Chris: Hello, everyone. I'd like to welcome you to today's lunch and learn. I hope everyone's got a sandwich and a bowl of soup. My name's Chris Stanek. I'm a partner in the advocacy department at Gowling WLG in Toronto. I'm co-Chair of this session along with my Sahil Shoor, who's a litigator in our Waterloo office. Our agenda for today, we're going to first of all discuss the introductions of adjudication at construction projects in Alberta, because there's new legislation that has just been passed in Alberta with respect to adjudication. Then we're going to have a panel discussion of adjudication of construction disputes in Ontario. We've had some adjudication. I've been involved in adjudication. Sahil's been involved in adjudication and we're going to have a panel discussion of those who've been involved in adjudication to let you know what one can expect if you're facing an adjudication in Ontario. That's the agenda. I'd like to turn this over to Stephen Carter-Edwards, who is a partner in our Calgary office, in Gowling's Calgary office, and Maria Serrano, who's an associate in our Calgary office. Stephen and Maria, take it away.
Stephen: Thank you very much. We're going to start off with Maria giving us an introduction into the Alberta Prompt Payment and Construction Lien Act and I will follow up at the end by just going through the adjudication timelines, to give you some familiarity of what you can expect once these things in play. So, right away, over to you, Maria.
Maria: Good morning. To start off, recently, less than a month ago on August 29, the changes to the Alberta Builders Lien Act came into effect in Alberta. The new Prompt Payment and Construction Lien Act makes some notable changes. It renames the former Builders Lien Act. It also introduces prompt payment so prompt payment timelines and requirements that are triggered by the receipt of proper invoice by the owner. There's also changes to the existing Builders Lien Act and it also adds a fast track adjudication dispute resolution process. The purpose of this new legislation is to provide consistency and speed up payment throughout the construction industry and also to provide an alternative to the courts to resolve disputes in relation to payment under contracts during the project. Any contract which was entered into on or after August 29 must conform to these new provisions. That said, there is a transition period, so any contract that was entered into prior the August 29 date will continue to be governed by the Builders Lien Act for 2 years. Section 37 of the regulations provides that any contracts that were entered into before, but are expected to remain in effect for more than 2 years after the date, must be amended to reflect their compliance with the Act. So that's any contracts that will continue past August 29, 2024. If we could go to the next slide, please.
Who does this Act apply to? It applies to anyone who's performing work, including services, supplying materials with respect to an improvement in land. It's to all construction sectors so from home building to large oil and gas projects. This is regardless of delivery model or type of contract or arrangement. It also applies to owners, developers, consultants, so architects and professional engineers, for providing consulting services with respect to the improvement. Any projects involving municipal, county and regional authorities, so including P3 projects that they're involved in. If we could go to the next slide then we'll see who it does not apply to.
It does not apply to Federal Government projects. Any Provincial Government projects governed by the Publics Work Act. Public partnerships that involve the Provincial Government and the operation and maintenance portions of any P3 projects. Of course, maintenance and turn-around projects in general.
Does it apply to your particular project? It does if it's an improvement. The definition of an improvement, under the current builders lien has not changed. It can be anything constructed, erected, built, placed, drilled on or in the land that improves the land. So this excepts anything that's not affixed to the land or intended to become part of the land. Alberta Courts overtime have held that things that such as design planning, renovation, demolition and reclamation as improvements. So the Act applies whether your contract is in writing or oral. It's just an agreement of some type that you provided some work or goods or materials with respect to that improvement of land. Next slide, please.
So the builders lien. Can a party still lien, a registered lien? Yes. It's not affected by the new prompt payment legislation. Even if a party is involved in an adjudication process they can still register liens for amounts that are due and owing in relation to the improvement of lands and the work and the materials provided. The parties can definitely not contract out of or release or waive any lien rights. Perfect. So there are new lien timelines. A party now has longer to register. The lien period, the general deadline to register a lien for materials or the performance of services, has been extended from 45 days to 60 days, from the last day the materials were furnished or the services were provided. Now 90 days. Oil and gas well sites will get 90 days and then a new lien period of 90 days will also be created for work or materials provided with respect to improvements that relate to the furnishing of concrete. Now that will be the manufacture and supply of concrete but not the installation of concrete. Perfect. So now a brief introduction into adjudication.
