Building & Construction News Alert: South Australian Bill Proposes New Model for Appointment of Adjudicators
On 24 March 2016, a Bill to amend the Building and Construction Industry and Security of Payment Act in South Australia was introduced to the South Australian Parliament. That Bill proposes a system of appointment of adjudicators that underlines a trend at least in the eastern states of Australia (Queensland and now possibly South Australia), moving away from the appointment by a nominated authority chosen by the applicant (New South Wales, Victoria and Western Australia).
In late 2014 Queensland amended its Act (Building and Construction Industry Payments Act) to allow for the Registrar of The Adjudication Registry (effectively an officer within the Queensland Building and Construction Commission), to appoint an adjudicator.
The proposed South Australian system:
- Abolishes Authorised Nominated Authorities (ANA).
- Sets up an Adjudicator Review Panel consisting of five persons one of which has to represent the interest of contractors and one of which has to represent interests of subcontractors.
- Proposes that the function of the panel is to:
- Oversee a pool of adjudicators;
- Enquire into the suitability of individual persons to continue as adjudicators;
- Make recommendations and give advice to the Small Business Commissioner in relation to adjudication generally.
- The panel will have the power to recommend removal of adjudicators with a right of review, but importantly the appointment of adjudicators will be made by the Small Business Commissioner who is to select ‘an adjudicator randomly from the pool of adjudicators established’.
This is a different process to that which occurs in Queensland, in the sense that a Registrar appoints adjudicators according to their experience and understanding of the issues that might be at play within the adjudication, which might be seen as more flexible.
The proposed South Australian position is as a result of continuing criticism of the ANA appointment system, similar to that which occurred within the Queensland review conducted in 2013/2014. Principally that review related to various undesirable aspects of the appointment of adjudicators by ANA, including reported distortions in the system of appointment, and a perception of bias. A trend to move away from ANA appointments seems to be gaining some momentum as the recent discussion paper by Fair Trading New South Wales, canvasses this issue as well. It would not be surprising if changes were made in New South Wales as a consequence.
Tony Mylne, Partner