By Dr Samer Skaik
The jurisdiction of adjudicators is a critical element in the adjudication process for construction disputes. Adjudicators derive their authority by accepting referrals from an appointing authority, which hinges on the existence of specific jurisdictional facts, such as a valid construction contract and a legitimate payment claim. If an adjudicator errs in establishing these facts, it can lead to jurisdictional errors that may invalidate the entire adjudication process and any subsequent determination. This blog post delves into the nuanced and multifaceted challenges surrounding the jurisdiction of adjudicators, offering insights into the strategic considerations and potential pitfalls that parties must navigate in the adjudication process.
In Australia, the courts have consistently upheld the principle that adjudicators cannot expand their jurisdiction by mistakenly concluding that jurisdictional facts exist. This was clearly illustrated in the case of Chase Oyster, where the court outlined situations that could lead to jurisdictional errors, such as the mistaken denial or assertion of jurisdiction, or the failure to consider or disregard essential statutory requirements.
Respondents often face the dilemma of when to raise jurisdictional objections—whether to do so early in the response to a payment claim or later during the adjudication process. Raising objections too late can be risky, potentially leading to valid grounds being dismissed for lack of prosecution or being excluded by statutory provisions. On the other hand, addressing jurisdictional issues from the outset can be costly and time-consuming, especially when respondents are uncertain about the seriousness of the claimant’s intent to pursue adjudication.
Some adjudicators in Queensland, for example, have been known to apportion higher fees to respondents who raise jurisdictional objections late in the process, reasoning that earlier objections might have prevented the claimant from proceeding with adjudication altogether. This reflects the complex interplay between legislative guidelines, the adjudicator’s role, and the strategic considerations of the parties involved.
Adjudicators’ approaches to jurisdictional challenges can vary widely. Proactive adjudicators will ensure they have jurisdiction before proceeding with a determination, even if no objections have been raised. Conversely, reactive adjudicators may resign from the case, allow the matter to lapse, or proceed on the assumption of jurisdiction, leaving any objections to be settled by the courts.
Ultimately, the ability of an adjudicator to navigate these jurisdictional issues effectively depends on their training, experience, and the quality of submissions they receive. While some adjudicators may struggle with complex jurisdictional matters, others, particularly those dealing with high-value disputes, can address these challenges to the satisfaction of the courts, often by seeking additional submissions or extensions of time to ensure a thorough examination of all arguments.