Adjudication construction disputes: New strategies for success

Sahil: Good afternoon, everyone and welcome. I'm Sahil Shoor. I'm a lawyer practicing construction law based out Waterloo Region office. Thank you for joining us today and hope everyone is staying safe and doing well. We have a very busy agenda and the topics that we want to speak you about on our third annual Adjudication Workshop today. I have my colleagues from pretty much every single office in Ontario here with me and are looking forward to connect with you. We understand that we have over 300 people signed up from all across the country to participate in this webinar. I do see the numbers increasing as I'm speaking to you on my screen. So we'll give ... joining in. I welcome you to use the Q&A button which you will see on your screen. Me and my colleagues, we will be monitoring the Q&A section as the presentations are going on and we will respond to the questions after posed to us. We also have set aside some time at the end, that if you have specific questions which cannot wait until the very end, please use the time as the presentation is going on to use those questions. We're looking forward to connecting with you and introducing my colleagues to you. Another minute and we will get started. Shannon, can I get the next slide, please?

As we are waiting on folks to join, and I continue to see that participants number increase, just a couple of disclaimers. The presentation today is not intended as legal advice. We are going to be providing you with a very high level overview and summary of the adjudication process to update from the old ODACC and other things and the lessons which we have learned from the adjudications which we have been part of. So this is not intended as legal advice. Please contact a qualified legal counsel who understands adjudication, who practices construction law, because ... situations are very, very specific and we want to ensure that the takeaways from today's presentation is not taken as legal advice. Shannon, next slide, please.

So here's our agenda today. We will kick off with Neil Abbott, my colleague in Toronto to walk us through a summary of the adjudication rules and processes. We will then come to Waterloo and Jacqueline Armstrong Gates, my colleague, will talk to you about the summary of the update which came from ODACC. We will then go to Ottawa and Patrick and Karina will walk us through the lessons which we have learned from the adjudications which we have been part of since adjudication became live in October of 2019. We will then go to Toronto and Ted Betts and Chris Stanek will talk to you about adjudication contract drafting and then Ted will also give you a quick update on where things are at with respect to Alberta's Bill 37 and adjudication laws which are coming all across the country. Then we will finish the session by questions and conclusions. Again, please use the Q&A button and ask questions as we go through this presentation. We're pretty close to the number of people that signed up so, Neil, I'll give it over to you to walk us through the summary of adjudication rules and processes. Thank you.

Neil: Okay, great. Hello, everyone. I'm a floating head, as we all are today, and we appreciate you coming to us from your living rooms, offices and wherever else. As Sahil mentioned if you have any questions please jump in. We'll monitor the screen to do that. I'm a partner at Gowlings. I practice primarily in the Toronto office although I've been called to the Bar in BC and sometimes in Nunavut. As primarily a dispute resolution lawyer, both mediation, arbitration and adjudication, and I've taken the program, the adjudication course, with ODACC but I've not registered as a formal adjudicator. Too many conflicts, quite frankly, but I'm familiar with the ins and outs of the process. What Sahil has put up on the screen is the timeline for adjudication so we'll have that in the background. I wanted to just talk about some of the important aspects of the adjudication, statutory provisions that you may have either glossed over or perhaps they need to be highlighted. Because we haven't had a lot of adjudications, and to my knowledge no court reviews of adjudications, some of these are interpreted from first principles. As some of you know, section 13.1 of the Construction Act is the section that defines all the rules around adjudication. In fact the section itself refers to interim adjudication. So the first thing I'll point out is adjudication is designed to be interim. My view is that's basically a nod to the fact that while it is interim in law, in fact, it's final. So the interim nature of adjudication is keeping with the theme of adjudication which is to allow the parties to resolve their disputes early on and to live with the consequences. As adjudication was brought in primarily because there was so many festering small disputes in the construction project that a lot of sub subcontractors, etcetera, were being held hostage for payment while the larger disputes were going on and ultimately the recourse for them was through the courts or being stuck as a tail on a large dog in major litigation. So adjudication was designed to take some of the steam out of the construction dispute process to allow for early decisions, and given the nature of adjudication and how fast and quote/unquote dirty it is, the real impact is that you're supposed to live with it and move on. But it is called interim. So to that end you can appeal a decision of the adjudicator. You have to do it to the Divisional Court. You need leave and the court is limited to what it can review. It's actually principles of justice. That the party was under legal incapacity. Interesting, subsection (2), this is 13.15(2), says the contract did not exist or is finished, I think is the word or something to that effect. That's interesting. I'll get to that in a minute when we talk about availability in the adjudication. Of course, there was bias or the issues the adjudicator ruled on were not properly put to the adjudicator, etcetera, but I think essentially the Divisional Court is not going to be a, what I'll call a fulsome appeal court, where you start and you argue the case all over again. They're going to be looking at did the adjudicator or the parties engage in some behaviour that was in appropriate. But really it's not designed to be a full review of the decision. So effectively adjudication is, in my expectation, final.

