Very few building projects are free of niggles and disputes and differences of various kinds and degrees. This is hardly surprising when you think about working and sometimes living with strangers for weeks or months on end, and at a time when on top of a fair dose of the usual daily hassles that life throws your way, you also have to put up with the added financial pressure and the inconvenience, noise, nuisance, mess and stress of having work undertaken in or about your family home, or indeed, a family living in the middle of your worksite if you are a contractor.
If those disputes are not addressed and resolved promptly they can become hugely destructive of one’s life, time consuming, and hugely expensive to sort out – and regrettably that is exactly what happens more often than not!
There are many reasons why simple matters that subsequently give rise to major and costly disputes and differences are not raised or debated when they are first noticed and at a time when they could so easily and cheaply be resolved. Most common amongst those reasons is that one side does not want to offend the other. The real shame is that the longer the matter is left, and the more matters in difference that there are, the bigger the mess, stress and the cost, and the greater the offence that will be taken as a result – absolutely nothing is gained, and in fact much is lost, by delaying the resolution of these matters.
Because the Scheme requires parties to notify BuildSafe
when a dispute arises so that BuildSafe may, as agent for the claimant, secure the immediate appointment of an adjudicator, through the Building Disputes Tribunal
, parties are relieved of any sense of unease or guilt around whether or not to initiate an adjudication because they are required do so as a matter of procedure under the contract.
Accordingly, the dispute will be resolved promptly and cost effectively leaving the parties free to get on with the job. However, it is really worth noting that in practice, most disputes are settled quickly and amicably by the parties directly as soon as the prospect of adjudication and a third party decision maker is raised, and without any need for an adjudicator to be involved.
WHAT IS ADJUDICATION?
Adjudication is a statutory process (that is to say a process that is governed by an Act of Parliament – the Construction Contracts Act 2002). The process is unique to the building and construction industry and it is designed to provide for the speedy resolution of disputes arising under a construction contract.
BuildSafe has worked closely with the Building Disputes Tribunal
to design and develop a specialist fast track adjudication process to deal with disputes in relation to whether or not Practical Completion and/or Completion has been achieved. These disputes are the most likely disputes to occur and to affect the timing for payment and distribution of the Security Amount. However, this unique fast track adjudication process provides for an adjudicator’s determination to be made within a few weeks and at minimal cost to the parties. In most cases the cost of adjudication is shared equally by the parties.
Because the parties to the Scheme will have formal written conditions of contract that clearly record the parties’ rights and obligations under the relevant construction contract and a fair payment regime, the disputes that most commonly occur in relation to residential building projects will be avoided because the parties’ bargain is clearly set out from the outset with little room for dispute.
Building Disputes Tribunal is recognised and respected as the leading independent, nationwide provider of specialist dispute resolution services for the building and construction industry in New Zealand and is approved by the Minister of Building and Housing as an Authorised Nominating Authority for the purpose of nominating adjudicators under the Construction Contracts Act 2002.
Visit Building Disputes Tribunal’s comprehensive Website
to learn more about dispute resolution, the Construction Contracts Act, and the regimes for making and responding to payment claims and adjudication under the Act.
By registering with the BuildSafe Security of Payment Scheme, you can be assured that any dispute that may arise will be resolved fairly, promptly and cost effectively. With written formal contract documentation and a fair payment regime the chances of a dispute arising are vastly reduced, but access to fair, prompt and cost effective dispute resolution is absolutely essential to ensure that any disputes that do arise are resolved promptly, that cashflow is maintained, and proper entitlements to contract funding are assured and maintained.
More information about adjudication and other dispute resolution methods can be found on the Building Disputes Tribunal Website www.buildingdisputestribunal.co.nz.