Adjudication, mediation and arbitration in Canada

When negotiation fails, the parties need another way to resolve the dispute. In Canada the options now include statutory adjudication in most jurisdictions that have adopted prompt payment legislation, alongside mediation, arbitration and the courts. This lesson covers adjudication, mediation and arbitration; lesson 11 covers litigation, expert evidence and public-sector disputes. CON-220 lesson 12 introduced these processes in outline; here the focus is on how they work in practice on a claim like Ashford's, and how to choose between them.

Modern standard contracts arrange the processes as a ladder: the parties try the cheaper, faster and more cooperative steps first and move to binding, adversarial processes only if those fail. Knowing the ladder in the contract, and its deadlines, is part of claim management.

Statutory adjudication in Canada

Adjudication is a fast, interim-binding decision by a qualified adjudicator, usually within weeks. It was introduced to keep money flowing down the construction pyramid while disputes are resolved: the decision must be complied with now, but either party can later have the dispute decided finally by arbitration or a court. As of 2026, the status of adjudication across Canada is uneven.

Ontario's model is the most developed. Before the 2026 amendments, adjudicable matters included valuation of services and materials, payment under the contract including change orders whether approved or not and proposed changes, set-off, notices of non-payment and holdback; from January 1, 2026, the scope is broader and includes disputes over scope of work, contract price changes and extensions of time. A party may start adjudication during the contract and, under the amended Act, within 90 days after completion, abandonment or termination. Adjudicators are drawn from a roster maintained by ODACC, the authorized nominating authority, or since 2026 may be private adjudicators who meet prescribed qualifications. The timelines are short.

# Ontario adjudication timeline for Kestrel Ridge's fill change payment dispute
# Day counts as commonly summarized for Ontario's Construction Act; check the Act and regulations.
from datetime import date, timedelta
notice = date(2025, 9, 15)                       # notice of adjudication delivered
agree_by = notice + timedelta(days=4)            # adjudicator must agree to act
asked_ana = agree_by                             # no agreement, so the authorized nominating authority is asked
appointed = asked_ana + timedelta(days=7)        # ANA appointment deadline
documents = appointed + timedelta(days=5)        # claimant delivers contract and documents
determination = documents + timedelta(days=30)   # determination deadline (extendable)
payment = determination + timedelta(days=10)     # payment due after determination
for step, d in [("Adjudication notice delivered", notice), ("Adjudicator agreement deadline", agree_by),
                ("Appointment by ANA", appointed), ("Documents delivered", documents),
                ("Determination due", determination), ("Payment due", payment)]:
    print(f"{step:<32} {d:%a %d %b %Y}  day {(d - notice).days}")

Adjudication notice delivered    Mon 15 Sep 2025  day 0
Adjudicator agreement deadline   Fri 19 Sep 2025  day 4
Appointment by ANA               Fri 26 Sep 2025  day 11
Documents delivered              Wed 01 Oct 2025  day 16
Determination due                Fri 31 Oct 2025  day 46
Payment due                      Mon 10 Nov 2025  day 56

Kestrel Ridge's fill change balance of $62,400 is a good candidate for adjudication: a payment dispute about the valuation of a change, with records that fit in a binder. The claimant must have its documents ready when it gives notice, because it has only days to deliver them once the adjudicator is appointed; the respondent typically has even less time to answer. The adjudicator's determination binds the parties on an interim basis: the city must pay within 10 days unless it obtains a court order, but either party may later have the matter decided by arbitration or court. Determinations can be challenged in court only on narrow grounds by judicial review. Under the amended Act, adjudicators can rule on their own jurisdiction, and objections must be made at the earliest opportunity.

Adjudication is not suited to everything. A large delay and disruption claim like the whole Ashford claim, with schedule analysis, expert evidence and thousands of documents, can be adjudicated where the statute allows, but the adjudicator has weeks rather than months, and the process favours the party that has prepared. Respondents sometimes describe being 'ambushed' by a claimant that has spent months preparing a submission and served it with a few days' notice. A contractor should keep its claims in a state that could be adjudicated quickly; an owner should keep its records in a state that can answer one.

The contract's internal steps

CCDC 2-2020 Part 8 sets out a stepped process. A dispute is first referred to the Consultant for a finding, under the contract's provisions for determinations by the Consultant. If a party disputes the finding, the parties negotiate in good faith, then go to mediation under CCDC 40 Rules for Mediation and Arbitration of Construction Disputes unless they agree otherwise, and then, if they agree, to arbitration under those rules or a court. The prompt payment statutes override contract terms that would prevent adjudication, so on an Ontario project adjudication is available alongside Part 8. Check the edition and any supplementary conditions, because owners often amend Part 8.

These steps are often time-limited. Missing a deadline to dispute a decision may make it final. A party should diary every deadline as soon as a decision is received, as lesson 3 recommended for notices.

Mediation

Mediation is facilitated negotiation. A neutral mediator, chosen by the parties, helps them reach their own settlement. The mediator has no power to decide. Mediation works because it brings decision makers together for a fixed day or two, with a neutral who can carry offers between rooms, test each side's assumptions privately and suggest options neither side would propose openly.

Construction mediators are often experienced construction lawyers, retired judges or senior industry figures. An evaluative mediator gives views on the merits; a facilitative mediator concentrates on the process. Most construction mediations combine both. A party should go to mediation with its decision tree done, a negotiating range authorized and a decision maker present. Settlement rates in construction mediation are high, though published figures vary.

Mediators in Canada are often members of the ADR Institute of Canada (ADRIC) and its regional affiliates, which also publish mediation and arbitration rules. Mediation is confidential by agreement and by the mediation rules, and settlement privilege also applies.

Arbitration

Arbitration is a private, binding process in which one or three arbitrators chosen by or for the parties hear evidence and make an award that can be enforced like a court judgment. Its advantages over court are choice of decision maker (construction-literate arbitrators), privacy, flexibility of procedure and, internationally, ease of enforcement. Its disadvantages are cost (the parties pay the arbitrators and the venue), limited appeal and the difficulty of joining other parties such as subcontractors and consultants unless all have agreed.

In Canada, domestic arbitration is governed by provincial arbitration acts, for example Ontario's Arbitration Act, 1991, and international arbitration by statutes based on the UNCITRAL Model Law. Rights of appeal are limited and can often be excluded by agreement; courts generally defer to arbitral awards following the Supreme Court of Canada's approach in cases such as Sattva Capital Corp. v. Creston Moly Corp., 2014 SCC 53. Common rules include CCDC 40 for CCDC contracts and the ADRIC Arbitration Rules. Arbitration under CCDC 2 Part 8 requires the parties' agreement, so many disputes on CCDC projects still go to court.

Arbitration is not automatically cheaper or faster than court. A large construction arbitration with three arbitrators, document production, multiple experts and a hearing of several weeks can cost each party hundreds of thousands of dollars or more and take well over a year. Its value lies more in the expertise of the tribunal and confidentiality than in savings. Managing cost is the parties' responsibility: limit document production, agree on joint or concurrent expert evidence, and use written witness statements.

Choosing the route

Preparing for a hearing

Whichever process is chosen, preparation follows the same pattern: a clear statement of the issues, a chronology tied to records, witness statements from the people who were there, expert reports where needed, and a short written argument. In adjudication the whole package must be ready before notice is given; in arbitration it is built over months under a procedural timetable agreed at a first procedural meeting.