I'd like to talk about section 13.5 which is availability of adjudication. Adjudication's available for disputes regarding valuation, payment, notices of non-payment issues that were raise and, interestingly, sub (3) says that you cannot conduct an adjudication after the contract is complete or unless the parties agree. Think about that for a minute. Some of the contracts that will get adjudicated are one offs. It could be a single supply of material services. It could be a home renovation that is very small and short, a $5,000.00 kitchen, and there's only one invoice. Think of the situation where the contractor finishes the work and then the home owner refuses to pay. In that circumstance adjudication technically would not be permissible because the contract is complete. Of course we don't really know what complete is because some people would say if there's deficiencies it's not technically complete. But bear in mind that adjudication is designed to resolve disputes on an invoice by invoice basis. The presumption is that there will be further invoices. If there are no further invoices, or no further work to be done, then adjudication is not permissible unless the parties agree. I know that Ted and Chris are going to talk about contracting in adjudication but just a heads up, in my view for those of you who act for contractors or even the home owners who wanted to take an adjudication route and not have to go to Small Claims or Superior Court, you should put in your contract that the parties may adjudicate the dispute, notwithstanding it is complete. The project's complete or the contract's complete. That way you enable yourself to take advantage of this quick resolution process. There's a little trick for you about what the Act says. The Act also says you can only do adjudication for a single matter. Again, we don't know what that means. Typically you would invoice. Someone doesn't pay you go to adjudication. But what if there's a counter-claim related to that invoice, and it's about negligence or it's about the supply of materials, not just a payment dispute? It appears a party should issue their own adjudication notice on that so you would have two adjudications. Then you'd work through ODACC to simplify who the adjudicator will be for that resolution. But again, the Act says only a single matter. So, again, it's designed for, as I said, early resolution of single invoices and disputes but you can take advantage of this if you agree that more matters can be included in adjudication or you add your matter to the adjudication, to go back to back, with the matter that you've been the recipient of a notice of adjudication.

Section 13.9 says that adjudication may only be determined by an adjudicator on the roster. Now it says 'may'. Of course that's fair because parties may wish to adjudicate on their own outside of the Act. Although, interestingly, subsection (3) under section 13.9 says that any contract that purports to appoint an adjudicator is not enforceable. That portion that deals with the appointment. If you want to do adjudication, you don't want to do ODACC, that's maybe fine because it says 'may', it's permissible but you can't force an adjudicator on a party or agree before hand who that adjudicator will be. If you can't agree once an adjudication takes place then you can go to ODACC for the appointment of adjudicator.

Two more sections to talk about. Section 13.12 talks about the powers of an adjudicator, and I know that we have practical experience around this, but the adjudicator can take initiative to raise legal issues. They can issue directions of the parties. They can draw inferences. They can do site inspections. They can retain experts. Unfortunately they do that all at their own expense. ODACC will not cover adjudicator's fees for their disbursements, for example. All fees are paid, as you will note, to ODACC by the parties equally unless there's some overreaching reason why one party should pay and the other shouldn't. So even though the adjudicator has all these powers, whether they're fully going to execute them within 30 days, is an issue. But they do have the powers. This is more the French style of inquisition as opposed to the common law judge sitting back and hearing what the parties want to do. This makes sense. If you're going to do the situation within 30 days, and you're going to hear the parties, you want the adjudicator to be as engaged as possible.

Lastly, section 13.9. This is about payment once an adjudication decision is reached. You have to pay within 10 days. If not you can suspend work. There's interest and you're not liable for any costs for remobilization. Payment is still subject to holdback and you have 2 years from the date of the decision to file it with the court if you wish to use the court to enforce. Unfortunately, adjudicator's decisions are written out in such a way that their longhand. They're not decisions that are easily reduced to an order that you can then walk up to the Superior Court, or online the Superior Court now, and get easily filed. So query how you get it enforced before the court but it does permit it to be enforced. Much like an arbitration award and subsection (4), I think it is, says if you go to court to enforce, any related payment to a subcontractor is deferred, which is interesting. I take that to mean that if a contractor and subcontractor have a dispute and the ruling is in favour of the subcontractor, contractor doesn't pay, arguably the subcontractor payment to their subcontractor may be deferred until that it is paid by the contractor, if they go to court. It seems to be that there is almost a stay because you've gone to court to enforce the order. Query can the sub subcontractor force an adjudication with the subcontractor over the non-payment even though there is a pre-existing order that the contractor has to pay. So it's kind of a little bit weird when you talk about how this all operates, and we just haven't seen enough cases, but I encourage you to read these sections carefully because there are a whole bunch of pitfalls.

