No longer confined to large-scale disputes, adjudication has surged in use across the construction industry, offering a rapid and structured process for resolving payment claims. While adjudication is intended to provide swift resolution and relieve cashflow pressures for claimants, an unexpected application can just as easily disrupt your own cash flow, strain relationships, and divert critical project resources.

Recognising the early warning signs allows contractors, subcontractors, and principals to stay one step ahead—responding strategically, managing risk, and in some cases, avoiding escalation altogether.

Here’s what to watch for before an adjudication lands on your desk.

1. Escalating Payment Disputes

The clearest warning sign is usually a dispute over payment claims. A discrepancy between the payment and payment schedule is the foundation for an adjudication application.

Typically, a payment claim has been issued, you have responded with a reduced or nil payment schedule, and the claimant disputes the reasons you have given for withholding or reducing payment

Once negotiations have shifted from cooperative to positional or unproductive, the risk of adjudication increases significantly.

2. Re-enlivening Old Variation or EOT Claims

Be alert when a party starts reviving earlier variation or extension of time (EOT) claims that were thought to be settled or time-barred. This can include re-submitting or re-pricing old variations, re-packaging previously rejected claims as new claims, or bundling historical EOTs into a new payment claim. These actions often signal an effort to aggregate unresolved issues and build a foundation for a comprehensive adjudication application.

3. A Surge of New Variations or EOTs

A sudden escalation in variation submissions or EOT requests, especially toward the end of a project, can signal that a dispute is heading to adjudication. This behaviour often indicates that a party is consolidating its position, building a documentary trail, and recording all potential entitlements in preparation for adjudication. Even if such claims appear overstated or speculative, they should not be dismissed as they are intended to strengthen the perceived quantum or delay basis of a forthcoming payment claim and each submission may become a disputed claim in an adjudication.

4. Sudden Use of Formal or Legal Language

When correspondence shifts from collaborative to combative, it’s time to take notice. Phrases like “we reserve our rights,” “pursuant to section [??] of the Act,” or “within the prescribed timeframe” suggest a shift towards formal positioning. Similarly, detailed requests for supporting documentation or repeated references to statutory rights often indicate that legal or claims consultants are in the background shaping the groundwork for adjudication.

5. Involvement of External Advisors

When external consultants, contract administrators, or lawyers appear on correspondence, it’s a major red flag. Their involvement generally means the matter is moving beyond commercial negotiation. These professionals are often engaged to assess the claimant’s strategic position, strengthen their prospects in adjudication, ensure procedural compliance, and coordinate supporting evidence.

Bonus Insight: Heightened Risk Near Completion

Disputes often intensify as a project approaches Practical Completion or Occupation Certificate. At this stage, parties are under pressure to close out financial issues, agree on variations, and finalise accounts. If key items remain unresolved or there is tension over entitlement to payment, the likelihood of an adjudication application increases significantly.

Beyond the Top Five: Other Signs to Watch

A handful of other warning signs can also point to growing adjudication risk:

1. Changes in site behaviour, particularly reduced cooperation or refusal to agree to reasonable variations.
2. A lack of communication after a payment schedule can signal that a party is quietly redirecting resources toward preparing an adjudication application before the statutory deadline.
3. Direct statements or threats about “taking it to adjudication”

Don’t Wait – Respond Proactively

If you suspect an adjudication application may be on the horizon:

1. Assess your exposure – Identify which claims, variations, or payment schedules are likely to be targeted and ensure they are defensible.
2. Evaluate your project position strategically – Consider the commercial, contractual, and relationship impacts before taking a hard stance. Sometimes early negotiation or partial settlement can avoid unnecessary escalation.
3. Seek professional guidance early – A construction dispute consultant or lawyer can help you prepare a defensible response, manage timeframes, and develop a tactical approach.
4. Maintain compliance and communication – Continue issuing payment schedules and notices properly, even they appear invalid, and document all discussions and agreements contemporaneously.

Don’t wait for an adjudication to land before taking action. Spotting the signs early allows you to manage risk, protect your position, and respond on your terms. Awareness, preparation, and early engagement are your best defences.