The new prompt payment legislation introduces the fast tracked dispute resolution process. It involves the appointment of a certified adjudicator to determine a payment dispute between the parties. Now typically there will be no oral hearings, or affidavits, questioning or cross-examining of witnesses. It is intended to be a fast track process with pre-determined dates so the adjudicator will have to render a decision within 30 days of receiving the submissions. I guess the key to the success will be making sure that the project's records are very organized so that should an issue come up there's an easy presentation and understanding presented to the adjudicator. Now for the next slide.
What can be the subject of an adjudication? The regulation clarifies that a wide range of matters may be submitted to adjudication under the Act. So section 19 of the regulations sets out that the evaluation of work or services provided or goods and materials furnished. Any issue involving non-payment. So this includes any invoice that was due and owing but remains unpaid within the time period provided. Any written change orders, whether approved or not. The release of holdback and any other matters in relation to the contract that the parties agree to have adjudicated. Now the next slide.
So definitely not everything can be the subject to an adjudication. So even if the contract requires disputes to be addressed through mediation, arbitration or a court, an adjudication can still proceed but just not if a court proceeding has already been initiated by a party relating to the same dispute. I guess it's also good to say that if the adjudicator feels that the matter in dispute is frivolous or vexatious then they can also refuse to hear the issue. You can have the matter in dispute determined by an adjudication hearing during, but not after, the completion of the contract or sub-contract. With the next slide I'll turn it over to Stephen who will talk about some timelines and some more information.
Stephen: Thank you, Maria. This is the adjudication timeline spreadsheet, if you will, that shows you that from day zero all the way up to day 47, with a possibility of a 10 day extension, these things are supposed to be finalized in 2 months. So step 1, of course, starts at day zero with the commencement of the adjudication. There's a form that the applicant would fill in and then they would submit to the nominating authority and the respondent. Then between day 1 and day 4, the adjudicator is selected. So either the parties will agree on adjudicator and notify the nominating authority of their agreement or the last nominating authority to appoint one. Now, if the parties agree on the adjudicator, of course they should make sure that the adjudicator is available and, of course, does not have any conflicts. So once the adjudicator is appointed, so this is now step 3, this is within 7 days of the nominating authority having received the application, then the nominating authority appoints an adjudicator that the parties either agreed upon or picks one from the roster. Then that triggers the 5 day period within which the applicant has to provide a copy of the notice to the adjudicator as well as their records. These records include a copy of the contract, or sub-contract, as the case may be and then any records that the party intends to rely on in the adjudication. The documents should include a basis of the claim and what kind of relief they're seeking. This now triggers the 30 day period within which the decision has to be rendered. But in the meantime the respondent has 12 days to put their materials together and get them into the adjudicator. In this step, of course, they're going to put all their documents together that are in a response to the claimant's records and they'll have any records that they intend to rely on during the adjudication.
One of the discretions that the adjudicator has is they can issue directions to, or seek clarifications, from the parties in that 30 day period. You'll also notice that before the determination is rendered the parties can terminate the adjudication. So this would be prior to day 40. In other words, if the parties, once they've exchanged their records, can figure things out amongst themselves and work out their own solution to the dispute, then they would notify the adjudicator that they don't need a determination and that would end it. So when we hit the 30 day time period, so we're now at day 40, the adjudication is complete, the determination is rendered and the adjudicator submits the determination to the nominating authority for certification. This is done within 7 days which now takes us up to day 47. Once this happens there's a couple of things that can occur. One is a party may apply for judicial review. They have 30 days from the certified determination, once it's provided they have 30 days to bring this judicial review application, and if that were to take place of course the determination is stayed. The other thing that can happen is within 7 days of receipt of the determination, the party that has the determination can certify it in the Court of King's Bench of Alberta. Then finally they can start some enforcement process to effect a resolution of the determination.
There are, of course, forms and processes that we have on the website, the Gowling website, if you Google prompt payment and you'll be able to find both the forms and processes for Alberta and Ontario. Maria's just put the link up in the chat. Also, just wanted to say that the nominating authority for Alberta is not actually in place yet. The government put out a PQR that allows potential participants to become a nominating authority all the way up until November of 2023. So I know there are some people that are applying now and will have a response to the PQR probably shortly and, of course, once this happens then we'll be up and running. There has been some preliminary training for adjudicators that has taken place in Alberta. It hasn't been completed yet because the training started before the legislation had been finalized. So those people have to get a little more training on what the actual legislation is now. Then if there were something to happen that the contract was entered into after August 29 of 2022, a dispute arose that had to be adjudicated, of course the Minister would be in the first instance the one to appoint an adjudicator to deal with this. We've approached the Minister and suggested that they could use the Royal Institute of Chartered Surveyors. They have a whole roster of adjudicators that do these construction adjudications in England all the time. So now we're going to turn this over to Ontario to hear about how this process has been unfolding. The ODACC has been in place a lot longer than Alberta. I think they've got a couple of years under their belt so it will be very interesting to hear how their adjudication timelines work and the processes and we have a panel discussion to deal with that. So over to you, Ontario.