Lastly, in my limited time, I'll take you to the PowerPoint or the slide that's up on the screen. It talks about the timelines for adjudication to occur. As you can see it's pretty quick. There's 4 days for the parties to essentially agree to an adjudicator. If they agree then the adjudicator requires the parties to deliver documents, etcetera, within typically 9 days or so and then the adjudicator will have a series of time to render their decision. Interestingly ODACC requires you to deliver, if you're an adjudicator, your decision within 25 days because they wish for 5 days to review it for grammar, not for content and not for legal accuracy, and also to get payment because ODACC is the only one who can actually request payment from the parties to the adjudication. They will not hold up the decision pending payment but they like to use that leverage, I think, to get the payment. Then, of course, the decision is rendered within that 30 day period to the parties. There can be extensions if the parties agree but, again, the point of this is for quick resolution of disputes. Live with it, move on, deal with it on a future invoicing if you need to or through other means.

Last point I'll make, adjudication is one tool that we still have amongst many. We still have liens. We still have arbitration clauses. We still have lawsuits and all those claims that are more negligent based or are massive delay claims, etcetera, do not necessarily need to go to adjudication. Parties still have all their rights. My view is that adjudication is designed for simple, quick resolution of disputes, typically further down the construction pyramid so that the smaller parties don't have to have debts lingering on their books while the larger parties litigate in court. That's essentially the highlights. As I say, you can read section 13.1 and it's got all the details and I'm sure that with Patrick's presentation that we'll have some more details on what's actually gone on in an adjudication. Am I on time for this?

Sahil: Thank you, Neil. Jacqueline, you are up next and over to you.

Jacqueline: Thank you, Neil. Yes, okay. My name is Jacqueline Armstrong Gates. I've been practicing for 25 years. I'm in the Kitchener office with Sahil and I am a commercial and insurance litigator, from the commercial side of construction aspect. I am the whole gamut from owners all the way down to subtrades and provide advise as necessary. This is a quick summary of ODACC, or the Ontario Dispute Adjudication for Construction Contracts. Shannon, next slide, please.

People probably know that a report was released October 1, 2020. The report was to do an overview for their physical year end, end of July 31, 2020. Everyone knows that adjudication provisions came into effect October 1, 2019 so it's kind of a retrospective. This report provides key statistics. It talks about what's happened in the first year, the demographics and it talks about the services that are available. So you'll see on the particular slide that they do have a website. That was on the things they tried to do in their first year was to develop a website. It's a state of the art computer system and it tells you, if you're looking for information, that is the place to go. So let's just highlight. Shannon, next slide, please.

I'm going to highlight some of the key statistics that the did put into the report. As you can appreciate, since it was October 1, 2019, adjudication still in its early stages, hasn't been widely adopted and, as Neil highlighted, not everyone's doing adjudication. There's still all the other options available to it. As of end of fiscal year end, so it's a bit stale dated, there've been 32 notices of adjudication submitted. Most of them, as I said a lot of disputes were outside of the adjudication process. Now that could be one of two things. People are still trying to understand the adjudication process or some of the projects, as you can appreciate, the adjudication process isn't applicable because of the transition. Because their projects would have started before the time frame. The other interest right now is that it's a lot of residential as opposed to commercial or public buildings. But, again, I think we're going to see a greater uptick in the next year moving forward. Shannon, next slide, please.

Now, Neil had highlighted that he'd gone through the process to not actually get certified, but what we've seen from the report is that they roster is made up of a mixture of engineers, project managers, lawyers, quantity surveyors, arbitrators, architects, accountants. Basically what ODACC is saying is you've got to have 10 years relevant construction industry experience. You have a course. You have an exam and then you can take on the adjudication assignments. It's a standard course in that way. If you are looking for an actual adjudicator, on the slide I have listed the website where you can find the adjudicator registry. Right now they have 65 adjudicators. That's pretty good, in the first year, that have been certified. Not everyone that has applied actually has been certified and right now they said they don't plan to cap the number of adjudicators. They will continue to have people apply, take the course and then get certified and put on the roster. Of interest, people, because you're trying to figure out what's this going to cost me, what the report would suggest is that the hourly rates do range as with most professionals, from the lower $250's to the higher $700 per hour, although the feedback that's been provided is that adjudicators are willing to do flat rates and the flat rates have a range as highlighted in the slide, $800 to $3,000, but again it's something you would have worked with your adjudicator in that regard. Next slide, please, Shannon.

