Most participants in the New Zealand construction industry will be familiar with adjudication. Whether they have been involved in one or not, they will know that it is a speedy and private process to resolve disputes.
The right to adjudicate arises under the Construction Contracts Act 2002 ("CCA"), which gives any party to a construction contract the right to refer a dispute to adjudication. The CCA places no restrictions on the types of construction disputes that may be referred. The parties have a brief opportunity to present their evidence and arguments on the dispute, and the adjudicator publishes a determination. The determination generally takes effect immediately and must be complied with within two working days, which is intended to preserve cash flow, while the parties retain the right to relitigate the dispute at greater length in court or arbitration if they want to. This is sometimes referred to as a "pay now, argue later" regime.
Business owners outside the construction industry should now be taking notice. The New Zealand Ministry of Justice consulted publicly in 2025 on a proposed Adjudication Act that would extend statutory adjudication beyond construction to civil business disputes more broadly. This would be a world first and reflects the Government's view that the construction adjudication model, with its truncated timeframes of around six to eight weeks, could benefit businesses across sectors. A similar adjudication model already applies for grocery industry disputes.
The Ministry describes the feedback as mixed. Submitters raised concerns about complexity, whether participation should be mandatory, and access to justice, but interest in the concept was high. It is not clear whether, or how, the proposal will be developed.
The Ministry says that it is "considering how best to link the adjudication framework with a broader programme of future work on access to justice and dispute resolution more generally". Might that mean that adjudication could be adopted as a court-mandated alternative dispute resolution process? After all, the Ministry's consultation paper asks: "Should a court be able to order statutory adjudication?"
In the meantime, there is nothing to stop businesses agreeing to refer their disputes to adjudication (or an expedited arbitration heard on the papers) - when contracting or when the dispute arises - and trying the process for themselves. If they do, they will find a well-oiled regime set up to achieve at least 80% of the results of traditional litigation for less than 20% of the time and cost. The resounding verdict from the construction industry is that the results, although imperfect, are usually good enough: most parties accept the adjudicator's determination and move on.