By Dr Samer Skaik

A few days ago, the Turnbull Government released the final report of the Review of Security of Payment Laws, undertaken by Mr John Murray. Murray’s report made 86 recommendations to improve consistency in the security of payment legislation. In the relevant Media Release, the Minister stated that:

the Government will consult with industry to consider the report’s recommendations and explore ways to improve the protections for individuals and businesses involved in subcontracting in the construction industry.

The report provided eight recommendations (43-50) pertaining the introduction of review mechanism in statutory adjudication based on my written submission in this regard. The written submission was merely a presentation of the findings of my PhD entitled “Introducing review mechanism into statutory construction adjudication.” I cite the relevant paragraph from the final report which cites my rationale of introducing this concept:

During the consultation process a number of parties raised the concept of the legislative regime providing an aggrieved party a limited right to apply for a review of an adjudicators decision. The rationale for this concept was expressed by Mr Samer Skaik, a leading academic in this field, as follows:

Statutory adjudication was introduced into the security of payment legislation as a fast-track payment dispute resolution process aiming to facilitate cash flow within the construction contractual chain. However, in recent years, courts have been more willing to intervene in adjudication process due to poor quality of adjudication outcome particularly in relation to large and/or complex payment claims. This situation has encouraged aggrieved parties to challenge adjudication determinations by way of judicial review resulting in numerous judicial review applications, particularly in Australia. This has eroded the original object of the security of payment legislation. The mission has been compromised particularly in ensuring that contactors are paid quickly for the work they do on an interim basis. With that, some jurisdictions allow for an express limited right of aggrieved parties to apply for review against erroneous determinations as a way to remedy injustice caused by the speedy adjudication process…

Introducing an appropriate review mechanism would offer a pragmatic and practical solution that acknowledges the existing variety of adjudicators’ qualities and competencies and the difficulty of attaining quality adjudication outcome due to the hasty adjudication process. The review mechanism may act as an effective safety net to capture erroneous determinations away from curial proceedings to help control the overall cost and improve the finality and informality of statutory adjudication.

After a thorough analysis, John Murray eventually accepted my proposition by concluding:

Therefore, whilst I accept Mr Skaik’s proposition that an appropriately designed review mechanism can provide a pragmatic means of improving certainty, restoring disputants’ confidence and reducing the instances of judicial intervention, much, however, will depend on the details. In particular, the key challenge will be to strike an appropriate balance between preserving the rapid and cost-effective nature of adjudication, whilst also providing an aggrieved party with an avenue to apply for review of an adjudication decision. The review adjudication procedure should have appropriate restraints so as to cause a dissatisfied party to carefully consider whether it wishes to pursue such option. It should be available to both parties, but only in respect to disputes involving larger payment claims. An adjudication review should only be lodged with the Regulator (rather than an ANA) and the Regulator should only appoint the most senior adjudicator available to carry out the review. Further, the legislation should clearly state that if a party is aggrieved by an adjudication decision it should take the step of adjudication review before applying to the courts to set aside the adjudication decision.

The report further provided a detailed framework for the review mechanism which substantially follows my proposed devised framework with minor alterations.

Interestingly, the Abstract of my PhD completed in Feb 2017 includes this statement:

The findings of this study, whilst they are very relevant to Australia, they can be applied with minor alterations to suit other jurisdictions operating equivalent security of payment legislation. It is hoped that the recommendations of this study will be considered by concerned policy makers and governmental agencies seeking to apply best practices to improve security of payment laws.

I never realized that I ever had a crystal ball. I am over delighted and honored that I did not need to wait for so long until I observe such significant impact of my research on shaping the future of security of payment laws in all Australian states and territories.

Interestingly, this recognition came on the same day after I received the Finalist Award for the Research Achievement by PMI Australia National Awards 2018. Prior to that, I have also received High Commendation and Commendation Awards in 2016 & 2017 respectively by the Brooking Prize of Society of Construction Law Australia for two research papers on review mechanisms.

Now, I got something to say if asked by the promotion panel to provide an evidence of my research impact other than the number of citations or h-index of my publications 🙂

On this occasion, I would like to sincerely thank Mr John Murray for taking up most of my suggestions and commend his report being so comprehensive and practical.

  • Download the Minister’s media release from here.
  • Download my written submission from here.
  • Download the final report from here.

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