Construction adjudication is a statutory dispute-resolution mechanism introduced as the enforcement arm of prompt payment legislation. When a payer disputes a proper invoice, the unpaid party can refer the dispute to an authorized adjudicator who issues a binding determination, typically within 30 days of the document submissions. The decision is binding on an interim basis, meaning the payment must be made or held according to the adjudicator's ruling, but either party can still litigate or arbitrate the underlying dispute later. In Ontario, adjudication is administered by the Ontario Dispute Adjudication Centre for Construction (ODACC). Other provinces with prompt payment (SK, AB, NB, MB) have their own authorized nominating authorities. Adjudication is significantly faster and cheaper than courts and is designed for routine payment disagreements, not complex multi-issue construction litigation.
Why it matters to Canadian contractors
- Adjudication finally gives subcontractors a tool to force payment on disputed invoices without waiting years for trial. Before prompt payment, the only option was court, where the time and cost usually exceeded the amount owed.
- The decision is enforceable in court as if it were a court order. If the payer refuses to pay after losing, you can register the decision and pursue enforcement against assets.
- Adjudicator fees are typically split, but the losing party often bears costs. A typical residential or small commercial adjudication costs $1,500 to $5,000 per side.
- The Ontario Construction Act gives the unpaid party 45 days from the date the dispute arose to commence adjudication. Wait too long and you lose the right.
Common mistakes and pitfalls
- Adjudication only resolves payment disputes that fall within the statutory definition. Defects, delay claims, and contract interpretation may or may not be eligible depending on the province.
- The interim-binding nature means a determination can be overturned later in litigation. Do not treat adjudication as the final word for high-value disputes.
- ODACC and equivalent bodies require strict documentation. Build the file as you go: daily logs, photos, contract notices, and emails are what adjudicators rely on.
- Each side typically has only 5 to 10 days to submit their reply documents once the process starts. There is no time for new evidence gathering after the clock starts.
- Adjudication only works against the party in direct contract with you. A subcontractor cannot adjudicate directly against the owner, only against the GC. The GC then has to recover from the owner through their own adjudication.
Related
- Glossary: ODACC→
- Glossary: Prompt payment→
- Glossary: Notice of non-payment→
- Ontario Construction Act guide→
This glossary entry is for general information only and does not constitute legal or tax advice. Canadian tax and construction law rules vary by province and contract. For advice specific to your situation, consult a licensed professional.