Sahil: Thank you, Stephen, and Maria. Good afternoon, everyone, if you're joining us from Ontario. I see for the people who have signed in that we have attendance from throughout the country. All the way from Vancouver down East and Quebec as well. So I, as Chris mentioned, I am a partner here at Gowling in the dispute resolution space, and I have the utmost pleasure to be your host for a very lively discussion about the experiences that our adjudicator, Chad, is going to share with us, Chris Stanek, my partner, as an external lawyer working on the adjudications he's going to share with us. Lastly, Marie. Now Marie is a Chief Legal Officer for America's Upfield Group. So firstly, welcome all, and I'm looking forward to our discussion.
To start off the discussion, Chris, maybe I can start of with you by asking you, what has your experience been, Chris, when you are looking for qualities and experience in order to appoint an adjudicator?
Chris: I want to look at what type of dispute it is. If it's an issue of interpretation, a legal interpretation of the contract, I'm going to look for an adjudicator who's a lawyer. There's a limited number of them on the ODACC system that are lawyers. If it's a dispute over a technical matter over a change order, for example, as to whether something is within scope or our of scope, I'll look more broadly. Could use a quantity surveyor if it's an issue of quantities but to me it depends upon what the nature of the dispute is, quite narrowly, and I don't think that we need to have a lawyer every time. But on cases where it's a contractual interpretation issue, that's when I would look to have someone who's a lawyer to adjudicate.
Sahil: Chris, keeping that theme in mind, have you had any experience where the parties not been able to agree on an adjudicator, and if so, how did you resolve that issue?
Chris: We resolved it by speaking with counsel. It was an adjudication where we did not agree upon who it would be. I had not had a case where the other party was not represented which could be a challenge. We had not had a case where we've had to have ODACC select the adjudicator and maybe Chad has more information on that.
Sahil: Chad, now moving on from Chris to you, what has your experience been, Chad, in your role as an adjudicator?
Chad: I ran through the numbers because I can tell from the Notice of Adjudication who the parties have selected as their chosen person and the respondent gets a chance to respond. As well, when ODACC contacts me, either to tell me the parties have selected me or that they haven't and my name has just been drawn out of the hat, they tell me that. Either you've been selected or ODACC has appointed you. My experience is it's about 60% of the time that I get chosen. Sometimes I'm not the parties first choice and that's fine. ODACC does yearly training sessions. The most recent one was last Friday and they gave some statistics on adjudications and that experience is the same as mine. ODACC ends up appointing in about 40% of cases, and to pick up on Chris' comment, it absolutely is, in my experience, mostly when we're dealing with parties that are not represented by counsel. I'm chalking that up to parties not being able to agree on the dispute and then carrying that disagreement and that adversarial feeling into choice of adjudicator. So when the respondent receives the notice saying, I want this person as the adjudicator, the first thing the respondent does is say, I would like anyone except that person. One interesting thing is, in the matters where I'm not everyone's first choice, so either the second or third or whatever choice or I'm appointed by ODACC, I kept seeing the same adjudicator's name pop up as first choice and I was racking my brain trying to figure out why this is. I went on the adjudicator registry on the ODACC system, which is an excellent system by the way, very informative, and the registry starts alphabetical by last name. This person's name is first. So, look, I'm just drawing that conclusion maybe that's why they show up on everyone's Notice of Adjudication.
Sahil: Thank you, Chad, for some great insights. Now, Marie, moving onto the next theme that I have in mind, and I think everybody's very keen to learn from you and your experience as a party who has been through an adjudication. Adjudication comes with strict timelines, not a lot of time to put the materials together, what are some of the tips that you can share, in terms of the things that have worked for you, the lessons that you have learned and certainly some things that you wish you would do differently if there would be an adjudication that you may participate in the future?
