Question 1

Can a pay less notice be challenged?

Accepted Answer

Yes, in some circumstances. A pay less notice may be challenged if there are issues with timing, content, calculation, service or compliance with the contract and statutory payment mechanism. The Construction Act payment provisions are strict, and recent TCC decisions continue to consider whether payment and pay less notices are valid.

The starting point is always the contract, the payment dates, the notice provisions and the documents actually served.

Question 2

What is a pay less notice?

Accepted Answer

A pay less notice is a notice stating that the payer intends to pay less than the notified sum. It usually needs to state the sum considered due and the basis on which that sum is calculated. The timing requirements are critical, and the Construction Act requires compliance with the contract or statutory mechanism.

If a pay less notice is late, unclear or unsupported, it may be open to challenge.

Question 3

What happens if no payment notice is issued?

Accepted Answer

If the payer does not issue a payment notice when required, the payee may be able to rely on its own application or issue a default payment notice, depending on the contract and statutory mechanism. Section 110B of the Construction Act deals with payee notices in default of payer notices.

This is highly date sensitive. The due date, final date for payment and notice timetable need to be reviewed carefully.

Question 4

Can retention be withheld?

Accepted Answer

Retention can usually only be withheld where the contract allows it and where the conditions for withholding or release have not been satisfied. Common issues include practical completion, defects, making good obligations, release dates and whether the withholding has a proper contractual basis.

The UK Government has also been consulting on and progressing late payment and retention reform, so this is an area to keep under review.

Question 5

What can I do if my application is under certified?

Accepted Answer

You should review the payment notice, valuation breakdown, contract payment mechanism, records, measured work, variations, dayworks and any deductions. Under certification is often challenged by showing what was applied for, what was certified, why the reduction is disputed and what evidence supports the sum claimed.

Where the dispute cannot be resolved commercially, adjudication may be available under the Construction Act.

Question 6

Can unpaid variations be recovered?

Accepted Answer

Yes, but recovery depends on the contract, instruction route, notice requirements, valuation rules and evidence. Problems often arise where work was instructed informally, through drawings, RFIs, site discussions or design development, but not properly recorded as a variation.

The key is to establish instruction, entitlement, valuation and supporting records.

Question 7

What happens if contractual notices are missed?

Accepted Answer

Missing notices can create serious entitlement problems, especially where the contract contains time bars or conditions precedent. The effect depends on the exact wording of the contract, the facts, the correspondence and whether any arguments remain available.

You should not assume entitlement is lost without reviewing the contract and records, but missed notices need urgent attention.

Question 8

What makes a strong extension of time claim?

Accepted Answer

A strong EOT claim usually needs a clear delay event, contractual entitlement, notice compliance, programme impact analysis, causation evidence and contemporaneous records. It should explain why the event affected completion or the critical path, not just that delay occurred.

The strength of the claim depends on the contract, programme status, records and delay analysis method.

Question 9

Can LADs be challenged?

Accepted Answer

Yes, LADs can sometimes be challenged where there is a valid extension of time entitlement, employer prevention, incorrect delay analysis, defective notices, contractual issues or other factual disputes.

However, LAD exposure is contract specific and can become significant quickly. The safest approach is to review the contract, delay events, notices and programme evidence early.

Question 10

When should subcontractors consider adjudication?

Accepted Answer

Adjudication should be considered where a payment, valuation, final account, retention, delay or entitlement dispute cannot be resolved commercially and a fast binding decision is needed. Under the Construction Act, a party to a construction contract has the right to refer a dispute to adjudication, and the adjudicator is generally required to reach a decision within 28 days of referral unless extended.

Before starting, the dispute, evidence, contract route and commercial objective should be carefully assessed.

Question 11

What is a smash and grab adjudication?

Accepted Answer

A smash and grab adjudication is an informal term often used for an adjudication seeking payment of the notified sum where the payer failed to issue a valid payment or pay less notice. The terminology is common in industry commentary, but the actual position depends on the Construction Act, the Scheme, the contract and the notices served.

These disputes are highly technical and date driven.

Question 12

What records should subcontractors keep?

Accepted Answer

Subcontractors should keep clear records of instructions, drawings, RFIs, notices, applications, valuations, payment notices, pay less notices, site diaries, labour records, programmes, progress photographs, emails, meeting minutes and cost records.

Most payment, variation, EOT and adjudication disputes turn on evidence. Good records make it easier to prove entitlement, causation, delay and value.

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