Speaking of quick, cause we're trying to make this overview quick, is that the decisions are quick. Typically between 39 and 46 which makes sense as you will hear how the process works and the very strict time frames within the adjudication process. So that's a real positive to trying to get a decision right away. We've highlighted, as you can appreciate and as Neil kind of highlighted to you, there's different types of adjudication, or dismiss for adjudication, anywhere from the valuation of services, materials, non-payments, change orders, holdbacks, anything that they've agreed to adjudicate or help prescribe. So it's a broad aspect for the adjudicator. The decisions are not public record and so that could be positive if you're looking for more a set type of determination. But, again, if you want to have a bit more with respect to what ODACC has been doing I can lend you to that particular email link otherwise the report kind of highlights everything. But all in all they've been saying it's been a positive since the adjudication process came into play in October 1, 2019. That's the quick overview with respect to the ODACC update. I will be pleased to send it off to Patrick and to Karina who are going to give us more lessons learned from adjudication itself.

Patrick: Thanks, Jacquie. Good afternoon, all. I'm Patrick. I'm an associate working in our Ottawa office. My practice focuses on commercial litigation, civil litigation with an emphasis on construction matters and commercial disputes. As was alluded to earlier in this presentation, we as a firm have commenced adjudication from the upper client and assisted them throughout the process. We also had other clients who reached out to us and elected to commence the process themself then reached out to us when they had questions or required legal assistance. That said, we'd like to take this opportunity to share some of the lessons we've learned while assisting our clients with their adjudications. As you know adjudication is a means of method of dispute resolution. That does not work for everybody and is not suitable in every scenario. However, it's likely that adjudication will become an extremely popular and effective form of dispute resolution. One that is turned to over more frequently as the alternative to traditional dispute or litigation. Adjudication is often referred to as quick and dirty litigation and I can confirm that that's the case. It goes by very, very fast and, unlike litigation and arbitration, the time table for adjudication is very tight. Even in substantial and complex cases. The adjudicator and disputing parties can all agree to a fast flexible and streamlined process. To give you an example I'm just going to discuss very briefly one of the adjudications that we've commenced and assisted our clients throughout the process recently.

So in our case our client was a general contractor. The project was in Ontario. There's a dispute with the owner with respect to additional costs associated to changes, delays and the impact of the pandemic, COVID-19. In that case the standard form contract between both parties, as that said, it's very important that you review your contract to find out if there's anything in it with respect to adjudication, but also to review the supplementary conditions as often you will find that information in the supplementary condition. In that case, it wasn't clear to the owner whether or not the pandemic had affected the project, but the owner in an abundance of caution asked the contractor leave site. To demobilize. Later on the owner ordered that the contractor, our client, remobilize then the issue was who's responsible for the costs associated to the demob and remob and all the other costs. Our client complied with the request but then turned to us and asked us for advice and we indicated that adjudication was available to our client. The client instructed us to commence an adjudication. Karina will provide an outline of the steps to commence and pursue an adjudication but, on my end here, I'm just going to provide you with a brief summary of the steps and timeline that was applicable to that matter.

In that case the project was completed on August 1, 2020. As Neil explained earlier today, adjudication must be commenced prior to the completion of the project unless there's an agreement between the parties otherwise. So in this case there was no agreement so we had to commence it before the completion of the project. So we delivered the notice of adjudication on July 31. The owner responded and the owner raised an issue of jurisdiction. The owner is of the view of the world that the dispute could not be referred to adjudication because it was not falling within the category under the Construction Act. We took issue with that and the parties were invited, by the adjudicator to deliver short, written submissions on this issue. Ultimately the adjudication survived the jurisdictional issue, so we were successful in our agreement, and a conference call was scheduled to discuss the process and timeline for the adjudication. Bottom line, we the parties received a decision, plus or minus, 45 days after the notice of adjudication was issued. So, that's pretty good. Pretty quick. If you ever dealt with litigation in Ontario it tends to be longer than that so the parties were, I think, satisfied in getting that decision within post 45 days, which is pretty good. One of the things though, adjudication does not always lead to final settlement of a dispute because either party, as Neil mentioned, can always try to re-litigate the dispute. However, based on our experience, adjudication decisions tend to be accepted by the parties as a final result because parties often want to move on to other projects and focus on what they do best, rather than litigating. That's good. With respect to arguments and submissions, our experience has been that the legal arguments and submissions that the parties are entitled to submit are relatively short. So you have to be on point, concise and make sure that your point is well communicated with supporting documentation. Bottom line, there's nothing to lose. It's often the first kick at the can for the parties with respect to litigation. They can always litigate later. Next slide, please.

For moving parties, so if someone who wants to commence an adjudication to claim something out of the owner and other contracting parties, it's very important that you prepare your back up documentation, or your claim package, way in advance. Essentially, you have no documents, you have no claim. Once you pull the trigger, once you issue the notice of adjudication, things unfold very, very quickly. Next slide, please.

As Jacquie explained, regulation and the Act specifies who can act and who qualifies as an adjudicator. On the slide here you'll see what you would see on the website, on ODACC's website, with respect to a list of adjudicators. The parties can select who they wish to use and you can see there's some information about who's the adjudicator. Do they speak French, English, both? What their rate and then you can see there's a function there that you can use to conduct a search and try and narrow it down to, let's say, if you only want engineers or architects to serve as an adjudicator. It's a very good tool to narrow down who'd you like to select as an adjudicator. Next slide, please.

