Payment disputes and the Construction Act
The Housing Grants, Construction and Regeneration Act 1996, known as the Construction Act, gives parties to most construction contracts strong payment rights. Homeowner contracts for work on their own homes are generally excluded.
- Payment notices and pay less notices. If the payer fails to issue a valid notice on time, the sum claimed can become the notified sum that must be paid.
- Smash-and-grab and true value adjudications. A payee can adjudicate to recover the notified sum. The payer must generally pay that sum before it can start its own adjudication on the true value of the work.
- The right to suspend work. Where a notified sum is not paid by the final date, the payee can suspend performance after giving at least seven days' notice.
Getting the notices and dates right is often decisive, so we review the contract and the payment cycle first.
Adjudication, arbitration and enforcement
Adjudication is the main way construction disputes are resolved. A decision is normally due within 28 days of referral, extendable by agreement. It is binding unless and until the dispute is decided by litigation, arbitration or agreement.
Where the contract requires it, disputes go to arbitration, which is private and final. If the losing party does not pay an adjudicator's decision, we apply to the Technology and Construction Court for summary judgment, and the court enforces decisions robustly. Arbitral awards are enforced under the Arbitration Act 1996.
Common questions
How quickly can adjudication resolve a payment dispute?
Usually within 28 days of the referral, or a little longer if the timetable is extended. The whole process, from notice to decision, often takes about five weeks.
What if the other side ignores the adjudicator's decision?
We apply to the Technology and Construction Court to enforce it. The court will usually enforce a decision quickly, even if the losing party disputes it.
Do I need to serve a payment notice?
Usually, yes, and the timing is strict. We can review your contract and set out the dates that apply.
In a construction payment dispute? Request a call back using the form, or call 0800 037 1305 (international callers +44 1482 616 616).