Marie: Good afternoon, everyone. So, Sahil, I think maybe just a little bit of context first. It is a very streamlined process and it puts a lot of pressure on the parties who are participating but I think that's also the real benefit of it. When you're in a dispute with your contractor and it's creating distraction and delays, it's super important to get it behind you and try to normalize relations and move on. So while I think it's a challenge to keep to the timeline I think the benefit of it is clear and so you sort of roll up your sleeves and do what you have to. In our case we had Chris Stanek representing us and he was a great taskmaster and kept us to the deadlines. I think it also goes back to, just as a matter of course when you're doing construction in your company, just making sure that you're keeping your files organized. Keeping them segregated to the extent possible so that when you do have to reach out to my internal clients that it was a matter of telling them to sort of pull back that information that I had been asking them to keep in a certain way. Then it's a matter of, quite honestly for me internally, was working very closely with Chris to work on the statement and get our exhibits together and all that. I think given the limited time period that you have, it sort of keeps you honest, that you just need to do what you have to do. As I said, sort of roll up your sleeves and get after it.
Sahil: Thank you, Marie. Chad, what has your experience been as part of this process and the timelines?
Chad: I'll say what my expectation is, because we don't have that tight timeline like you do with liens to get an adjudication out there, it really is at the claimant's leisure, subject to completion of the contract. So my expectation is the claimant's documents are going to be in order and probably at least some draft of the written submissions that they're eventually going to be submitting, so that when I have my initial Zoom call, which I try to do within maybe a day or so of being appointed or selected as adjudicator, I'm going to be setting a timetable, a very, very tight timetable because I have such a limited amount of time before I have to get my determination in. So those documents, by statute have to go in, the documents that they're relying on have to go in within 5 days of my appointment, and then there's going to be a couple of days after that that I'm going to require the written submissions by. I have seen this. Don't schedule a holiday or start your adjudication with a holiday coming up the week after. There's going to be no ability to accommodate that. If you're the respondent my expectation is also going to be that getting this Notice of Adjudication is probably not the first time that you've heard of this dispute. So I'm going to be expecting that the respondent, maybe they don't have their ducks in a row quite to the extent that the claimant is expected to, but they have to have their documents together. They have to know sort of what they're going to say because those exchanges of submissions, that's going to happen within probably about 2 weeks of my appointment.
Sahil: Chris, anything to add to that?
Chris: Sure, I do. One of things that you probably want to be aware of is you're also going to be asked to select a procedure along the same time that you're going to pick an adjudicator. ODACC has four different set procedures, all of them with page limits and document limits. You want to think about that and I know that as lawyers everyone is going to want the maximum number of pages and the maximum number of documents.
Chad: For the minimum fee. For the minimum fee. Just sort of jump in there.
Chris: But I don't think that that's sort of the way to look at all this. I want to get the most time. I want to get the most documents. If you look at what your dispute is at bottom then you really can work within the page limit and the document limit. I guess another tip that we give is a lot of adjudicating with ODACC is managing the website and you have to know that when you're putting in, for example if you're a respondent and you go to put in your response to the Notice of Adjudication, and you're typing it into the website, you're going to get one chance to do that and if it gets submitted you're going to have to call ODACC and get it changed. It makes some sense, if I can give this tip, to do your drafting before you go on the website to do your submissions. Don't just go on the website and start doing because you may not get a second chance and then you've got to call ODACC staff to fix something. It's not like a court procedure. A lot of this is very much driven by ODACC's website, which is great, but it takes some getting used to.
Sahil: Thank you, Chris. So, Chris, let me ask you this. If somebody like Marie contacts you and say, I've just received this Notice of Adjudication. Can you walk me through as to what is that I need to do to do an order to respond to it? So do you, in order for the adjudications, Chris, you and Chad, that you both have run, to keep a list of documents or information that you want to get your hands on as quickly as possible to get fully up to speed, and if so, what are those kinds of documents/information that you look for?
Chris: The whole issue here is going to be about persuasion. In my view as a litigator is that an adjudicator, or a judge, is persuaded by contemporaneous documents. You tell them that something happened or somebody says, everybody understood. That's not particularly persuasive. You have to show documentary evidence what happened and what your case is. So the first thing I will say to a client is, send me everything you can. More is better than less. We will spend the time to go through and find out what is the more compelling evidence and separate it from the less compelling evidence. Because you're going to have a page limit. You can't upload everything but send it all to me. We'll decide what we're going to upload. Then we're going to talk about what are the most important issues on the case. As litigators we're also trained to rank our arguments. In a page limit situation you're not going to be able to make every single argument and let the adjudicator sort it out. You're going to have to go with your most compelling arguments first. You may not get to your second or third argument. This is the process and I think that's the best way to approach it.
