How to Resolve a Construction Dispute in NSW

Construction disputes are almost inevitable on complex projects. The question is rarely whether a disagreement will arise, but how you handle it when it does. The good news is that there is a spectrum of options for resolving construction disputes in New South Wales - and litigation is only the last resort.

Common causes of construction disputes

Most construction disputes come down to a handful of recurring issues:

• Defective or non-compliant work
• Delay and disruption, including extension of time claims
• Disputed variations and scope
• Payment disputes, including withheld progress claims
• Liquidated damages and time bars
• Termination of the contract

Your resolution options

1. Negotiation

Most disputes are - and should be - resolved by direct negotiation. A well-framed letter setting out your position, supported by the contract and the facts, often resolves matters without the cost of a formal process. Early legal advice helps you negotiate from a position of strength.

2. Mediation

Mediation involves an independent mediator helping the parties reach a commercial settlement. It is confidential, relatively quick, and keeps the outcome in the parties’ hands. Many construction contracts require mediation before litigation.

3. Adjudication

For payment disputes, adjudication under the Security of Payment Act is often the fastest and most cost-effective route. An adjudicator determines the amount payable, usually within weeks. See our guide to the Security of Payment Act.

4. Expert determination

Some contracts provide for technical disputes to be decided by an independent expert. This can be efficient for disputes that turn on engineering or building questions.

5. Litigation

Where a dispute cannot be resolved by other means, court proceedings may be necessary. In NSW, construction disputes are often heard in the Supreme Court’s Technology and Construction List, or in NCAT for residential matters.

Choosing the right path

The best approach depends on the nature and value of the dispute, the relationship between the parties, the urgency, and what the contract requires. A specialist construction lawyer can map the options and recommend a strategy that gets you the best outcome for the least cost and delay.

How we can help

We act in construction disputes of all sizes across Sydney and NSW. Whether you need a sharp negotiation letter, representation at mediation, an adjudication application, or litigation, we can help. Learn more about our building and construction disputes service.