Here you see I just clicked on Nick's profile, as an example. Here you'd see a little bit more details about who he is as an individual, what's his background, profile, contact information, education. So often that information will assist lawyers and clients to determine whether or not that adjudicator is acceptable to them. Next slide, please.

My last point will be on experts. Some are of the view that when a dispute is so complex as to require the involvement of an expert then maybe litigation or arbitration should be considered as a more realistic and practical alternative. However, the need for expert evidence to determine a dispute does not necessarily mean that the dispute is disqualified from adjudication. We had one of the adjudicators who specifically said that in one of the decisions that we received, and I was happy to see that, because ultimately experts are there to help the parties, assist the adjudicator and not to complicate things. Often disputes are decided on the basis of the contract, correspondence and project documents, however, some disputes require additional evidence, affirmed witnesses and experts. While parties may not need to retain an expert for all adjudication it might be prudent to do so in some cases. The type of expert and the expert mandate will depend on the nature of the dispute. Based on our experience the use of an expert can be invaluable especially when there are complex technical causation or quantum issues. A succinct, short and, more importantly, to the point report can be extremely useful. Further, the legislature specifically considered the fact that an expert opinion may be required. As Neil explained earlier, the adjudicator can also retain the services of an expert to assist him or her in the factual determination, if necessary. Those are all my comments. I'd be happy to share further comments or lessons learned which you all find. Thank you.

Karina: Thanks, Pat. Good afternoon, all. I'm Karina. I'm an associate in the Ottawa office. I'm a construction litigator and I work with closely with Patrick. So I'll walk you through some of the more technical stuff we have encountered in the adjudication we've been part of. If you're the claimant, when you want to start an adjudication, you or your representative must first create an account on ODACC's system to then be able to create the notice of adjudication. To create the notice of adjudication you simply click on the new case button on the home page of the ODACC system. It will redirect you to the page you see on the screen and you'll be prompted to fill in the information to create your notice of adjudication. If the claimant has a representative, the representative can create the notice of adjudication on behalf of its client. Alternatively the claimant may include the representative's contact information in the notice of adjudication. There's only one line for the representatives name unless it has changed since we did our last adjudication. So if the representative wants to provide access to its clerks or assistants they will need to reach out to ODACC, by email, after the notice of adjudication is created. But it is possible to provide access to other people on your team after the notice is created. Keep in mind that the ODACC system does not allow users to save the notice of adjudication. Once it's started and log out of the system and then resuming concluding it at a different time. So only start the process of creating your notice of adjudication once you're ready to submit it. When filling in the information through the various steps, the claimant will need to choose between ODACC's process or a customized process. ODACC has a pre-determined process for the adjudication to be conducted but if the claimant thinks the process is not suitable for its case, or if for instance the contract between the parties provides for a specific adjudication process then you'll want to choose the customized process. If the contract provides for a process often it will not be complete. We expect, as we do more adjudication, that contracts will become more detailed about that. So if it's not complete the adjudicator will likely hold a conference call with the parties to agree on a process and the adjudicator has the power under the Act, as Neil was saying earlier, to issue directions in regard to the conduct of the adjudication. However, if the parties agree between them as to the process, or choose to follow the ODACC process, for instance, then we don't see how the adjudicator would circumvent that. But if there's no agreement between the parties as to the process then the adjudicator might ask the parties to provide brief submissions, as to the process, and the adjudicator will then ultimately decide how the adjudication is to be conducted. Taking into consideration contract provisions and the parties submissions.

An adjudication can also be commenced without using the ODACC system. If the claimant does not wish to use the ODACC system to refer a dispute to adjudication then notice of adjudication can be printed, filled in manually and filed with ODACC by sending it to ODACC via email or fax. However, we would recommend using the ODACC system because it's possible to do everything electronically and the process is not complicated at all. We see no reason why the party would not use this process especially now that we're all working remotely. Next slide, please.

After claimant completes the notice of adjudication ODACC will send an email to the respondent advising that the claimant filed a notice of adjudication with ODACC. Per section 13.11.1 of the Act, the respondent may respond to the notice in writing so it is not obligated to do so. We think that you should if you're the respondent and why wouldn't you? Otherwise you risk having a decision against you directing you to pay potentially large chunk of money to the claimant. The response must be in accordance with the regulations, and regulations states that the respondent shall provide a copy of their response to the adjudicator and the claimant, and the response shall be provided no later than the day on which the adjudicator specifies but must be provided to the adjudicator and every other party on the same day. Once a respondent completes and submits a response to the notice of adjudication, through the ODACC system, the claimant will receive an email from ODACC stating that there's an update in the ODACC system. So what do you see on the screen there is the online ODACC dashboard. It's very user friendly. You have there your completed milestones so you'll see when the notice of adjudication was created, when it was received by the respondent and when the respondent submitted a response, for instance. Here on the right, in the milestones box, you see that it says that the adjudication is proceeding without response to the adjudication. This was actually an error on the dashboard by the ODACC staff. In this case we were the respondent and had actually submitted the response by email. So we had to contact ODACC for them to fix the mistake and it was subsequently corrected on the dashboard. So it's important you pay attention that the dashboard is accurate. Back to the other slide. Sorry. Thank you.

