Analysis of adjudication determinations made under security of payment legislation in New South Wales

Uher, Thomas; Brand, Michael C.

doi:10.1016/j.ijproman.2005.05.002

Cited by 17 publications

(12 citation statements)

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“…This is expected as the NSW Act is the first law in Australian East Coast Model. Uher and Brand (2005) examined the trends in adjudication determinations in NSW, in particular, the pattern of payment claims, the level of compliance of respondents, the degree of success in an adjudication, the trends in adjudication fees, etc. A similar follow-up study was conducted later (Brand and Uher, 2010).…”

Section: Ecam 221mentioning

confidence: 99%

Statutory adjudication in Western Australia: adjudicators’ views

Yung

Rafferty²

2015

Engineering, Construction and Architectural Management

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2015),"Risk management implementation in small and medium enterprises in the UK construction industry", Engineering, Construction and Architectural Management, Vol. 22 Iss 1 pp. 91-107 http:// dx.Access to this document was granted through an Emerald subscription provided by emeraldsrm:333301 [] For AuthorsIf you would like to write for this, or any other Emerald publication, then please use our Emerald for Authors service information about how to choose which publication to write for and submission guidelines are available for all. Please visit www.emeraldinsight.com/authors for more information. About Emerald www.emeraldinsight.comEmerald is a global publisher linking research and practice to the benefit of society. The company manages a portfolio of more than 290 journals and over 2,350 books and book series volumes, as well as providing an extensive range of online products and additional customer resources and services.Emerald is both COUNTER 4 and TRANSFER compliant. The organization is a partner of the Committee on Publication Ethics (COPE) and also works with Portico and the LOCKSS initiative for digital archive preservation. AbstractPurpose -The purpose of this paper is to evaluate the effectiveness of the statutory adjudication legislation in Western Australia against its stated aims. Design/methodology/approach -The four objectives of the Western Australia Construction Contracts Act 2004 were identified. For each objective a number of criteria has been devised. In total, 22 registered adjudicators were interviewed, representing 28 per cent of all adjudicators in Western Australia. The interviewees were divided into two groups, one with legal background (being both lawyer and adjudicator), the other without (construction professionals). They were asked to evaluate the criteria against a five-point Likert scale in addition to open ended comments. Mann-Whitney U tests were used to examine whether there were significant differences between the two groups. Annual reports of Building Commissioner, database of the WA State Administrative Tribunal and some law cases were also referred to. Findings -It is found that the West Coast Model is fair to both parties, the adjudications are generally completed speedily according to the prescribed timeframe, and they have been conducted in various levels of formalities. Adjudications are very cost effective for larger claims. However, they are not so for smaller claims. The increasing uptake rate shows that adjudication is getting more popular, while the low appeal rate shows that decisions on dismissal are fair.Research limitations/implications -The adjudicators' opinions are only part of the overall picture and that more research on this topic needs to be done. Originality/value -There have been two distinct legislative models in Australia, commonly known as East Coast Model and West Coast Model. A number of authors have called for a national dual model incorporating both current models. However, it might be too early to discuss the national dual model when there have...

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Section: Ecam 221mentioning

confidence: 99%

Statutory adjudication in Western Australia: adjudicators’ views

Yung

Rafferty²

2015

Engineering, Construction and Architectural Management

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“…Despite the fact that the quantum of claims made by subcontractors against contractors is similar to those made by contractors against owners (Uher and Brand, 2005), subcontractors are often subjected to unclear contract payment terms. Standard forms of conditions of contract, which usually state when payments are due, are not always used for subcontracts.…”

Section: Introductionmentioning

confidence: 99%

“…Standard forms of conditions of contract, which usually state when payments are due, are not always used for subcontracts. Also, the interest rate which applies for the unpaid portion of a claim is less frequently stated in subcontracts than in head contracts (Uher and Brand, 2005).…”

