechanism is covered from the claiming side in the progress claims reference.
- Government guidance. The building or fair trading regulator in each jurisdiction publishes guidance on its security of payment scheme, and adjudication applications commonly run through authorised nominating authorities or an equivalent body specified by the Act. The correct channel is part of what must be confirmed locally.
- Professional recommendation. Because the timeframes are short and the consequences of missing them are severe, adjudication is a process to prepare for before it arrives, by keeping clean records, and to take advice on the moment it does. The value of this page is understanding the mechanism; the value of an adviser is applying the specific Act to a live claim.
06 / Common mistakes
Where builders lose in adjudication
Most adjudications are lost before they start, at the payment-schedule step or in the records kept months earlier. Very few are lost on the day because the adjudicator misjudged a genuinely balanced case.
Missing the payment schedule window
The single most expensive mistake in the whole regime. A respondent who does not serve a payment schedule in time can become liable for the full claimed amount and lose the right to argue its reasons in adjudication. The window is short and it is a diary task, not a legal one.
Reasons raised too late
A respondent who leaves a reason for withholding payment out of the payment schedule often cannot introduce it in the adjudication response. The case is effectively built at payment-schedule time, weeks before anyone thought they were in a dispute, which is why the schedule deserves real care.
Treating a determination as advisory
An adjudicator’s determination is not a suggestion. Left unpaid it can be filed as a judgment debt and enforced, and in many schemes it also grounds a right to suspend work. Ignoring it is how a payment dispute becomes an enforcement action with costs attached.
Assuming the scheme covers the job
Several jurisdictions exclude contracts made directly with a residential owner-occupier from the security of payment scheme, and coverage differs by state and over time. A builder who assumes the fast statutory route is available, and finds it is not, has lost time and a strategy at once.
Confusing interim with final
Adjudication decides who holds the money now, not who is finally right. A party that wins an adjudication can still lose in later court or arbitration proceedings, and a party that loses one has usually not lost the war. Reading an interim result as the end of the matter distorts the decisions that follow it.
Poor records at claim time
Adjudication is a documents contest decided at speed. The party whose claim carried its evidence, the stage definition, the approved variations, the correspondence, arrives ready, while the party reconstructing it under a statutory clock is already behind. The dispute is usually won or lost in the record kept months earlier.
07 / Best practice
How experienced builders handle it
The operator’s observation is that adjudication is won at claim time, not at adjudication time. By the time an application is lodged, the payment claim, the payment schedule and the contemporaneous records are already fixed, and the adjudicator decides on that material at speed. The builder who claims cleanly, the stage definition met, the variations approved and signed, the evidence attached, and who answers every claim it receives with a proper payment schedule inside the window, is rarely surprised by an adjudication, because the same discipline that produces a clean claim produces a strong adjudication position. The builders who get hurt are the ones for whom the payment schedule was an afterthought and the site records were never assembled.
The second habit is a diary discipline. Every payment claim that lands, sent or received, starts a short statutory clock, and the same is true at every step of an adjudication once it begins. Builders who treat those dates the way they treat a council deadline rarely lose a claim to the clock. Adjudication is also a cash event before it is a legal one, so it belongs in the same conversation as the rest of cash flow and working capital, not quarantined as a legal problem, and it matters most in exactly the conditions, a softening market, where payment disputes multiply.
Where software fits the workflow
Adjudication rewards the record, so the fix is to keep the record as the job runs rather than reconstructing it under a clock. In VIABUILD the progress claim is built from the job, with the stage, the approved variations and the supporting evidence assembled at the time the work is done and held in one place. That does not decide an adjudication, and the software makes no legal judgement, but a builder whose claims already carry their evidence arrives at a dispute prepared instead of behind.
08 / FAQ
Common questions.
Adjudication is a fast, statutory dispute-resolution process created by the security of payment legislation in each Australian state and territory. It exists to decide, quickly and on an interim basis, how much of a disputed progress payment is actually payable, so that money keeps moving through the contracting chain while the parties are still arguing. An independent adjudicator reviews the claim and the response, largely on the documents, and determines the amount to be paid, the date it is due and the interest rate. The determination is binding straight away and enforceable if unpaid, but it is interim: either party can still pursue the final merits in court or arbitration afterwards. The design is deliberately rapid, which is why the statutory timeframes are short and why the process rewards good records. This is general information, not legal advice, and the detail differs by jurisdiction.
