Adjudication under the Building and Construction Industry Security of Payment Act 1999 (NSW) (SOPA) is designed to be fast and decisive. It allows contractors, subcontractors, and suppliers to recover unpaid progress payments without becoming entangled in long-winded court proceedings. But speed comes at a cost: SOPA imposes unforgiving deadlines and technical requirements that can catch even seasoned operators off guard.
Why It Is Important to Prepare Early for Adjudication
If you’re a claimant, you typically have only 10 business days to lodge an adjudication application after receiving a disputed payment schedule. As a respondent, your time to reply is even shorter: just 5 business days to submit your adjudication response. There’s no time to start pulling together arguments, documents or witnesses after the clock starts ticking. You need to be ready before the dispute arises.
Early preparation avoids scrambling. It gives you a clear view of your commercial and legal position and lets you present a coherent case when the pressure is on. It also gives your team breathing space to gather the right evidence, liaise with advisors, and build a strategy that aligns with your broader commercial interests.
Steps You Can Take to Prepare for an Adjudication as a Claimant
Nail the fundamentals of your payment claim
A valid payment claim must:
- Be in writing and clearly identify the work performed;
- Specify the amount claimed;
- Be addressed to the correct party; and
- State that it is made under the Security of Payment Act.
If it misses one of these elements, it’s not a valid claim. The most common pitfall is failing to adequately identify the construction work performed. Courts have shown little patience for vague or generic claims.
Use a “test balloon” strategy
If you suspect a certain claim (or claims) may end up needing to be adjudicated, consider claiming them in a payment claim before the payment claim you plan to adjudicate. This allows you the opportunity to see how the respondent deals with those claims in their payment schedule before it “matters”. You can then focus your preparation accordingly, including gathering more evidence or crafting targeted responses.
This approach buys you time and may also help flush out surprises. In tight adjudication timeframes, any foresight is an advantage.
Plan backwards from your deadline
If you have a hard deadline for when you need an adjudication decision (for instance, before the end of financial year), work backwards. Factor in time to prepare the claim, receive the schedule, file the application, and obtain a decision. Remember: adjudicator’s can receive extensions for issuing their decisions so building in a bit of float can be important.
Assemble your claim materials early
The more evidence you have ready, the more persuasive your case. For each disputed item:
- Collate original emails or instructions that support your entitlement.
- Include drawings, delivery dockets, variation orders, and approvals.
- Provide pricing breakdowns and quotes.
- Where appropriate, include expert reports (e.g. regarding quantum or delay).
All of this should be in one place well before you submit your payment claim.
Allocate internal resources
Assume your team will need to dedicate at least 2–3 hours per disputed item (more if your records aren’t up to snuff). If you’re dealing with multiple items or variations, this quickly adds up. Give your staff adequate time to support the claim preparation, particularly project managers or contract administrators who were on the ground.
Steps You Can Take to Prepare for an Adjudication as a Respondent
Always issue a payment schedule
Under SOPA, if a respondent fails to provide a payment schedule within 10 business days (or any shorter contractual period), they become automatically liable to pay the full claimed amount. You can’t argue entitlement or dispute the claim later.
That means you should always issue a payment schedule even if:
- The claim seems invalid;
- It’s addressed to the wrong person;
- You think it relates to non-contractual claims (e.g. damages); or
- The amount is obviously inflated.
Case law has reinforced that even imperfect claims can attract SOPA consequences.
Make the payment schedule count
Under section 20 of the Act, you can’t introduce new reasons in your adjudication response that weren’t set out in your payment schedule.
So:
- Be specific and detailed.
- Attach supporting evidence if available.
- Identify relevant contract clauses.
- Address each claim item-by-item.
Avoid lazy justifications like “under assessment” or “on account”. These are not real reasons and adjudicators routinely disregard them. If a claim is not agreed, say why. For example: “Variation X not approved because no written instruction received, work was always part of the scope (refer item Y of the PPR) and no claim received in time (refer clause Z).”
Remember: you have twice as long to prepare a payment schedule as you do an adjudication response.
Prepare as if adjudication is inevitable
Look for signs that a claimant is preparing to adjudicate. These include:
- Resubmitting previously rejected items;
- Making unexpected format changes to their payment claims;
- Increased insistence on disputed variations.
If you suspect an adjudication is coming, begin collating your evidence early. Don’t wait until the application is served. You’ll only have 5 business days to respond, and that’s barely enough time to read the material, let alone reply meaningfully.
Focus on the big-ticket items
Time and resources are limited. Focus your efforts on the highest-value disputed items. Adjudicators are more likely to scrutinise large dollar claims carefully. A convincing rejection of a major claim can shift the outcome, even if smaller claims are conceded or less well defended.
Keep your records in order
Contract administration is not just a claimant’s game. Good record-keeping helps you rebut inflated claims. You should have at hand:
- Site instructions and directions;
- Records of work performed;
- Defect notices and rectification records;
- Photographic evidence;
- Correspondence rejecting variations.
This documentation supports your reasons for non-payment and helps your legal team quickly assemble a compelling response.
Final Thoughts
Adjudication is a valuable tool in the NSW construction industry, but it favours the prepared. If you want to use it successfully – or defend yourself effectively – you must invest time upfront. Know the Act, train your teams, and build a process for payment claims and schedules that complies with SOPA and supports adjudication readiness.
The best adjudication outcomes happen before the application is ever filed. By preparing early, you take control of the process, reduce your risks, and increase the likelihood of being paid fairly and promptly. As the saying goes: prepare now or pay later.
