BCIPA Reforms:  The Two-Tiered System of Claims

Adjudication in Queensland is undergoing a period of transition.  The Wallace Report recommended changes to the current system and the revised legislation is currently being drafted with a proposed implementation date of 1 September 2014.  The changes are intended to create a more transparent adjudication system, and to this end there are several important adjustments in the pipeline.  These include:

  • The abolition of Authorised Nominating Authorities and the creation of an adjudication registry within the QBCC;
  • Ability for claimants to withdraw an application;
  • Longer timeframes for responding to more complex claims;
  • Shorter timeframes in which to serve a payment claim (6 months from when work was last carried out);
  • Ability for respondent to include reasons for withholding payment in the adjudication response, whether these have been raised in the payment schedule or not; and
  • The distinction between ‘standard’ and ‘complex’ claims.

This paper discusses this final bullet point.

Although the amendments are still being drafted and we are yet to see the final version, the distinction between ‘standard’ claims’ and ‘complex’ makes sense; there are genuine and understandable reasons for making this distinction.  First and foremost, not all adjudicators have the same background or experience.  The more experienced are more suited to larger and complex claims, while the newly initiated, whilst still classed as ‘competent’, may need to cut their teeth on some less complex decisions.  There are plans to ‘grade’ adjudicators. Presumably the grading will determine which type of application is referred to which adjudicator.

It is unclear at this stage how descriptive the legislation will be, but there have been suggestions that a ‘complex’ claim will be defined as those:

  1. Containing latent conditions, and/or
  2. Containing time related costs, and/or
  3. With a value in excess of $750,000.

Presumably, standard claims are everything else.

Should the value matter?  Whether it is a $1,000 application or a $1m application, it shouldn’t make any difference to the facts and principles of law.  Yes, the documentation involved in a larger value claim may take a bit more time to work through, and consequently the adjudicator would be expected to take longer to come to a decision. But the value doesn’t in itself make a matter inherently technically complex.

Latent conditions and time related claims are areas that would require an adjudicator to have some degree of technical, commercial or contractual knowledge and the grading of adjudicators, as a minimum, has to address these areas.

We can predict a number of problems arising from a two-tiered system.  Who would define the claim as being ‘complex’ or ‘standard’?  Is it the claimant, the respondent, the registry or the adjudicator?  What is a time-related claim?  Would a subcontractor who contracts on the basis of an hourly rate be considered to have submitted a time-related claim?  What would the consequences be for nominating a standard claim when it is subsequently found out to be a complex claim?

The answers will become clear when the revised legislation is published and in the meantime we can only guess.  One thing for sure is that there is going to be a period when adjudicators’ decisions are increasingly challenged before the courts.

Frazer Beggs – Regional Director

Should you require any adjudication advice, whether for the preparation of an application or a response, please contact the team of specialists at Contract Solutions International.