What does a construction dispute cost a contractor?
A construction dispute is a claim that became a case: a payment, variation, delay or defect the two sides could not settle, decided by adjudication, mediation, arbitration or a court. Across 9,784 adjudication applications in NSW, Queensland and Victoria from 2018 to 2023, claimants were awarded 12% to 35% of what they claimed. Most disputes turn on the record.
How it shows up on a job
It went to a lawyer, and the record for that week is empty.
- A payment schedule arrives late. Under the NSW Security of Payment Act, a schedule not given within 10 business days of the claim makes the full amount payable (s 14(4)).
- A claim is disputed and the window to adjudicate is running: 10 business days under the NSW Act (s 17(3)), 30 business days under the Queensland BIF Act (s 79(2)(b)).
- A variation is disputed and the site record for that week is thin.
- Day works were done without a signed docket.
- An RFI answer changed the scope, and nobody priced it at the time.
What it costs
Party costs, meaning your own lawyers, experts and witnesses, are 83% of what an arbitration costs on average. They are spent whether you win or lose.
Source: ICC, Decisions on Costs in International Arbitration, 2015, p.5Queensland adjudicators released 214 decisions in 2024-25 on claims totalling A$957.0 million, and awarded A$81.9 million: about 8.6 cents in the dollar. One A$634 million claim skews that ratio a long way down.
Source: QBCC Annual Report 2024-25, table 23North American construction disputes took 12.5 months to resolve on average: a year of management time that appears on no invoice.
Source: Arcadis, Construction Disputes in Motion, 2025
What we don't know. No verified figure exists for what a dispute costs a contractor as a share of contract value, start to finish. The evidence comes mostly from large projects that were already in trouble.
Why the published figures disagree
Two things are measured: what a dispute recovers and what it costs to run. Recovery depends on whether the figure counts the claims that never reached a decision: 12% across every NSW application from 2018 to 2023, 51% across the NSW claims decided in 2011-12. The cost of running one is mostly your own lawyers, experts and management time, spent whether you win or lose.
| Figure | What it counts | Sample | Source |
|---|---|---|---|
| 12% NSW, 18% Qld, 35% Vic | Awarded, of the amount claimed, counting applications that never reached a decision | 9,784 adjudication applications, 2018-2023 | Liu (DGA Australia), 2023 |
| 50.9% | Awarded, of the amount claimed, decided claims only | 779 NSW determinations, 2011-12 | NSW Department of Finance & Services, 2012 |
| 14.9% | Awarded, of the amount claimed, decided claims only | 983 Queensland decisions, 2020-21 to 2024-25 | QBCC annual reports |
| 19.2% | The claimant's own cost of adjudication, of the amount claimed | All statutory adjudications at New Zealand's Building Disputes Tribunal, 2003-2023 | Building Disputes Tribunal, 2023 |
| 83% | The parties' own costs, of the total cost of an arbitration | 221 ICC awards, all sectors | ICC Commission, 2015 |
Every published figure on disputes, with its sample and confidence grade: disputes statistics. Every figure, worked through one $5 million job: what the five diseases cost a $5 million job. The full evidence, with every caveat: why the diseases are in this order.
The law behind it, state by state: Security of Payment Act.
How Demiton catches disputes
If the day's record isn't in by evening, you're told which one is missing while people still remember the day.
Your systems stay where they are. Demiton reads them into registers, and these are the ones that watch for disputes:
Common questions
How much does a construction dispute cost?
No verified figure exists as a share of contract value, start to finish. What is measured: a claimant's own cost of statutory adjudication in New Zealand averaged 19.2% of the amount claimed, and the parties' own costs are 83% of what an arbitration costs. The time is a cost too: North American construction disputes took 12.5 months to resolve on average.
What is adjudication in construction?
A fast statutory process under each state's security of payment Act: an adjudicator decides a disputed payment claim in weeks, on the documents. The windows are short: in NSW you apply within 10 business days of a disputed claim (s 17(3)), in Queensland within 30 business days (BIF Act s 79(2)(b)). The decision is binding for now; either side can still take the dispute to court or arbitration later.
How much do you recover in adjudication?
Across 9,784 applications in NSW, Queensland and Victoria from 2018 to 2023, adjudicators awarded 12%, 18% and 35% of the amount claimed. That counts the roughly 40% of applications that never reached a decision. On the NSW claims that were decided in 2011-12, the award was 50.9% of the amount claimed.
What happens if you don't respond to a payment claim?
Under the NSW Security of Payment Act, if no payment schedule is given within 10 business days of the claim, the full claimed amount becomes payable (s 14(4)). Queensland's BIF Act gives 15 business days (s 76).
What evidence wins a construction dispute?
A record made at the time: the site diary entry for the day, a signed day works docket, the written confirmation of a verbal direction, and the RFI answer with the date it changed the scope. GC21 requires day works recorded on the day they occur (Schedule 8), and the TMR Transport Infrastructure Contract requires a verbal direction confirmed in writing within 10 business days (cl 33.1(f), (g)). A record written after the dispute starts carries less weight than one written when the work happened.
How does Demiton catch disputes?
If the day's record isn't in by evening, you're told which one is missing while people still remember the day. It reads the systems you already run, so nothing is replaced.