Under the previous regime, adjudication tended to play a relatively limited role, largely because the legislation excluded key categories of claims from the process; most notably variations, delay costs, and latent conditions.
As of 15 April 2026, those exclusions have been removed. Claimants can now include the full range of contractual entitlements in a payment claim, and adjudicators are required to determine disputes that are broader in scope and more commercially significant than before. We cover this in our previous article on payment claims.
This shift is already changing how disputes are managed. Matters that might previously have proceeded to court or arbitration can now be directed into adjudication, increasing both its relevance and its use across Victorian projects. Adjudication now sits as a central feature of payment dispute resolution, rather than a limited or secondary option. This means paying careful attention to the preparation of payment schedules.
Payment Schedules Now Define The Dispute
The reforms have fundamentally altered the relationship between payment schedules and adjudication. Respondents must now include all reasons for withholding payment in the payment schedule itself, without any ability to introduce new arguments later in an adjudication response.
This change reshapes how adjudication in Victoria unfolds. The dispute is effectively confined to the payment claim and the payment schedule, and adjudicators determine the matter by reference to those documents rather than a broader exchange of submissions developed over time.
For respondents, this increases the importance of the payment schedule. It no longer operates as a preliminary response but instead defines the defence in any subsequent adjudication. For claimants, the change narrows the scope for late-stage arguments and creates a more predictable and focused process.
Adjudicators Now Determine More Substantive Disputes
With the removal of restrictions on claimable amounts, adjudicators are now required to deal with disputes that extend well beyond straightforward valuation issues. They must assess a broader mix of claims, including variations, delay and disruption costs, latent conditions, and competing contractual entitlements.
The process now more closely resembles regimes in Queensland and New South Wales, where adjudicators routinely engage with complex contractual issues. As a result, adjudication determinations are addressing a wider range of issues and are likely to carry greater practical influence over how disputes ultimately resolve, even though they remain interim in nature.
Time Bars Now Subject To A Statutory Fairness Test
The introduction of a statutory “fairness test” for notice-based time bars has added a new dimension to adjudication. A time bar may now be declared unfair where it is not reasonably possible to comply with, or where compliance would be unreasonably onerous, and adjudicators have the power to make that determination.
This represents a clear departure from the previous position, where strict compliance with time bars often provided a reliable defence. That position is now less certain, as respondents may not be able to rely on time bars to defeat claims in the same way.
Adjudicators can now proceed to consider the merits of claims that would previously have been excluded for non-compliance with notice requirements. This introduces a level of discretion into adjudication and shifts the focus toward the substance of the parties’ positions rather than strict procedural compliance.
Performance Security Disputes Now Sit Within Adjudication
The new statutory right to claim the release of performance security has introduced an additional layer to the adjudication regime. Parties can now bring disputes concerning retention and bank guarantees within the same structured framework as payment claims.
A claimant may serve a performance security claim, which requires a formal response in the form of a performance security schedule. If the respondent provides an inadequate response or fails to respond, the claimant can refer the dispute to adjudication.
This development expands the scope of adjudication by bringing disputes that were traditionally managed through contractual mechanisms or court proceedings into the statutory regime. As with payment claims, respondents are confined to the reasons set out in their schedule, and any failure to respond within time may result in immediate liability to release the security.
Compliance And Timing Now Carry Greater Weight
Although the structure of adjudication remains familiar, the current regime places a much stronger emphasis on strict compliance with statutory timeframes. Respondents must serve payment schedules within tight deadlines, and any failure to do so may expose them to liability for the full claimed amount, regardless of merit.
The legislation also regulates payment timing more closely by introducing default payment periods where contracts are silent, imposing limits on maximum payment terms, and clarifying how early claims and the Christmas shutdown period affect time calculations.
These requirements flow directly into adjudication. Missed deadlines, incomplete schedules, or non-compliant processes now have immediate consequences. The system rewards disciplined contract administration and exposes parties who fail to respond promptly or comprehensively.
Adjudication Now Sits At The Centre Of Payment Disputes
Taken together, these reforms have shifted adjudication into a far more prominent role within the Victorian construction landscape. The regime now accommodates a broader range of claims, requires parties to define their positions at an early stage, allows adjudicators to assess the fairness of contractual provisions, and introduces new categories of disputes into the process.
For contractors and subcontractors, this provides a more effective pathway to recover payment quickly. For principals and head contractors, it increases exposure, as payment claims carry greater weight and adjudication becomes more difficult to defend without careful preparation and disciplined responses.
Preparing Under The New Regime
With the reforms now in force, construction businesses should ensure their contracts and internal processes align with the current regime. This includes reviewing contract templates, particularly payment and notice provisions, strengthening internal processes for issuing and responding to payment claims, and treating every payment schedule as a document that will likely be scrutinised in adjudication.
Adjudication now sits at the centre of payment disputes in Victoria. Businesses that adapt their systems and practices accordingly will be better positioned to manage risk and respond effectively as claims arise.
If you would like assistance reviewing your contracts, updating your processes, or training your team to operate under the new regime, our team can work with you to ensure you remain compliant and well-positioned in this evolving landscape.