Chad: I like to see the parties avoid the data dump when they're submitting their documents because my timeline, regardless of what process is chosen, there'll be a date by which the claimant has to submit their documents, which is in the statute, I can't relieve against that, and then there'll be another date for the respondent to provide their documents. I like to avoid the data dump but I understand that it's not always possible to avoid that. To the extent you can narrow down the documents, I guess please do. This is my plea to everyone out there, please do narrow them down, but I do understand that there may be documents that get uploaded as potentially relevant documents that really don't end up getting referred to in the submissions.
Sahil: Thank you both, Chris and Chad. Marie, now moving onto you, when Chris and Chad are telling you we need this information, we need this documentation, how do you collect that piece of information, documentation internally and do you have procedures and processes in place? If there are challenges. We're all about learning the internal mechanics as to how you collect the information.
Maria: Right. Given that so much is through email in this day and age, in this case it really was reaching out to my internal clients who were involved in the matter, and I as I alluded to before this dispute had been going on for a bit of time so we had tasked people to sort of be tracking their information, their documents. But really reaching out, getting them to collect their relevant emails and other documents, send them to me. While Chris did, as he said, which was ask for a broad set of documents, I did sort of a first pass just to make sure I wasn't sending him things that were completely irrelevant. Then I also tried to tier what I was sending Chris in terms of most important, less so, just so he could start his process. It's really sort of keeping your internal processes, in terms of making sure that people are keeping their documentation in order in the normal course, so when something like this happens it's fairly straightforward to capture that. If that fails, I also am accustomed to giving people a list of search terms so that they can go through their emails, with search terms, and find relevant documents that way as well.
Sahil: Thank you, Marie. Both, Chris, you and Chad have spoken about the submissions being in writing, there being a page limit and not much oral advocacy being done in the adjudication process. In order to tell a compelling and a convincing story, Chris and Chad, are there things that you like to address in your written submissions in order to get your point across, given the page limit involved, and if so, are there creative ways that you have tried to do that, keeping the page limit in mind, and if so, what has your experience been?
Chris: As far as the submission goes, I think written submissions are more powerful than oral submissions, and I know Chad's view on oral submissions which he'll probably speak to, but I think that if you're creative with your written submissions that will be all you need. The contract itself is not going to be in your page limit. So you can use that by making liberal reference to particular sections of the contract. That'll save you pages and time. As far as other documents what I've used before, we did this I think successfully in the adjudication we did for Upfield, is that I used excerpts. I didn't attach entire documents but I made it clear because when I was doing the excerpts that this was an excerpt and this is only a part of a much larger document. That got us under the page limit. Like I said, my goal was to put compelling, contemporaneous documentary evidence before the adjudicator. Stuff that they could read and see our case rather than having me tell the adjudicator our case. That, I think, is an effective way to be an advocate. That's how I used the page limit. Just to try to excerpt and give the highlights because really it was all the space that we had.
Chad: If I can jump in, sorry. It's very important to be an effective written advocate in this adjudications. I'm not going to say that I never allow the opportunity for oral submissions. I do and I have. It's a rare case that requires oral submissions and just because of the limited time that we've got for exchange of documents, delivery of submissions, responding submissions, reply submissions, which as an aside aren't factored into the various procedures that ODACC has set up, there's a very short window of time. A small window of time within which to get those oral submissions done so that there won't be an opportunity for say a full day hearing on the matter. You're going to be limited to the days that you can choose and the time that you're going to be given. You can, I think, be more effective in your advocacy in a 10 page submission than you can in, whatever, 20 minutes or half an hour that you're going to get of oral submissions.
Sahil: Thank you, Chad and Chris. Chad, given your role as an adjudicator, once you're appointed and you receive the document that says now you are the adjudicator for this dispute, tell us about how you run the first few crucial meetings with the parties to set the stage and how has that been received?