Adjudication becomes available after the payment-claim and payment-schedule step under the relevant Act, and typically in one of three situations: the respondent served no payment schedule inside the statutory window, the payment schedule proposed to pay less than the amount claimed, or an agreed or determined amount was not paid by its due date. The claimant then lodges an adjudication application within the timeframe the Act allows. Because the triggers, timeframes and forms are set by the specific Act where the work is performed, and they differ between jurisdictions and change over time, confirm the current requirements for your state or territory before relying on any of this, and treat a live dispute as a matter for advice.
The whole point of adjudication is speed, so it runs on short statutory timeframes rather than the open-ended timetable of a court case, but this page deliberately quotes no specific number of days because the timeframes are set by each jurisdiction’s Act, differ between them, and change. What matters for a builder is the shape: there is a limited window to apply after the trigger, a short window for the respondent to respond, and a set period for the adjudicator to determine the amount from appointment or from the response. Every one of those windows is unforgiving, which is why the process is run against a diary. Confirm the current timeframes for the Act that applies where you build.
The determination is the adjudicator’s decision on the adjudicated amount payable, the date it is or was due, and the interest rate. It is binding on an interim basis, which is the key idea: the respondent must generally pay the determined amount now, and can only pursue the argument that it should not have to pay later, in court or arbitration. This is the pay-now-argue-later principle the whole regime is built on. If the determined amount is not paid, the claimant can usually obtain an adjudication certificate and file it as a judgment debt, and in many schemes gains a right to suspend work. The determination does not finally decide the parties’ legal rights; it decides who holds the money in the meantime.
Not in the way a court judgment is appealed. The security of payment schemes are designed to be quick and interim, so the grounds for challenging a determination are narrow, typically limited to matters such as a lack of jurisdiction or a denial of natural justice, rather than a rehearing of whether the adjudicator got the amount right. Some jurisdictions provide a limited internal review mechanism in defined circumstances. Because the determination is only interim, the fuller answer is that a dissatisfied party’s real remedy is usually to litigate or arbitrate the final merits separately, not to attack the adjudication. The available routes differ by jurisdiction, so this is one to take advice on rather than assume.
It depends on the jurisdiction, and this is a genuine trap. Several states exclude contracts made directly with a residential owner-occupier from their security of payment scheme, while others include them, and the position has changed over time in some places. So a builder’s ability to use adjudication against an owner is not uniform across Australia, even though the same builder can generally use it up and down the subcontracting chain. Confirm whether the scheme in your state or territory reaches the specific contract before relying on it, and read the mechanism alongside the broader picture in the security of payment guide.
09 / Terms
Glossary for this topic
Adjudication (the fast statutory process for deciding a disputed progress payment on an interim basis), payment claim (the statutory claim for a progress payment), payment schedule (the respondent’s statutory reply stating what will be paid and why, due inside a fixed window), adjudication application (the claimant’s application to have a dispute adjudicated), adjudication response (the respondent’s reply in the adjudication), adjudicated amount (the amount the adjudicator determines is payable), determination (the adjudicator’s decision), adjudication certificate (the document that lets an unpaid determination be filed as a judgment debt), authorised nominating authority (a body that appoints adjudicators under some schemes), pay now argue later (the interim-binding principle the regime is built on). The wider vocabulary lives in the construction glossary.
The natural next reads are the security of payment guide for the jurisdiction-by-jurisdiction process, and progress claims for the claiming discipline that keeps most disputes out of adjudication in the first place.
10 / Keep reading
Related knowledge, guides and features
11 / Further reading
Primary sources
- The security of payment Act and the building or fair trading regulator in the state or territory where the work is performed, for the current triggers, timeframes, forms, adjudicator appointment process and owner-occupier coverage. This page is general information only.
- The authorised nominating authority or equivalent body specified by the relevant Act, for how an adjudication application is actually lodged in that jurisdiction.
- A construction lawyer or a specialist adviser, for any live or anticipated payment dispute. Adjudication runs on short clocks and the strategy is jurisdiction-specific.
Win the dispute at claim time, not adjudication time.
VIABUILD builds each progress claim from the job with its stage evidence and approved variations attached, so if a payment is ever disputed the record is already assembled, with the builder making every call.