Section: Introductionmentioning

confidence: 99%

The likelihood of subcontractor payment

Tran

Carmichael

2012

Journal of Financial Management of Property and Construction

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PurposeSubcontractor payments typically come through the contractor, though there can be exceptions to this, and their timing and quantum can be affected by the upstream payment practices of the owner to the contractor, as well as the payment practices of the contractor. The purpose of this paper is to study the linked effect of late and incomplete payments of both the owner and contractor on what the subcontractor receives.Design/methodology/approachThe paper's analysis develops on an existing Markov chain formulation of owner payments. The probability of getting payment from an owner or contractor is represented as a function of time since claim submission. Such functions are established through goodness of fit tests using actual project data. The downstream progression of payment from owner to contractor to subcontractor is treated as a collection of series and parallel systems, for which the likelihood of payment is assessed.FindingsA model that enables subcontractors to calculate the likelihood of getting their claims paid, based on owner and contractor historical payment practices, is developed. Subcontractors are able to calculate the conditional and unconditional probabilities of their claims being paid at any time after claim submission. The model may be used with historical payment records, or with identified typical owner and contractor payment types.Practical implicationsThe paper presents a practical method by which a subcontractor is able to calculate age‐dependent probabilities of outstanding claim amounts being paid. Such information feeds into the subcontractor's tendering practices before entering a new project, and in the subcontractor's contract administration practices in terms of pursuing claims.Originality/valueThe modelling of the owner‐contractor‐subcontractor payment linkage is original. No similar modelling exists in the literature.

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“…Frequent payment delays could lead to additional financing and transaction costs and eventually place parties down the chain in insolvency situations (Euginie, 2006).Conversely, prompt payment for completed work could be seen as a strong incentive to contractors and subcontractors to deliver quality services and to complete projects successfully (Cheng, et al, 2008).Timely and precise payment helps to develop trust and collaborative working, thereby achieving value for money for construction clients (Office of Government Commerce, 2007). Unfortunately deferment and delay of invoices are often deliberate, as deferred payment is used as a project funding mechanism by the upper tiers in a contract (Uher and Brand, 2005;Odeyinka et al, 2003).…”

Section: Introductionmentioning

confidence: 99%

The Nature of Payment Problems in the New Zealand Construction Industry

Ramachandra

Rotimi

2011

CEB

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Delay and loss of payment is a serious problem in the construction industry of many countries. These affect the cash flow of contractors which is critical to meeting their financial obligations. Payment defaults by the principal leads to insolvency of contractors and in turn other parts of the project chain. In recognition of some of these problems, most countries have established payment-specific construction industry legislation and other contractual measures to mitigate the problems, but nevertheless the problem persists. In this context, the paper examines the nature of payment problems in the construction industry in New Zealand. It is part of a larger study, that seeks solutions to payment losses in the construction industry.The study uses two approaches; an analysis of liquidators’ reports, and an analysis of court cases involving payment disputes to determine the magnitude of payment problems on construction parties. The findings are presented using simple descriptive and interpretive analyses. The study finds that trade creditors are impacted negatively (payment delays and losses) by the liquidation of property developers, general construction and construction trade companies. 75% of trade creditors are unable to be paid fully by these categories of construction companies after liquidation proceedings. Liquidation proceedings take an average 18 months before they are finalised. The analysis of court cases found that 80% of payment disputes are between principals and contractors; with considerably significant percentage of disputes resulting in outright loss of payments. Only 40% of the cases are successful, in which case claimants are able to fully recover the amount in dispute. Payment losses are more prevalent in liquidation than delays and unlike in legal disputes, there is no security for those losses. The study finds that construction parties use remedies contained in the security of payment provisions within standard conditions of contract, and legislative documents.

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Analysis of adjudication determinations made under security of payment legislation in New South Wales

Cited by 17 publications

References 0 publications

Statutory adjudication in Western Australia: adjudicators’ views

Statutory adjudication in Western Australia: adjudicators’ views

The likelihood of subcontractor payment

The Nature of Payment Problems in the New Zealand Construction Industry

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