Chad: As I had mentioned before, it's within a day or two, just keeping in mind that every day of delay eats into the time that I can write the determination at the back end, I'll get the parties together and I will ask them to talk about fees and procedure. Fees, there's a default. If we all can't agree, so if the parties and I can't agree what the adjudication fee is going to be, then ODACC will be asked to set the fee and they have no discretion. It's based on what the quantum of the amount in the Notice of Adjudication. We'll have that chat and if this is something that is a default hourly rate perhaps it makes sense to work out a flat fee. At the same time we'll also be talking about the process, the procedure. How many pages are you going to get of written submissions? How many pages of documents are you going to be able to submit? Those two issues are linked. I've also found it helpful to, at that initial meeting, to talk about jurisdictional problems. Are there any challenges that are going to be coming from the respondent saying, this thing shouldn't be subject to adjudication. There's a number of reasons that respondents have raised to me. If that happens what I like to do is say, okay, if that is a sort of a fundamental issue that goes to whether this thing should even be in the adjudication process or not, can we get that determined at the front end? So we've got this 46 day window, 30 day window, whatever, should we be using the first 5 or 6 or 10 days to exchange submissions on jurisdiction so that I can make an interim finding? Either that I have the jurisdiction and then we'll go off to the races on the substantive issues, or, just kill it right now. We shouldn't have to spend the next month dealing with this. Just deal with it in 10 days if this really isn't properly the subject of the adjudication. That's how I like to run those initial meetings and ideally there's just one initial meeting. We don't have to have a series of initial meetings. That's not always possible but I like to get those fees, procedure, jurisdiction issues out of the way, a timetable set and then just wait for the documents to roll in.
Sahil: Thank you, Chad. Marie, going back to the point that you made in response to one of my questions, that you want to have an adjudication in place and the timelines really help so that you can start going ahead with the project in question. Something that I find interesting, Marie, and I want to ask you is, does the fact that an adjudication has taken place, and depending on the outcome of that adjudication either good or bad or ugly, does that in your experience have any impact on the remainder of the project and the completion? Are you able to speak to that, Marie?
Marie: Sure. I think in our case, first of all the matter at dispute was settled, and being settled by a third party I think it took the emotion out of sort of the winners or the losers. This was the decision that was made. Both parties had to follow it and move forward. So it took that off the table so that the parties can move forward. But I think also having gone through the experience, and in our case it was early on in the project, I think to a certain extent it was a bit of a stalking horse for us moving forward in trying to resolve our disputes, smaller matters that might come up over the project, and really sort of having gone through that experience forced the parties to make a good effort to try to work collaboratively and not have to go back the adjudication process. In our case we were the parties that prevailed. I didn't want to hold that over their head as a victory, if you were, but I do think it helped us work together a bit more collaboratively moving forward. Knowing that was there if we had to go back to it but not something that either party really desired to do.
Sahil: That's very good information, Marie. Chad, another thing that I have in mind is, again, as you're deciding the adjudications, by an invoice by invoice basis, are you seeing that the same parties are returning to you on the same projects? Have you experienced that at all?
Chad: I will say not to me but I have had adjudications where it's clear that this is not the parties first rodeo together. Usually they'll put the previous determination in to say, here we are. Dispute 2.0. Here's how dispute 1.0 went and so this one should be similar. I'm also seeing where it feels like making a tough decision about whether something is an extra to a contract, for example, and additional compensation needs to be made, instead of the consultant or someone within the owner making that decision and having to maybe explain it internally that we're going to pay a little bit more for this, they said let's just go to the adjudicator and have that person say that more money. It sort of deflects the responsibility. I've definitely seen that happen. I think that the adjudication can run a little smoother if the parties are familiar with each other within the context of an adjudication. It can make the whole process run a little smoother.
Sahil: Chris, have you had any experience on multiple adjudications on the same project?
Chris: No. But the adjudications that I have had do reflect sort of a desire on each party's behalf, let's get this issue settled so we can move forward. I think that any adjudication has an impact on how the rest of the job proceeds. I think that that is my view. Primarily what people are using the adjudication system for, I'm not seeing a lot of people adjudicating over particular change orders or invoices, they're adjudicating over issues. Issues that the parties may have not considered in their contract and have arisen and now they need a resolution to that so that the rest of the job can proceed. I don't know that that was anticipated by the government when they made the amendments and brought out adjudication but that certainly seems to be what people are using it for now.
Sahil: Very interesting. Anything to add, Marie, from your perspective and your experience with the adjudication? Are you finding it coming again on the project? I don't know if the project is complete or not but we don't need to get into those details, but anything that you wish to share?
Marie: I guess the only other thing I would add is I think it did inform my view and process, as well as my colleagues, as we moved through the process because having been through it and knowing that it was possible for additional disputes to arise, I think it further framed out how to maneuver through things, and document retention and things like that, in the event that we had to go back and adjudicate another issue. But it was certainly a great help certainly coming early on in our project to allow us to move forward and not have to deal with this issue further, which was a fairly fundamental issue, which had we not gotten it finally resolved it would have continued to pop up over the course of the project and would have been a further distraction. Again, I think having an outside body be able to make the decision for the parties was invaluable.
