Ontario Construction Law is changing

Exciting Times for Owners, Contractors, Subcontractors, and Lawyers

Construction Law in Ontario has changed, and construction lawyers, contractors, and subcontractors have new tools (or weapons for some) they can make use of for faster results than the court system.

Ontario Construction Law is changing – are you ready for the adjudication process?

Cheaper and faster maybe or maybe not, less frustrating – very possible.

Construction Act – Adjudication

On October 1, 2019 and afterwards, if a dispute arises relating to:

• Value of services or materials
• Change orders and payments
• Set-off for amounts owed on other projects
• Holdback payments (or lack thereof)
• Other matters the parties can agree to adjudicate (ie. Add on)

Owners, contractors and subcontractors can “adjudicate” the dispute under section 13.5 of the Construction Act (Ontario) (formerly the Construction Lien Act).

Timeline and Procedure

The process is intended to be completed in 46 days total.  A written “notice of adjudication” is prepared, copies of contracts and documents relied upon must be provided.  Generally, a decision must be released within 30 days (with two-week leeway granted to adjudicators who need more time).

Adjudication cannot be started once the project is complete or if the parties specifically contracted out of adjudication.

Key Take Aways

It is important to ensure the following if you or your family run a construction company or operate in the trades:

• Being able to quickly put together key and relevant documents as needed
• You have 4 days to agree on an adjudicator – or one is appointed
• Make sure you have a contract – verbal agreements are for the 80s
• A decision can and cannot be appealed – speak to a lawyer about this as there are limited grounds where a decision can be set aside (right or wrong is not one of them)
• The decision is enforceable as if it were a Court Order
• If you mess around with the process you could have to pay the other party’s costs. If not you will only have to pay your costs
• Adjudicators can conduct onsite investigations (with the owner’s consent)

Whatever your situation, these changes may present a good opportunity to assess your legal situation and ensure you have the documents you may need already in place and you know which steps to take should a dispute arise. Consult with a lawyer for any questions or to prepare for these changes.