Construction Adjudication in Ontario: Fast-Track Resolution of Payment Disputes

Money disputes on construction projects can grind everything to a halt. A subcontractor who hasn't been paid stops working. A contractor waiting on a holdback release can't float the next phase. Litigation takes years. Construction adjudication Ontario introduced under the Construction Act is designed to break that logjam — fast, inexpensively, and without ending anyone's right to fight the full dispute later.

This article explains what adjudication is, who can use it, how the process works from start to finish, and when it makes sense compared to going to court.

What Is Construction Adjudication?

Ontario's Construction Act (the Act) created a statutory adjudication system that came into force in October 2019. Adjudication is a binding but interim dispute resolution process: a neutral third party — an adjudicator — hears a focused payment dispute and issues a decision, usually within a month. The decision is enforceable immediately. Either side can still pursue arbitration or litigation afterward to revisit the underlying merits, but they must comply with the adjudicator's order in the meantime.

The Act is administered in part through the Ontario Dispute Adjudication for Construction Contracts (ODACC), the province's authorized nominating authority for adjudicators.

Who Can Use It?

Adjudication is available to parties in a **contract under the Construction Act**, which covers contracts for the improvement of land in Ontario — construction, alteration, repair, or demolition of a building or structure. That includes:

• General contractors and owners
• Subcontractors and sub-subcontractors
• Suppliers of services or materials incorporated into the project

Key threshold: the contract must be subject to Ontario's Construction Act. Residential homeowner contracts for smaller renovations may fall under a different regime; confirm with a lawyer whether your specific contract qualifies.

What Types of Disputes Can Be Adjudicated?

Not every disagreement is adjudicable. The Act limits adjudication to specific categories of dispute (as of writing — verify with a lawyer, as regulations can change):

• The valuation of services or materials provided under a contract
• Payment under a contract, including a notice of non-payment
• Disputes about a notice of adjudication itself
• The amount of a proper invoice or the payment of a proper invoice
• Disputes about the amount of or entitlement to a holdback
• Any other matter the parties agree in writing to adjudicate

Adjudication is deliberately narrow in scope. It is not designed to resolve claims of negligence, defects liability in full, or complex multi-party tort disputes — those belong in arbitration or court.

How the Process Works: Step by Step

Step 1 — Notice of Adjudication

The party starting the process (the "claimant") serves a Notice of Adjudication on the other party. This document must describe the nature of the dispute, the amount in issue if known, and the relief sought. Service triggers the timeline.

Step 2 — Adjudicator Appointment

The parties have a short window (as of writing, four days) to agree on an adjudicator. If they cannot agree, either party can ask ODACC to nominate one. ODACC maintains a roster of qualified adjudicators and will appoint one quickly.

Step 3 — Delivery of Documents

Once the adjudicator is appointed, the claimant delivers a Notice of Adjudication and supporting documents to the adjudicator and the responding party. The respondent then has a set period to deliver its response. Both sides must disclose the documents they rely on — there is no broad discovery process.

Step 4 — The Adjudication

The adjudicator reviews the submissions. Depending on the dispute, the adjudicator may conduct a written hearing only, or may hold an oral hearing (in person or virtually). Procedural rules are lean by design: there are no examinations for discovery, no motions practice, and no live witness cross-examination unless the adjudicator permits it.

Step 5 — The Decision

The adjudicator must deliver a written decision, typically within 30 days of receiving all required documents (as of writing — timelines are set by regulation, confirm before relying on them). The decision includes reasons and states the amount, if any, to be paid and by when.

Step 6 — Enforcement

A party who receives a favourable adjudication decision can apply to the Ontario Superior Court of Justice to have the decision enforced as a court order if the other side does not pay. This can happen quickly and without a full trial.

The "Pay Now, Argue Later" Principle

The core philosophy of Ontario's adjudication system is pay now, argue later. An adjudicator's decision is binding and must be complied with immediately, even if the losing party disputes the outcome and intends to seek a different result through arbitration or litigation afterward.

This principle protects cash flow on construction projects — particularly for subcontractors and sub-subcontractors who are most exposed when payment stops flowing down the chain. It does not mean the matter is finally resolved; the parties retain the right to relitigate the same issue fully. But during that process, the money ordered by the adjudicator must be paid.

Adjudication vs. Court: How Do They Compare?

Adjudication is the right tool when the dispute is primarily about whether and how much to pay, and when preserving the project relationship and cash flow matters. Court is the right tool when you need a final determination on liability, substantial damages, or relief beyond a payment order.

Frequently asked questions