Sahil: Thank you, all. The next area that I would like to focus on and perhaps, Chad, I can start with you, is what are the values of the claims that are landing on your desk for you to make a decision on?
Chad: I'd say certainly under 300,000 is the usual one with a number of them under a 100,000. ODACC publishes an annual report, so the most recent is I think it came out in the summer of this year for the previous 12 months, the average claim is under $200,000.00 and interestingly the average award is under $30,000.00. So that's interesting. But what I am seeing, and just to pick up on the last point, on a couple of occasions the parties have said, and they tell me this because we're talking about fees, this is a $28,000.00 dispute. The adjudication fee would be $2,000.00, which I have to pause here, that's the adjudication fee - I only get half of that - just to keep that in mind when you're making submissions as to what sort of procedure you want, so the parties say this is a $28,000.00 matter but it's not really a $28,000.00 matter. It's more like a $300,000.00 matter because whatever you say here is going to inform our decision on whether we're going to pay more for this issue because it's going to come up 6, 8, 10 more times, whatever, down the road. So because of that, when we're talking about fees, they're saying we don't want to really just be limited to 3 pages, 4 pages. We need more and here's why it's important to us.
Sahil: Thank you. Chris, what has your experience been, the ones that you've been contacted for?
Chris: Mine have been much larger. Mine are usually in the multi-million dollar range. Chad raised a point and I don't know if we've covered it about procedure. We have seen contractual amendments. We usually talk about the parties contracts. Contractual amendments that expand the timelines and the pages in the adjudication. I think it's becoming more popular to write these things in the contracts. My personal view from the ones that I've seen, some of these things are enforceable and some of them aren't, and I think that it would be on an adjudicator by adjudicator basis, as far as what would get enforced and what wouldn't, it would seem to me. To people who are considering writing in long adjudication procedures into their contracts, and I'd be interested in Chad's view on this, but I'm not sure all of that stuff is going to be strictly enforceable if it were challenged. Maybe this is some of the jurisdictional things that you deal with.
Chad: I guess if I could quote my 10 year old dealing with his siblings, you're not the boss of me. It's great that you guys have agreed to what the procedure is going to be and what I've seen in the contracts is, if our dispute is under 150 or 200, it will be some limited procedure. If it's over that it'll be more procedure. But that doesn't really always apply. Sometimes the lower value ones need a little more procedure. Sometimes the higher value ones need a little less procedure. That said I do try to, if the parties have actually talked about this and thought about it and agreed to this is what we want for procedure, as long as it's not totally out of whack with what the adjudication fee is going to be, then 9 times out of 10 I'm going to say that's fine. We'll do that procedure.
Sahil: That's good. Chad, we have our first question from one of our audience and the question is from Brandon, it says, Chad, if the claimant is aware of several issues for adjudication on the same project with the same party should they all be included in one Notice of Adjudication or each dispute adjudicated separately?
Chad: I'll give the lawyer's answer, it depends. There's a prohibition in the Act against adjudicating more than one matter, I think is the language. So if you do try to lump all of your disputes together and you don't have the agreement or consent of the responding party, you could run into a jurisdictional challenge if you try to do that. I guess that's the short answer. Also to Marie's point, part of this is an issue arises, a dispute arises, let's address it, get it dealt with, and then move on and continue on with our contractual relationship. So it doesn't sometimes benefit the agreement to compile all of your grievances and then drop the adjudication bomb the week before Christmas, or whatever. Sometimes you want to deal with these things as they come up and not let them fester. My two cents.
Sahil: That's good. The folks who are joining us on this platform, virtually, we are now at our final stages of this session. The Q&A, we've been monitoring and responding to the questions, but we know have some time to address any questions that you may have about both presentation by our colleagues in Alberta, or, the panel discussion that we've been having about the experience of adjudication in Ontario.
Chad: Can I jump in with a question for Marie?
Sahil:: Go for it, Chad.
Chad: This has come up. I'll explain where this is coming from. In the adjudicator training sessions, one of the thoughts about why we're seeing such low numbers of adjudications in Ontario, and just to start I'll say, as of last Friday, since adjudication started, we've had 209 adjudications started in Ontario. Now, if you'd asked me back in 2018 where we'd be at this point, I would have though we would be in the thousands, maybe a few thousand. So one of the thoughts that was thrown around was that there's a reputational concern. That you don't want to go ahead with an adjudication because you're worried if I do that this is the last project I'm ever going to have with this person. I just want to know, Marie, is that a big factor that goes into the decision making about whether you're going to start an adjudication or not?
