Payment failures are driving South Africa's construction disputes

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20-05-2026
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A review of adjudication cases handled by construction law specialist MDA Attorneys indicates that payment failures have become the dominant source of construction disputes, overtaking the extension of time and variation claims that were common in the past.

The pattern emerges from MDA's own caseload, in which claims for payment of outstanding monies or incorrect certification represented the single largest category of disputes referred to adjudication in the firm's adjudications. Claims for extension of time and time-related costs came second. MDA Attorneys' data covers adjudications in which MDA represented one of the disputing parties or acted as adjudicator.

Euan Massey, director at MDA Attorneys, says there has been a shift in the nature of disputes being referred to adjudication. “Although payment disputes have always been prevalent, a seemingly more active construction sector is not translating into timely payment. Consequently, adjudication cases, involving claims for payment under the contract, are rising. Although this is more readily the case with public sector contracts, it is also a trend which is growing in the private sector. This should be a concern for anyone involved in procuring or financing construction projects.” 

MDA Attorneys handled 31 adjudications resulting in decisions in 2025, continuing a recovery from a low point in 2023. The growth aligns with an increase in the number of construction projects taking place, with more projects naturally generating more disputes.

Beyond straightforward non-payment, MDA's data identifies inadequate contract administration, including non-response to claims and variations, as a recurring cause of disputes, alongside ambiguous contract terms and incomplete tender information. Taken together, these causes suggest that many disputes are not the product of legal complexity, but avoidable administrative failures.

In employer-versus-contractor disputes that proceeded to a decision, contractors prevailed in most cases, a pattern MDA says is consistent with contractors being the typical referring party. In contractor-versus-subcontractor matters, contractors won all decided cases. 

Notably, the number of adjudications settled during the process is rising. “Settlement during adjudication was rare in the past, so this is an emerging trend,” says Massey.

The NEC suite of contracts has consistently produced the highest number of disputes in MDA's caseload, a trend that continued in the most recent period, followed by JBCC and FIDIC. “This likely reflects the NEC's widespread use on large public and infrastructure projects and the contract’s differing approach to dispute resolution, rather than any particular deficiency in the contract itself,” explains Massey.

Less than 1% of the adjudications involved a formal hearing, reinforcing the trend away from in-person proceedings that has developed as the industry has grown more comfortable with the process. The data also showed that adjudicators charged R2 500 per hour or less in the majority of cases, with engineers the most common professional background among adjudicators. 

Submitted by MDA Attorneys