Interim Adjudication for Ontario Construction Disputes

Interim adjudication is one of the newer features of Ontario’s Construction Act, 2019, introduced alongside the prompt payment regime as a way to resolve certain construction disputes quickly, without waiting for a full court claim or arbitration to run its course. An adjudicator — a qualified, independent decision-maker — reviews the dispute and issues a written determination within a short, legislated timeline.

The defining feature of adjudication is that its decision is binding on an interim basis. The parties must comply with the adjudicator’s decision right away, but either side can still pursue the same dispute through court or arbitration afterward for a final, non-interim resolution. In practice, many disputes end at the adjudication stage because the parties accept the outcome, but the legal door to further proceedings doesn’t close.

Adjudication was introduced specifically to address a gap the old Construction Lien Act left open: that Act gave parties strong security tools, like liens and holdback, but didn’t provide a fast way to actually resolve a payment disagreement in the moment. Adjudication fills that gap by pairing the prompt payment timelines with a correspondingly fast decision-making process, so a dispute over an invoice doesn’t have to sit unresolved for the months or years a court claim might otherwise take.

Adjudication under the Construction Act isn’t a general dispute-resolution venue for every disagreement that arises on a project — it’s generally limited to specific defined categories. These commonly include the valuation of services or materials provided under a contract, disputes about payment under a contract or subcontract, disagreements over a proper invoice or a notice of non-payment, and certain other issues the Act or the contract designates as adjudicable.

Disputes that fall outside these categories — for example, some types of deficiency or negligence claims disconnected from a specific payment — may not be suited to adjudication and would instead generally need to proceed through a conventional court claim, arbitration, or another process. Figuring out whether a given dispute actually fits within the adjudicable categories is often the first practical question before starting the process.

A contract can also designate additional matters as suitable for adjudication, within the framework the Construction Act allows, which means the exact scope of what can be adjudicated on a given project may depend partly on the contract’s own terms in addition to the statutory baseline categories. Reading the dispute resolution section of the actual contract is generally the most reliable way to confirm what applies.

Adjudication is generally commenced by delivering a written notice of adjudication to the other party, setting out the nature of the dispute and proposing (or naming) an adjudicator. If the parties can’t agree on who should decide the dispute, an adjudicator is appointed through an authorized nominating authority — a body recognized under the Construction Act that maintains a roster of qualified, registered adjudicators.

Once appointed, the adjudicator generally sets a short timeline for each party to submit its documents and arguments, and the adjudicator is typically required to issue a determination within a defined statutory period — commonly around 30 days from when the matter is referred, subject to extension if the parties agree. This is a fraction of the time a comparable dispute would typically take to reach a decision through the court system.

The adjudicator’s fees are generally shared between the parties unless the adjudicator decides otherwise, and the process is designed to be proportionate to the size of the dispute rather than mirroring the cost structure of full litigation. Parties can still retain legal help to prepare submissions, but the shortened timeline and narrower scope generally keep the overall process more contained than a comparable court proceeding.

It can seem unusual that a decision is both “binding” and “interim” at the same time, but this combination is central to how adjudication functions. The parties must comply with the adjudicator’s determination immediately — for example, paying an amount the adjudicator finds owing — and non-compliance can expose a party to enforcement measures, since the decision is enforceable on its own terms.

At the same time, the decision doesn’t permanently foreclose the dispute. Either party can still bring the same issue to court or arbitration later for a final determination, and that later decision can confirm, modify, or overturn the adjudicator’s result. In practice, this structure is meant to get money moving and disputes resolved quickly in the moment, while preserving the parties’ right to a full, final resolution if either side still wants one.

This interim-but-binding quality is a deliberate trade-off. It sacrifices some of the finality that court or arbitration provides in exchange for speed, on the theory that getting a reasonably fast, provisional answer is often more useful to a cash-strapped contractor or subcontractor than waiting years for a fully final one. For many smaller and mid-sized disputes, the interim decision ends up being the only decision anyone ever needs, simply because neither side pursues the matter further afterward.

Mediation is a voluntary, facilitated negotiation — a neutral mediator helps the parties try to reach their own settlement, but there’s no binding decision if they don’t agree. Adjudication is different because it produces an actual decision, imposed by the adjudicator, regardless of whether the parties agree with it.

Arbitration generally produces a final, binding decision that’s hard to appeal, but it follows a more formal process that can still take considerable time and expense, more closely resembling a private trial. Adjudication is faster and narrower in scope, built specifically for the kinds of payment and valuation disputes the Construction Act identifies, and its result remains open to being revisited through a later, final process.

Litigation through the courts is the most formal and generally slowest option, though it also offers the broadest scope and the most established procedural protections. For context on how a conventional construction dispute might otherwise be pursued, see our article on homeowner-contractor disputes.

Adjudication tends to be most useful where cash flow is the immediate concern — for example, a payment dispute connected to prompt payment timelines, where waiting months or years for a court decision would defeat the purpose of having a fast remedy at all. It’s generally less suited to complex, multi-issue disputes that don’t fit neatly within the Construction Act’s defined categories.

Adjudication also exists alongside, not instead of, other tools under the Construction Act, including construction liens and holdback. Depending on the situation, a party might use more than one of these tools together — for example, preserving a lien to protect a claim while also referring the underlying payment dispute to adjudication for a faster interim result. Deciding which combination of tools makes sense for a given dispute generally depends on the amount involved, how urgent the cash-flow need is, and whether the underlying disagreement actually fits the specific categories adjudication covers.

For more on the construction hub generally, see the construction insights hub, or our tools and checklists. This is general information about how adjudication generally works in Ontario, not an assessment of whether a specific dispute qualifies for the process.