Marie: I have to admit in our case our counterparty was the one who started it. We did not. Having said that, if I were to do it over again, while we were certainly aware of the process I think we were sort of trying to resolve it by ourselves. I think that now that I've been through the process I probably would have tried less hard, and for a shorter period of time, and I would have thrown my hat towards the adjudication process. Because, again, I really do think it was beneficial in resolving it and quieting it and allowing us to move on. We were spending more time arguing than doing what we were supposed to be doing, which was a construction project. Chad, I actually sit in the US so I can't speak for the broader constituency in Ontario, but I just don't know if maybe it's still a process that needs to be advertised a bit more and I think certainly this seminar is a good opportunity for that. That people know it's available and that it really is a very useful process to undertake.
Chad: I agree on the education component and I'll just say as a lawyer who represents clients who might have adjudications, and as an adjudicator who looks at these things, it's surprising to me how few people have really looked at the prompt payment provisions and ensured that they've got a proper invoice. Which can be a trigger to almost a strict liability if a notice of non-payment hasn't gone in. We're getting into a little bit of technicalities here but it strikes me that there is a major education component that hasn't been met yet. Sessions like this are very helpful for that.
Sahil: Thank you, Chad, for your question and it's a very important discussion. The next question from our audience, Jeff McIntyre, the question leads back to the inclusion of adjudication wording into contracts. Do people believe that it could tighten up the process and potentially reduce the amount of non-payment, if so, could it be used as a shield rather than a sword?
Chris: I can handle that. What we've seen is they're mostly procedural things that are being included. I think that that's really the only opportunity. You can't contract out of adjudication. You can't affect anybody's rights to access to adjudication. So the only things you can really write in are procedural which would come into effect after the adjudication has started. But what we're seeing is mostly lengthening the timelines and page limits. We're not really seeing anything that would address getting rid of the dispute or settling the dispute before you go to adjudication. I think that the Act more or less precludes that.
Sahil: That's exactly the case, Chris, and that's what I've experienced as well. Just a note on the P3 contract, adjudication has been there outside of the ODACC for a very long time. In fact, adjudication is a step before you go to an arbitration. The dispute resolution process, as Chris mentioned, is trying to refine what the process and the procedure may look like but not contracting out at all. I think we're coming close to an end of our discussion. You will receive an email, or if you have access to a Smartphone, if you can scan the QR code and complete a survey, that would be very much appreciated, to everyone who is joined with us to listen to our webinar this afternoon. The survey really gives us the feedback in terms of programming our future programs and things that you'd like to see more, things that you'd like to see less. In fact, this program came out of the feedback that we received from one of you. So that really helps. Again, you will receive an email as well with a copy of the slides that Stephen and Maria used for part of their presentation. We look forward to having you again on our future programs. Thank you to Stephen, Maria, Chris, Chad and Marie for being with us, and the most important people, Shannon and Margaret, for running everything behind the scenes to make sure that we run this program as smooth as we possibly can. Thank you again. Chris, any last words?
Chris: We've got a couple of questions we probably …
Sahil: Oh, are there more?
Chris: Yes. I think Stephen is answering the first one from Danielle … Stephen's typing in answers so I'll let Stephen do that. But there's another question from Brandon … Thoughts on a contract that require a consultant determination on the dispute prior to being able to proceed with adjudication. Again, you can't restrict access to adjudication. You can adjudicate on any proper invoice. So the consultant determination will be separate, in the contract, it would be separate from the statutory right to proceed to adjudication. I recognize that that may be a logical progression but one would be a contractual requirement and the other would be a statutory requirement. So you can't restrict a statutory requirement by a condition precedent.
Chad: I'll jump in here though. One thing that's being mooted amongst the adjudicators that I've spoken to is the use of the word dispute in the Act and whether that could be addressed in the contracts that the parties agree that they don't have a dispute until certain steps are taken. It's very interesting because that issue of the consultant determination sort of might butt up against that potentially and your right to proceed with an adjudication.
Chris: Probably would be something you would need a judicial determination.
Chad: Definitely. On that point, actually before we go, I gather that some people are aware of the Android case that went to the Divisional Court and I gather, I don't have the details yet, but there is another one in the offing. The court has either been asked to or has agreed to, details are sketchy, so it's been a slow process but these things are eventually going to be looked at by the court and we'll hopefully get some guidance on some of these issues.
Sahil: Thank you, Chad, and Chris, and to everyone else and thank you all for joining us and we look forward to hosting you again on our future programs. Thank you.
Chad: Thanks.