Ontario’s new Construction Act adjudication authority has seen just 60 case files so far but already definite trends have emerged, adjudicator Matt Ainley told an online audience of construction lawyers recently.
For example, lawyers had better write short, succinct briefs that stand on their own because there might not be any oral statements; the process is so quick that firms had better have their facts well documented and documents ready to submit; and “bully” behaviour won’t be supported.
“If you’re sort of the bully in the contract, and it doesn’t really matter where you are in the supply chain, if your position is not a sound position, you’re going to lose an adjudication,” Ainsley stated.
Ainsley, a quantity surveyor with 29 years’ experience in the construction sector, was invited by WeirFoulds to discuss the first 18 months of Ontario’s prompt payment and adjudication system.
The law firm is hosting six sessions this spring covering topical Ontario legal themes with the adjudication webinar kicking off the series April 1.
Ainsley is one of 65 adjudicators on the roster of Ontario Dispute Adjudication for Construction Contracts (ODACC), the Authorized Nominating Authority tasked with adjudicating disputes under the Construction Act.
Of the 60 adjudications filed with the ODACC since the new regime began Oct. 1, 2019, there have been 23 determinations made; 32 disputes from residential and 28 from ICI; 30 to 35 adjudications settled before determinations; and only four determinations involved an oral hearing.
Ainsley offered the following lessons learned so far:
- Adjudications tend to force the parties to start talking. That’s the takeaway from the number of settlements, Ainsley said. “An adjudication was submitted but the parties started to talk — one of the parties obviously wasn’t talking. We started the talk, and they negotiated a deal and they withdrew the adjudication. So that’s a trend that we’re seeing, it seems to be a fairly strong trend.”
- Expect to see ICI cases involving larger disputes and a greater number of residential cases concerning smaller amounts. “It’s about 50:50 between ICI and residential at this time and we’ll probably see way more numbers of adjudications in the residential side going forward, but their values will be smaller. And the larger values to date have tended to be on the commercial side of the equation.”
There has been one case involving a dispute over a job as small as a bathroom renovation.
- Where are the trades and subcontractors? So far all disputes have been between owners and general contractors, Ainsley noted, with trades possibly taking their traditional approach of waiting until later in the process aiming to rely on a lien.
“The act is trying to get people to deal with their issues as they occur and that’s a big, big cultural change,” he said. “Don’t let issues pile up, sit down and talk to people…one of the alternatives to lien is adjudication and you can do it on a very small issue that brings people to the table.”
- Adjudication is not a court process and adjudicators are aiming for swift justice. An adjudicator is an inquisitor, Ainsley said, and they can proceed as they see fit under the act.
“You’re not likely going to get an oral hearing, which means you better be succinct and to the point with your submission, and if you think you’re going to hand over half a dozen banker boxes filled with documents that your project manager slapped together for you…you’re going to be very surprised. The adjudicator is going to come back to you and likely say, ‘I’ll give you 25 pages single spaced…I will read eight specific documents or 10 specific documents that you think are pertinent to the point you’re trying to make.’”
- Construction firms and their lawyers should get prepared in advance of their first adjudication. There are only days to decide on an adjudicator once notice is served, Ainsley said, so firms should be proactive and browse the ODACC roster ahead of time. And the ODACC dictates the forms and paperwork that will be used so potential adjudication participants should familiarize themselves with the ODACC website because there won’t be much time once an adjudication is filed.
- Expect to see fewer court cases as the sector becomes familiar with the system. In England, Ainsley said, where adjudication has been in effect for 25 years, there were 16 courts working two shifts a day on just construction disputes around 1995. Now they have three courts working a single shift.
“Most people have…one or two adjudications early on and then they start working at their problems, because they realize it’s much better for the relationship. So, there’s been an incredible cultural change in England.”
Follow the author on Twitter @DonWall_DCN.