So you also have these steps to complete. These are not just your tasks but it's also all the steps to become completed in the matter. So you have the deadline for the claimant to upload supporting documents, for the adjudicator to communicate his decision, etcetera. Next slide, please.

The claimant and the respondent must send their documents to the adjudicator using the documents tab on the ODACC system. Note that the ODACC system does have a size restriction of 20 megabytes. In our experience most of the time the document brief will exceed the file size limit. You will likely need to consider an alternative means of submitting your documents. We have used TitanFile which is a secure third party software that allows to send large files by email. If you do exchange documents through other means it might be prudent to upload a letter on the ODACC portal confirming that you're proceeding this way and also send a message through the portal confirming that as well. Next slide, please.

So once the adjudication is triggered you'll get updates constantly. So you need an efficient mechanism in place to make sure you monitor the updates that come in by email. You'll receive updates from communications at ODACC.ca, as you can see on the screen, and it informs you if there's a new message from XYZ in the ODACC system. Next slide, please.

So this is the message board you'll see in the ODACC system. It is organized by case. It's an accurate record of all documents and messages exchanged. The documents stay there for 7 years and to access them you just need to visit the documents tab once you login to your account. There are a lot of messages coming in. As you can see on the screen there were 43 items just for this one case in a short time span. It is annoying but they are important so you need to pay attention or else you risk failing to complete a step which might adversely affect your case. ODACC also offers technical support throughout. For example, to facilitate payment of fees, to grant access to the portal to someone in your team or to a specific case, etcetera. So do contact them. They provide very timely responses. We were actually quite impressed with that. So these are lessons learned so far. We hope these can be of help to you in your next adjudication. So I'll pass the floor to Ted Betts and Christopher Stanek who will discuss adjudication contract drafting.

Ted: That's great. Thank you, Patrick and Karina. A lot of lessons learned. We're collecting as much information as we can as we go. It's all new to everybody. We've been using our partners in the United Kingdom who have had adjudication for more than 2 decades. A lot of lessons learned from them have helped us and now we're adding to our repertoire, our experience. We are asking anybody who has any kind of experience, any clients, obviously on a confidential basis, to pass along their lessons learned or tips that we're hearing so that we can collectively, as a community, learn the best ways to approach adjudication. My name is Ted Betts. Unlike everybody else on this panel I am a solicitor. I spend my life drafting contracts and, not surprisingly, whenever the government brings a new law or amendments to existing law there's a whole bunch of contract drafting that follows. If you're a cynic you're going to say that the government changes laws frequently just to keep us lawyers employed but in this case I think these are really valuable adds. But there are things that people have been drafting around and we're seeing a lot of template contracts and other construction contracts requiring some amendment to address certain situations that we'll talk about right now. After I've highlighted some of those my partner, Chris Stanek, is going to talk from a litigator's perspective about how the solicitor's always get it wrong.

So with that, before we get into looking at some of the drafting that we are seeing, I just want to highlight one important point. And that is this; this is a statute. Adjudication is a creature of statute. These are statutory rights and remedies and so they can't be waived by contract, unless expressly permitted under the Act, and very little of this can be. So whenever you're drafting, to the extent that you're fettering somebody's right or blocking the right to adjudication or limiting access to adjudication, you run the very real risk that your provisions will be unenforceable. I am creating a bigger mess for you and in a likely already situation where there's already great dispute. At the very least you're going to have a hard time negotiating those because it you're limiting access to the adjudication to begin with you are really undermining the purpose of this tool for resolving disputes within the contract on construction projects.

