Adjudication Determinations and Fees under Security of Payment Legislation

By Dr Samer Skaik

The determination made by an adjudicator holds significant weight in resolving payment disputes within the construction industry. Understanding the legal framework and implications of adjudication determinations is essential for all stakeholders involved in construction projects.

Quality of Determinations

The quality of an adjudicator’s determination is critical for ensuring fair and effective resolution of payment disputes. The content and reasoning provided in the determination play a pivotal role in upholding the integrity of the adjudication process.

  • Requirements of Determinations: Adjudicator’s determinations must be in writing and include reasons unless both parties have requested otherwise, as per the Security of Payment Act. There are no specific requirements regarding the length or detail of the reasons, but they should show active engagement with the dispute and reasoned consideration of the issues raised by the parties.
  • Judicial Review: Recent court decisions in Australia have confirmed that adjudication determinations are not reviewable for errors of law alone, emphasizing the focus on the quick and efficient nature of the adjudication process.

Issue Estoppel and Abuse of Process

Understanding the legal doctrines of issue estoppel and abuse of process in the context of adjudication determinations is crucial for parties involved in payment disputes.

  • Consistency in Determinations: The Security of Payment Act establishes provisions to ensure consistency in the determination of the value of works. This provision has sparked debates regarding its relationship with the issue estoppel doctrine, which prevents new adjudication of the same claim that has already been decided in a previous adjudication.
  • Avoiding Abuse of Process: The courts have addressed instances where subsequent adjudication applications were deemed an abuse of process, emphasizing the need for parties to exercise caution to avoid duplicative or repetitive adjudication attempts.

Adjudicator’s Fees and Expenses

The entitlement of adjudicators to fees and expenses is a crucial aspect that reflects the statutory intention to promote expeditious procedures within the adjudication process.

  • Apportionment of Fees: The adjudicator is entitled to be paid fees and expenses as agreed with the parties or determined to be reasonable, with the claimant and respondent being jointly and severally liable to pay in equal or determined proportions. The Act, however, does not provide specific guidelines for apportionment criteria.
  • Timely Determinations: The Act implies that the adjudicator is not entitled to fees if they fail to make a decision within the specified time limits, emphasizing the importance of expeditious determinations.
  • Validity of Determinations: It has been judicially decided that an adjudicator’s determination made outside the statutory time limits remains valid, with the statutory remedy of not paying the adjudicator’s fees considered sufficient for the breach.

Legal Liabilities and Good Faith

Understanding the legal liabilities of adjudicators and ANAs is crucial in gauging the implications of their actions within the adjudication process.

  • Liability Protection: Neither the adjudicator nor the ANA is liable for anything done or omitted in good faith in performing their functions under the SOP Act, providing a safeguard for their actions within the adjudication process.
  • Fee Entitlement: The question of whether an adjudicator, who has acted in good faith and delivered the determination within the statutory time limits, is still entitled to fees if the determination is set aside remains a point of contention. The absence of authority in NSW suggests a need for clarity on this matter, with precedence from other jurisdictions indicating that unenforceable decisions may not hold value for the parties involved.


The recent court decisions in Australia surrounding the review of adjudication determinations under the Security of Payment Act have significant implications for the construction industry. These decisions underscore the need to uphold the quick and efficient nature of the adjudication process while also emphasizing the importance of reasoned and engaged determinations.

Further exploration of key aspects such as the entitlement to fees and expenses for adjudicators, the apportionment of fees, and the legal safeguards for adjudicators and ANAs highlights the complex legal landscape surrounding adjudication. The expeditious nature of determinations, the apportionment of fees, and the legal safeguards for adjudicators are crucial in ensuring the fairness and efficiency of the adjudication process.

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