Reflecting on the Evolution of Security of Payment Laws in Victoria and My Contribution to the Debate

By Dr Samer Skaik

As a committed advocate and researcher in construction law, I have always been passionate about enhancing the efficiency and fairness of the adjudication process within the building and construction industry. Recently, a significant government report has been released, addressing the ongoing challenges and potential reforms in the adjudication process under the Security of Payment Act in Victoria. This report serves as a critical analysis and reflection of the current state and future directions of the security of payment laws in Victoria. Herein, I share my insights and reflections on the report’s findings and the context of my contribution to this important discourse.

The Report’s Background and Purpose

The comprehensive government report was aimed at, inter alia, investigating the efficacy of the adjudication process as a dispute resolution mechanism, particularly focusing on the timely and fair payment within the construction industry. It sought to address the concerns raised by various stakeholders about the perceived inequities and inefficiencies in the system. My submission to this inquiry was driven by a desire to contribute to a more equitable and streamlined adjudication process, leveraging my experience and research in the field.

The Need for Reform in the Adjudication Process

The report elucidates the growing concerns regarding the adjudication process, including the increasing tendency for judicial interventions due to the adjudication decision-making quality and adherence to legislative requirements. These interventions often result in delaying the dispute resolution process, contrary to the original intent of the Security of Payment legislation. The report cites my views on the need for a senior adjudicator review mechanism as a means to mitigate these challenges. It reflects a shared understanding that introducing such a mechanism could significantly reduce the delays and inefficiencies plaguing the current system.

Advocating for a Review Mechanism and other reforms:

In my submissions and publications cited by the report, I have consistently advocated for the implementation of a review mechanism within the adjudication process. This advocacy is rooted in the belief that an additional layer of scrutiny could lead to more accurate and fair determinations. The report acknowledges these contributions and its impact on the recent reforms in Western Australia and New South Wales, recognizing the potential of a review mechanism to resolve disputes more efficiently and reduce the burden on judicial review systems.

Here are some quotes from the report about my contribution:

“New South Wales adjudicator and academic specialising in security of payment law, Dr Samer Skaik has published extensively on the merits of providing for senior adjudicators to review adjudication determinations. His submission to the Inquiry stated that ‘aggrieved respondents’ are currently using judicial review as a ‘delaying tactic’. He believed that a mechanism for an adjudication review would help resolve this issue. He argued that enabling adjudication reviews would provide ‘a safety net that can capture erroneous determinations away from court system which will improve industry confidence and certainty in adjudication outcomes’. page 124.

“The Committee notes that both the proposed New South Wales and existing Western Australian adjudication review models incorporate many of Dr Skaik’s processes for effective review.” page 126.

Dr Skaik expressed concern that adjudicators may not be getting regular enough
adjudication work to maintain their knowledge and skills in applying the SOP Act to
payment disputes.” page 135.

“In contemplating the lack of transparency surrounding the fees ANAs charge adjudicators, Dr Skaik suggested empowering the Victorian Building Authority to establish ‘a reasonable fixed fee, or a scale of maximum fees for lodging applications depending on the monetary value of the payment claim’. He felt that such a measure would aid in making the adjudication under the SOP Act more ‘transparent, trustworthy, and cost-effective’” page 142.

“Premier Cranes and Rigging, the National Fire Industry Association, and Dr. Samer Skaik—an academic specializing in security of payment laws—also supported the introduction of trust accounts for retention money.” page 177.

Reflecting on the Report’s Findings and Moving Forward

The findings and recommendations of the report are a testament to the collective efforts of industry professionals, academics, and policymakers to critically evaluate and improve the adjudication process. As we move forward, it’s crucial to continue this collaborative approach, ensuring that any reforms to the adjudication process are well-informed, practical, and aligned with the principles of fairness and efficiency.

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