Proposal for a “Dual Scheme” model of statutory adjudication for the Australian building and construction industry

Abstract

PurposeThe purpose of this paper is to outline a proposal for a Dual Scheme model of statutory adjudication for the Australian building and construction industry.Design/methodology/approachThe paper deals with the security of payment problem in the Australian construction industry and the legislative response to that problem in New South Wales and elsewhere more generally. The paper highlights deficiencies in current adjudication schemes in Australia and proposes a revised methodology of adjudication by means of the proposed Dual Scheme model. The Dual Scheme is explained in detail and examples are given showing how the Dual Scheme would work in practice.FindingsThe Dual Scheme of adjudication allows for adjudication of “progress claims” (just as they are adjudicated now under the “Defined Scheme”), but also provides for separately adjudicated “money claims” in a similar way to that done under the “Non‐specific Scheme”. Both parties to a construction contract can take advantage of adjudication under a Non‐specific Scheme whilst simultaneously maintaining the relative time and cost benefits of the Defined Scheme in dealing with progress payment claims. Implementation of the proposed Dual Scheme would require new legislation.Originality/valueThe Dual Scheme is not a proposal to merely amalgamate two existing models of adjudication in Australia. Rather, it is a Dual Scheme incorporating the philosophy of two disparate systems of adjudication framed in a companionable form. It is hoped that the Dual Scheme may act as a common starting point for eventual agreement between the various interested groups as to what a national scheme of statutory adjudication in Australia will resemble in the future. The Dual Scheme proposal may be of interest in other jurisdictions where statutory adjudication for the construction industry has been introduced or is being contemplated.