Adjudication Framework

Closes 19 Sep 2025

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Theme 1: Who could use an adjudication framework?

Initially, the adjudication framework could be limited to disputes between businesses. A broader range of dispute types, for example, disputes over relationship property could be included in future, once the process has been tested for business disputes.

Parties that can use adjudication

Commercial disputes make up over two thirds of all civil claims in the courts (excluding debt recovery claims). Supporting businesses to resolve disputes out of court quickly has the greatest potential to improve economic productivity and free up court resources for other matters.

By business, we mean a range of different entities that provide goods or services in some form – including companies, incorporated societies, building societies, limited partnerships, and charitable trusts. This includes organisational forms that are used by Māori businesses.

If we include other types of claims there are factors that need more consideration:

  • Personal property claims, class actions, consumer claims or estate claims often involve the interests of third parties that would not be represented in an adjudication process, such as children or beneficiaries, difficult relationships, or relationships with power imbalances. It may not be easy to make determinations on the papers alone.

  • Disputes involving consumers, insolvency, provision of government services, employment, and tenancy disputes are governed by existing legislation.

  • Tortious claims typically aim to compensate a person for a wrong to their bodily health, property, reputation, or financial prosperity. These claims are often not seeking a fast resolution. Duties in tort are also imposed by common law or statute and may be better suited for litigation.

Initially limiting the scheme to businesses also gives time for the market to build capability. There are only about 100 statutory adjudications per year in the construction industry. The introduction of a broader statutory adjudication pathway could lead to a significant increase in demand. It will take time to build up adjudicator capability and capacity. A broader range of dispute types could be included in future, once we have more information on its effectiveness and the required capacity. If so, we would need to do more work on whether additional safeguards are required for disputes that involve individuals.

4. Should businesses be the only parties that are able to seek a statutory adjudication? Who else do you think should be included?
5. What types of dispute do you think could be adjudicated in addition to contract or payment disputes?

The types of disputes that businesses have with other businesses could be in scope, for example over payment or parties’ rights and obligations under contract.

We are interested in your views about what other types of disputes between businesses could be included in addition to contractual or payment disputes. For example, should property disputes between businesses such as intellectual property, sale and purchase of land or boundary disputes be included?

What disputes can be adjudicated?

In New Zealand, matters adjudicated under the Construction Contracts Act 2002 have included:

  • Contract interpretation
  • Claims for variations
  • Extensions of time and delay cost claims
  • Claims for liquidated damages or penalties
  • Defective, incomplete work, or breach of statutory warranties claims
  • Repudiation or entitlement to cancellation of a contract.

Adjudicators could also determine any other matters by written agreement. Parties may agree that any dispute or only certain disputes under the contract must go to adjudication. For example, claims solely for monetary relief.

The adjudicator’s jurisdiction

In making the determination itself, the adjudicator could be given a broad mandate to consider:

  • the terms of any contract
  • material provided by both parties
  • expert reports on specific issues
  • results of an inspection carried out by the adjudicator
  • the provisions of the relevant empowering legislation for the adjudication (this could be relevant in future if another Act refers parties to adjudication under the adjudication framework)
  • any other matters the adjudicator considers relevant.

 

6. Should both parties have to agree to using statutory adjudication? Why / why not?

It could be voluntary to participate in statutory adjudication.

Voluntary participation

A voluntary opt-in model provides the greatest flexibility for businesses to decide whether and how they want to resolve their disputes, whether they are a claimant or a respondent. A court could also be able to order the parties to participate in adjudication.

Adjudication is mandated for construction disputes in New Zealand under the Construction Contracts Act 2002. More recently, adjudication has been included as a form of dispute resolution under the Grocery Industry Competition Act 2023. These schemes allow one party to require another to participate in an adjudication. This approach forces disputes to be resolved promptly and if enabled under a new adjudication framework, would ensure wide use of statutory adjudication.

However, the purpose of the new framework is to enable more choice, not to require parties to use it or prevent parties going to court if they prefer that route. An agreement to use statutory adjudication could be included in contracts before disputes arise or through parties mutually opting-in when they do. Parties may wish to agree on the scope of issues that would be suitable for determination by an adjudicator. Judges, lawyers, and industry organisations could also still recommend it to parties if they think it appropriate.

7. Should a court be able to order statutory adjudication?
8. Should there be a financial threshold for statutory adjudication? If so, what should it be?

There could be no financial threshold for using adjudication.

Setting a threshold for payment claims

There is no limit to an amount which can be referred to adjudication under the Construction Contracts Act 2002, or to arbitration under the Arbitration Act 1996. For example, adjudication has been used for payment claims brought to the privately operated Building Disputes Tribunal ranging from $1,310 to $106 million.

Some private providers of adjudication and arbitration services have established bespoke processes for smaller value claims to help keep costs down. We anticipate the market would continue to offer similar services under a new adjudication framework.

9. How should the framework address cross-border disputes? Is there anything else you think we should consider regarding cross-border disputes?

Disputes involving overseas parties could be adjudicated under the framework.

Cross-border disputes

The framework could be designed to apply to contracts that are made or entered into in New Zealand, or that relate to matters to be performed in New Zealand. This would mean that it would apply regardless of whether a party is a New Zealand entity or not. As with domestic disputes, parties from other countries would need to agree to participate in an adjudication under the framework.

It may be difficult to enforce a determination across borders if a foreign party does not comply. New Zealand legislation cannot generally provide for the recognition or enforcement of New Zealand decisions overseas. While awards made under the Arbitration Act 1996 can be enforced overseas under the United Nations Convention on the Recognition and Enforcement of Foreign Arbitral Awards, no such agreement currently exists for the enforcement of an adjudicator’s determination.