Why do you need an Independent Expert Construction Valuation – 3 Good Reasons

The 3 reasons below are all too real but unfortunately for most Contractors in Australia, they simply have not been advised of this and are unaware of the need for an Independent Expert Construction Valuation.  

Instead they go it alone only to end up in the statistics pile of the historic failure rates in Adjudication, where on average they receive only 1/3 of the value they claim for on claims of significant value. See more about this at “Valuations for Statutory Adjudications”

Firstly:

If you are considering going to Adjudication then you will need a proper Construction Valuation of the works because it is a legal means of claiming for monies owed. Simply saying someone owes you money and then providing your own calculations of that amount is usually seen as lacking in legal substance (evidence) meaning that you are unlikely to succeed with your claim. 

However an independent Expert Construction Valuation is an accepted legal means for evidencing that you have done the work you claim has been done, as well it being worth the amount you say it is.  

Remember the Adjudicator always looks first and foremost at the credibility (believability) of your claim and so if your Construction Valuation is done by someone not connected to you and in a professional manner, then that will normally get the ball rolling in your favour. 

Secondly:

The reason why an Adjudicator would look to the Contractor to provide an Independent Construction Valuation is because in all Australian states (except for WA & the NT) the Security of Payments Acts (that provides for the Adjudication process) does not provide any facility for the Adjudicator to use Experts to assist them in making sure there decisions are correct. 

This is a major short-coming of the system of Adjudication in Australian that many Contractors still don’t know about – Adjudicators unfortunately still have no requirement under the Security of Payments Acts to be trained in Construction Valuation and only need to have some form of relevant experience in the Construction industry to practice as an Adjudicator?

In contrast, this shortcoming has been recognized in the U.K, New Zealand and Singapore where Experts in Construction Valuation can be used  to ensure the decisions regarding valuation are correct.

Thirdly:

Under the Security of Payment Acts and as consistent with legal principles any decision made by an adjudicator must be used in any subsequent adjudication for issues related to the same project. This means that any errors in the assessment made by the Adjudicator will go uncorrected in subsequent adjudications (regardless of the Adjudicator chosen), unless you can have the decision reviewed. However in all Australian states, the decision of the Adjudicator can be requested to be reviewed for ‘a material miscalculation of figures’. 

So where an Independent Expert Construction Valuation has been done for the works at the time of completion of those works and has been provided to the Adjudicator in the case who may have either ignored or not considered it properly, this can be a compelling (reasoned or convincing) argument for a review of your case. In absence of an Independent Construction Valuation, it is very difficult to see how a Contractor would be able to show ‘a material miscalculation of figures’.

This is especially relevant if the matter needs to be taken further up the chain (to the courts or in arbitration), where the decision of the Adjudicator is unlikely to be reversed in those forums without reliable evidence to prove that a significant error in quantum was made by the Adjudicator. 

Therefore:

In order to greatly increase your chances of success in any Adjudication, it is recommended best practice to have an Independent Expert Construction Valuation done and submitted as part of the documents for your case.