By Elise Teitler, Managing Director Construction Adjudication, ODACC and CanDACC
Special to Ontario Construction Report
As I write to you today, amendments to Ontario’s Construction Act, R.S.O. c. C.30 are poised to continue to shape the construction industry landscape. The amendments received Royal Assent on November 6, 2024, but have not yet been proclaimed in force, and the regulations providing more detail and specificity are currently being drafted by the Ontario government. While the regulations are being finalized and before the legislation comes into effect, now is a good time to reflect on the changes to the Construction Act, that came into force on Oct. 1, 2019, providing for Prompt Payment and Adjudication.
Ontario was the first province in Canada to adopt Prompt Payment and establish Adjudication as a forum to resolve construction-related disputes quickly, efficiently, and cost-effectively. Adjudications in Ontario are operated through ODACC (Ontario Dispute Adjudication for Construction Contracts). In December 2023 CanDACC (Canada Dispute Adjudication for Construction Contracts) was established as the Adjudicator Authority for federal projects under the Federal Prompt Payment for Construction Work Act S.C. 2019, c. 29, s. 387 (the “Federal Act”).
Other provinces have since followed suit, with varying degrees of similarity and differences in their own legislation. Provinces like Saskatchewan, Alberta, and Quebec (through its pilot project) have also implemented legislation, while other provinces are either in the process of drafting legislation, working on regulations or consulting with industry stakeholders to adopt comparable frameworks.
Why Should You Consider Adjudicating Your Dispute?
As a former litigator and negotiator of many commercial disputes I can say with confidence that Adjudication simply makes sense. Adjudication provides a mechanism where parties can obtain a written, binding, and enforceable decision (known as a Determination) in Ontario within 35 to 45 days of initiating the process by filing a Notice of Adjudication under the Construction Act and within 49 to 59 days after the filing of a Notice of Adjudication under the Federal Act (unless all parties agree to an extension). The Determination is rendered by a certified Adjudicator who is a professional with at least 10 years of construction-related experience (many have more than the 10 years’ experience).
Having witnessed the evolution of Adjudication in Ontario I firmly believe this dispute resolution process will continue to expand. I no longer refer to Adjudication as an “alternative” dispute resolution process (ADR), because it is rapidly becoming the primary forum for dispute resolution in the construction industry.
Why? Because it works, for several key reasons:
- Quick and Enforceable Determination: Adjudication delivers fast, binding, and enforceable Determinations making it the ideal solution for construction disputes. The Determination of the Adjudicator is rendered within 30 days after the Claimant submits their documents under the Construction Act and 20 days after the Respondent files their documents under the Federal Act (unless the parties agree to an extension) ensuring that Adjudications are resolved quickly. The Determination may be filed with the court for enforcement.
- Construction Expertise of Adjudicators: The Determination is made by an Adjudicator with a minimum of 10 years of construction related experience (many of whom have additional years of experience and multiple professional designations).
- Litigation and Arbitration are lengthy and costly: With court systems often backlogged, spending years in litigation is not practical for resolving construction disputes efficiently. Finding an arbitrator with the necessary construction expertise and availability within a reasonable time frame can also be challenging. Adjudication, by contrast, is a more cost-effective and quicker alternative.
Current Trends in Ontario under the Construction Act
The uptake of Adjudication in Ontario has steadily increased each year since ODACC’s inception. Key trends include:
- Growth in the number of Adjudications: More disputes are being referred to Adjudication each year.
- Repeat use of Adjudication: Parties are increasingly using Adjudication multiple times on the same construction project.
- Increased Use by Subcontractors: Subcontractors are bringing their disputes to Adjudication at a greater rate.
- Larger Dispute Amounts: The value of disputes being resolved through Adjudication is on the rise.
- Consolidation of Disputes: There is a growing trend of consolidating Adjudications (joining two or more Adjudications into one Adjudication) where different parties involved in the same construction project consolidate their claims, ensuring a comprehensive resolution for all parties in the construction chain.
- Settlements During the Adjudication Process: A growing number of cases are being resolved before a final Determination of the Adjudicator is made, with parties reaching settlement “at the table.”
I am confident that the use of Adjudication will continue to grow in Ontario, and look forward to seeing Adjudication used for federal disputes across Canada.
To learn more please visit our websites and email us with any questions at:
ODACC (email: au*******@od***.ca) or CanDACC (email: au*******@ca*****.ca)