Adjudication can get you paid

As everyone is now well aware, following the correct valuation process for payments due under a construction contract is critical.  If you fail to follow the correct procedure then the paying party can often end up having to pay monies that it does not believe are due.

If a paying party does not follow the correct procedure then the quickest way to obtain payment is to refer a dispute to adjudication.  We have recently been instructed on a number of cases where contractors or subcontractors have not been paid and there have been allegations that the works are defective.  Our clients have always denied that the works were defective and that the paying parties were simply trying to avoid payment for various reasons.  The paying parties had not followed the correct procedure for calculating payments that were due.  This meant that, by default, sums that had been claimed by our clients were due. 

Our approach is to promptly issue adjudication proceedings.  Once these are served and adjudicators appointed, the paying parties often pay our client what was claimed because their lawyers have advised that they would lose the case should it go to adjudication.  We have had several examples where the adjudication has not proceeded due to such legal advice. 

On one occasion however, the paying party obtained some very poor legal advice on the dispute.  That paying party lost the adjudication but still did not pay; this led to enforcement proceedings in the Technology and Construction Court, where we obtained summary judgment and costs were awarded against the paying party on an indemnity basis. 

Our advice to clients is to act promptly when payments have not been made.  If necessary, issue adjudication proceedings to force payment that should have been made; it is also best to obtain specialist construction advice as this area of law is different to general contract law and if your lawyer is not experienced, costly errors can be made.

Please contact Peter Allen for more advice on how adjudication could help your business.

Peter Allen
01245 453813
[email protected]