Below is a comprehensive summary of the process from start to finish, followed by an outline of the details in each step.
First, confirm your situation is eligible for adjudication here.
Summary
As of March 1, 2022, contractors will have the right to expect payment within 28 days of filing a proper invoice. Undisputed portions of an invoice can no longer have payment withheld while disputed portions are adjudicated – it is the law for clients to pay their contractors, and contractors their subcontractors, in a timely manner.
If there is a dispute about payment, a fast-moving adjudication process must be initiated to resolve the dispute and provide enforceable judgement. This is initiated by sending the appropriate form to one of our certified Adjudicators (form and Adjudicator directory available here) and paying a non-refundable filing fee. From here, the details of the dispute must be outlined, including specific amounts withheld, Parties must be notified, and the Adjudicator can begin the process.
In the case that a contractor still has not been paid after a favourable judgement, they can walk off the job, cannot be replaced on the job site, and their demobilization and remobilization costs would be the responsibility of the party owing the money.
Payment Cycle
- Legally, the clock starts with the submission of a “proper invoice” from the prime contractor to the client.
- Proper invoices cannot be contingent on prior certification by the client or their consultant.
- Proper invoices will be required monthly, unless otherwise stipulated in the contract.
- An owner has 14 days to issue a notice of non-payment in dispute of any portion of the proper invoice.
- Notice of non-payment forms can be found here.
- Documentation outlining the reason and value of the disputed portion is required.
- The balance of the proper invoice remains due within the 28 days.
- The prime contractor has seven days from receiving payment to pay all their sub-contractors in proportion to their invoices included in the proper invoice.
- If the work of a sub-contractor is disputed, their payment will be limited proportionally.
- If the prime contractor has not been paid 28 days after proper invoice, they must file for adjudication (outlined in section 21.22(1) of the Prompt Payment legislation here) or issue payment to their subs.
- Please note that there is a mandatory and non-refundable filing fee to initiate a formal adjudication process. Details on fees are outlined here.
Interest on Overdue Payments
- Interest begins to accrue the moment a proper invoice is due but not paid or disputed.
- Interest will be the greater of pre-judgment interest or that specified in the prime contract.
- Interest is not charged on interest.
Dispute Resolution
- The legislation lays out a clear, fast-acting dispute mechanism that hastens resolutions ahead of court actions.
- The model prescribes binding adjudication on a strict timetable using third-party adjudicators.
- The cost of adjudication is borne equally by both parties to the adjudication – unless ruled otherwise (see section 21.61 of the Prompt Payment legislation here)
Dispute Timelines
- Parties have four days to agree to an adjudicator (select from the Adjudicator directory here). If Parties cannot agree, the Claimant must request the Authority to appoint an adjudicator and they have seven days from the date of request to appoint.
- Within five days of appointment, an adjudicator must be provided with all documentation from all parties.
- An adjudicator has 30 days from receiving documentation to issue a ruling.
- The period can be extended for 14 days on the agreement from the parties.
- Adjudicators have broad discretion and rulings are binding, with the strength of a court order.
- Applications for judicial review of an adjudication must be made within 30 days of ruling (see section 21.62(1) of the Prompt Payment legislation here.)
- Applications for judicial review can be dismissed without cause.
- The situations in which an adjudication will be set aside by judicial review are very limited and tightly prescribed – as outlined in section 21.62(1) of the Prompt Payment legislation here.
- Any party owing on an adjudicated outcome has 10 days to pay in full.
- If enforcement by the Court is necessary, this must take place within two years of the determination (see section 21.71(1) of the Prompt Payment legislation here)
Suspension of Work
- If an adjudicated amount is not paid in full within 10 days, a contractor has the right to suspend work.
- Contractors are also entitled to reasonable costs associated with suspending work, the resumption of work, and interest throughout.
- If a contractor suspends work, they cannot be replaced on the job site without agreeing to a settlement.