So with that, let's talk a bit about some of the things that we are seeing. First thing, obviously, anytime you have new requirements to draft and procedures in the statute, you'll see some drafting around the contract to make sure they work together. We've got dispute resolution procedures - you can actually bring up the whole slide if you want - a lot of contracts already have alternative dispute resolution mechanisms. These will still work, as Neil and others have said. These are still sitting in your contract but how do they fit and work with adjudication? Adjudication does not need any drafting because it works by statute so it will work. But how does it blend and work with the existing ADR that you have in your contract? That's something we're seeing some drafting around. We're also seeing just the inclusion of adjudication in the existing provisions of the contract to reflect that this is another tool, another process that needs to be incorporated. So wherever you have references to claims, or disputes, or proceedings your adding in adjudication. That's just a tidy up and catch up and you might have seen, if you've looked at the CCDC 2 standard form construction contract, the new issue, the new version that just came out in December, for which we have an article by the way if you want to look at that on our website or contact us for it, they've incorporated adjudication throughout their contracts so the two documents, the statute and the contract, work together properly. But there are some specific drafting that we're seeing and most of this drafting is around filling in gaps or filling in mechanics of how this actually gets implemented in real life. One of the first things we're seeing mostly, and Neil alluded to this earlier, is the list of things that can be adjudicated. The statute sets out a specific list and those are always going to be adjudicated, or able to be adjudicated, but we're also seeing people expand that list to include any kind of dispute. Because it is found to be a very efficient and quick remedy for moving the project along and moving disputes along. Sometimes we see it just a little bit narrower. Instead of any kind of dispute, any kind of counter-claim or any kind of other specific disputes, can be added if you want in your contract. But it has to be written into the contract. The other way we're seeing adjudication expanded is just on the time period. The Act limits adjudication to requiring to be commenced before the completion of the contract. So you can, by contract, just say hey this is a good remedy. This is a good dispute resolution procedure. We like it. Let's expand the time period within which we can bring it to either the warranty period, or 2 year limitation period, or indefinitely, however you want in your contract. But again, that's got to be written into the contract.

The other place we're seeing quite a bit of drafting, more and more, is on the procedures themselves. A lot of people want to draft in their procedures, just like they have in the past with arbitration, drafting in their preferred way of proceeding through the course of an adjudication. Were not seeing a lot of that and I'm not actually personally thinking this is advisable at this point for kind of two reasons. One is we don't know what the best procedures are yet. It's all still brand new. We're collecting our lessons learned but those arbitration proceedings are very formal. They've been developed over time from people's experiences, dealing with real arbitrations, and we just don't know what those are yet and we don't know what are the best ones to keep. The principle of fast and efficient, fairly informal process to continue on during an adjudication. The more procedure you add, the slower it's going to be, the more difficulties and challenges you're going to have and having an efficient adjudication. Secondly, not sure that adjudicators are going to accept it. Adjudicators effectively have the last word on the proceedings of their own adjudication, and so it's not clear that these are going to be accepted, or that the adjudicator is going to be feel bound by them in all of the steps and ins and outs and notices and so on of your procedure. There's some question about whether there's some real value in putting pen to paper on all the procedures. Procedures are allowed. You are allowed to draft your own procedures though. The Act specifically allows this as long as it does not conflict with the timeline set out in the Act. Another place we're seeing a lot of procedures is in the notice provisions. Both in terms of where the notice goes to. Maybe it gets escalated from the project manager. How it gets delivered? We're often seeing parties decide to create a project specific email address for all adjudications, or even any notice of dispute, so that it gets dispersed internally to a distribution list. Because the timelines are so tight, and it's so important not to miss a notice, they want to make sure that it gets to the right people quickly and efficiently. So we're seeing some of that. We're also seeing a little bit of when. When can you deliver a notice of adjudication? There's some real question about whether that's going to be enforceable or effective under the Act because it does start to get to limiting your access. So we're seeing people say you can't deliver between the 25^th of December and New Year's Day. It's not nefarious but it is blocking somebody's right to start a notice of adjudication and it's not clear if the Act would allow that.

Where we're seeing some real potential problems is in adding in a whole bunch of steps and preconditions to adjudication to begin with. Things like consultant's got to render a ruling first. You've got to give the owner 10 days notice. You've got to provide these kind of documents. You have to go through mediation first. All of those kind of things we've seen people drafting. I have some real question about whether those are enforceable because you are really now preventing the access to the right that's clear and explicit in the statute. So I'd be very wary about those or draft them very carefully so that it's really strictly procedural or helping the adjudication instead of blocking it. As Neil pointed out, sometimes people are trying to appoint adjudicators. That's not going to be enforceable. That's clear in the statute. Even a list of adjudicators that you would have to pick from is a bit risky and could be unenforceable. So those are some of the things that we're monitoring. Some of the things we're drafting and seeing in contracts and with that I'll pass it over to Chris.

Chris: We can go to the next slide here. From what Ted has said, and I think he's absolutely correct, and if you review the items I'm going to take you to a couple of sections here. There are two key areas that the Act will not allow anyone to do in the contract. Number one is to restrict the access and number two is to fetter or restrict the powers of the adjudicator. Keep in mind that the adjudication rules and the Construction Act does not restrict prima contract. You can put whatever dispute resolution clauses you wish to put in your contract. The adjudication provisions and the Construction Act doesn't restrict you from doing that, but that doesn't make it an adjudication, and you can't make those things a condition precedent to adjudication. Specifically because of the language in 13.5. Now Neil has referred to this and Ted has referred to this. There are really only two exceptions what's set out in 13.5. 13.5 is the access provision. It says that anyone who issued a proper invoice can go to adjudication, subject to, it says subsection (3), as we referred to. Subsection (3) means you can do it after the time period. The time period being after the contract ends. Specific Acts says you can specifically put that in the contract. There's also in the enumerated list of things that can be adjudicated, there's item 7, which says anything else that the parties agree upon. So it's clear that you can add to the list of things that can be adjudicated in your contract and you can extend the time period. But otherwise you can't restrict access.

