pay $500 – and the adjudicator
would earn $500.

If the adjudicator’s hourly rate is
$250, this suggests that the com-
plete review and decision would
need to be made in two hours or
less. Is that practical?
One answer may rest with the
closest equivalent for adjudication of
smaller cases, the Small Claims Court
system. In Small Claims Court, a
judge will review dozens of cases in a
day, rendering quick decisions. Pre-
sumably adjudicators could move
quickly with their review and deci-
sion-making on simple matters.

“ODACC believes that it is defi-
nitely practical for an adjudicator to
do an adjudication in two hours (or, in
some cases, less than two hours) be-
cause the adjudicator can set the
process so as not to require him or
her to spend too much time,” Reider
said. But how much volume will there
be? ODACC says it doesn’t plan to
cap the number of qualified adjudica-
tors. If there are only a few adjudica-
tions, and there are several
adjudicators, adjudicators’ earnings
will be at best a modest part-time
top-up, except for the rarer larger fil-
ings. Contractors seeking payment
who qualify for adjudication under
the Construction Act have good rea-
son to file – while the decision isn’t
final, it is binding unless it is litigated
further and overturned by a court.

The “winner” in the adjudication
process has the right to collect and
keep the money pending a final court
decision, reversing the dynamics of
conventional construction payment
dispute claims – where a contractor
seeking payment has to spend thou-
sands of dollars on litigation while
the respondent holds onto the
money until the court reaches a deci-
sion. Assuming there are 100 adjudica-
tors working on files at the ODACC
fail-safe rates for amounts less than
$50,000 with an average adjudication
fee of $1,500 (of which $750 is re-
tained by ODACC), there would need
to be more than 6,500 adjudications
a year for each adjudicator to earn
$50,000. Of course, this number ignores
the much larger adjudications, which
ODACC believes will represent the
largest part of its business volume.

The fortunate adjudicators earning
$750 or more an hour on large, com-
plex disputes will clearly earn profes-
sional-level incomes.

Presumably there is an opportu-
nity for adjudicators to conduct
some self-promotional marketing be-
cause the parties choose any adjudi-
cator they mutually approve, and in
these cases, the adjudicator can set
out both the fees and processes.

And adjudicators may be able to con-
vince the disputing parties to pay
fees higher than set out in the
ODACC schedule, even if ODACC se-
lects the adjudicator for the dispute.

“Fees are negotiated between the
parties and the adjudicator for each
case and there is no set fee for pro-
jects below $50,000 or above
$50,000,” writes ODACC’s Carrina
Reider. “The percentages paid to
ODACC to cover its costs and the
percentage paid to the adjudicator
for his or her work are based on the
amounts negotiated and paid by the
parties, not on the amount in dis-
pute. If the parties and the adjudica-
tor cannot agree on the fee, it will be
set by ODACC and will be propor-
tionate to the amount in dispute.”
“An adjudicator determines the
process that he or she deems appro-
priate, based on the fee and the
case, so the adjudicator will receive
fair compensation for the fee re-
ceived by the adjudicator,” she
writes. “In terms of the percentage of the
fees that go to the adjudicator and
the percentage that goes to cover
ODACC expenses, the percentage
was approved by the Attorney Gen-
eral on the recommendation of its in-
dependent Fairness Monitor Ernst &
Young, based on detailed cost and
revenue projections for the five-year
term of the ODACC contract.”
“ODACC costs include a new,
state-of-the-art custom built com-
puter platform that ODACC was re-
quired (by the Ministry of the
Attorney General) to create (and will
cost close to $1 million), salaries,
rent, overhead, etc.,” Reider says.

“ODACC is incurring the bulk of its
costs up-front, with no guarantee of
any volume of work and no guaran-
tee that it will recover its costs over
the course of the work it does for the
Ministry of the Attorney General. In
fact, ODACC anticipates that its
costs will likely exceed its revenue
for a number of years.”
WE INSURED
OVER $1,000,000,000
WORTH OF PROJECTS FOR OUR
CLIENTS IN THE PAST YEAR.

600 - 1000 Centre St. N
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rogersinsurance.ca The Canadian Design and Construction Report — WINTER 2019-2020 – 11