Unpaid applications, pay less notices you don’t agree with, contra-charges and final accounts that drag on. Under the Construction Act you can refer a dispute to adjudication at any time and get a decision in weeks, not years. We help subcontractors and contractors use that right well, and often settle before it is needed.
Most payment disputes are won or lost on four dates in the contract: the application date, the due date, the final date for payment and the deadline for a pay less notice. If you are not sure what yours are, that is the first thing we check.
Most contracts for construction operations in England, Wales and Scotland are covered, whether they are written, partly written or oral. There are exceptions. Contracts with a residential occupier are excluded, and so is some plant installation work on sites where the main activity is power generation, water treatment or process industry. Energy projects can fall partly inside and partly outside the Act, so it is worth checking before you rely on it.
Once a notice of adjudication is served, the dispute must be referred to the adjudicator within seven days. The adjudicator then has 28 days to reach a decision. That can be extended by 14 days if the referring party agrees, or for longer if both parties agree. Without an extension, you have a decision about five weeks after the notice.
It is the payer’s notice that it intends to pay less than the sum due, with the basis for the lower figure. It must be given by the deadline in your contract before the final date for payment. Under the Scheme for Construction Contracts that is seven days before; JCT contracts usually set five. Miss it, and the payer must normally pay the notified sum in full and argue about the true value afterwards.
If the payer does not issue a payment notice on time, your application (or a notice you serve in default) usually becomes the sum due. Unless a valid pay less notice follows, it must be paid by the final date for payment. The courts have confirmed that the payer has to pay that sum before it can start an adjudication over the true value of the work.
Each party normally pays its own legal and consultant costs, win or lose. The adjudicator decides who pays their fees, usually the losing party. Clauses that try to make the referring party pay everything regardless of the outcome are generally ineffective under the Act.
It is binding and must be complied with straight away, but it is temporary: either party can have the dispute finally decided in court, by arbitration or by agreement. The courts enforce decisions quickly and refuse only in narrow cases, such as where the adjudicator had no jurisdiction or there was a serious breach of natural justice.
Send us one live problem, whether it is a payment notice, a claim, a delay or a dispute, and we will tell you where you stand and what to do next. No charge and no obligation.