13.6 is where it allows you to put in rules. The rules, again, can't restrict the access or the powers of the adjudicator. It's perfectly fine to say notices should go here. Or notices should go to this person. Whatever procedure you have for that that appears to make things more efficient seems to me to be completely consistent with the adjudication procedures. But what you can't do is say that you have to have a meeting of certain people first. That pulls you into 13.5 which says there's your access. You can't restrict the access. As Ted said, you can't also restrict the selection of the adjudicators because that's specifically set out in the Act. The powers of the adjudicator are set out in 13.12(1). They are listed. I think you can add to the powers but it would up to the adjudicators whether they wish to take those on. Because the powers are specifically set out. Those powers, as set out in the Act, can't be restricted. This is a mandatory process. Why is this important? Because if you have something in your contract that is found to be non-enforceable it's not enforceable by the adjudicator in the adjudication. It's still in your contract. So the danger is when you follow those procedures in your contract, and if it's an alternative dispute resolution process, that's governed by a different Act. That Act is the Arbitrations Act because you can make whatever deal you want to make to resolve disputes and that's governed by the Arbitrations Act. Why is that important? Because it has a different appeal procedure and there's a different test for a penal decision in arbitration as opposed to adjudication. So if your intention is to have rules for the adjudication they need to be enforceable within an adjudication. Otherwise if you create a process that is not an adjudication, that doesn't mean it's not enforceable, it's a contractual requirement but it's an arbitration. That I think is something that you can see the courts looking at in future if people continue to put stuff in their contracts that really are outside the boundaries of the simple rules under 13.6 and the exceptions in 13.5. Now I'm going to turn it back to Ted to talk to you about what's going on in Alberta.

Ted: Thanks, Chris. Not just Alberta but across the country. Adjudication is coming. It's been in Ontario now for over a year and a bit but as we expected we are seeing prompt payment and adjudication forms across the country in all of the jurisdictions. At the moment three Provinces actually have legislation on the books, not yet in force. In addition to Ontario, I should say, three Provinces and the Federal government have passed legislation bringing in adjudication. These are not in force yet but they are coming. Alberta in particular is quite keen and moving very quickly. They introduced Bill 37 last year, in the third quarter last year, with an expectation that by June, hopefully, and possibly as last as July they will have adjudication on the books and in force in Alberta. So this is coming. These are lessons learned that are going to go across the country. What's holding them up right now in those Provinces, Alberta, Nova Scotia, Saskatchewan and the Federal government is, as we saw with our own statute in Ontario, the procedures of adjudication require some regulations. So they're working on those. Those are already in play in Alberta and also Saskatchewan and Nova Scotia, which has been sitting there for a little while, they've been waiting to see how things work out with Ontario. Maybe there's some lessons learned that they can take from our experience before bringing it into their own Provinces. Other Provinces are also looking at it. Quebec is as well. They've got a pilot project underway in Quebec. BC, New Brunswick and Manitoba have launched initiatives to look at it. They just don't have legislation yet. So that's what's going on across Canada. So if you are a national contractor or owner or developer of some kind, this is coming, and learning adjudication in Ontario will benefit you across the country. Back to you, Sahil.

Sahil: Thank you, Ted and thank you to everyone who has kept us all very busy over the last 50 or so minutes with the Q&A section of our presentation. We have answered all of your questions. Whoever asked the questions, I do not see any open questions on the chat function right this very second. Like I said, it has been a very, very informative and good discussion. At least as this presentation was going on people were asking questions which were really, really relevant. So we'll leave the Q&A open for another minute or so. I see that the numbers have started to drop in terms of participants. So I would now like to take the opportunity to thank all of you who have joined us this afternoon, at least here in Ontario, from your living room, your kitchen, your office, your office office, and thank you again for participating. If you have any follow up questions please reach out to anyone of us and we will be more than happy to assist you. Lastly, this was our third annual webinar just on adjudication. We are hoping to run an event like this every year. If you have not yet signed up to our newsletter, or anything else, please do so. This webinar is recorded and will be posted to our website along with a copy of our presentation so you will have access to the slides once it is posted on our website. Lastly, we are more than happy to receive feedback from you and, again, thank you Thank you very much for joining us today and stay safe everyone. We will now be shutting down our live presentation. Thank you again and stay safe.