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Don't forget your Payment Notice(s) if you want to avoid an Adjudication that you will probably

Since the Housing Grants, Construction & Regeneration Act 1996 (“HGCRA”) came into force in England & Wales on 1 May 1998, a party to a Construction Contract has had the right to launch an Adjudication of a dispute arising under that Construction Contract at any time, and that statutory right cannot be lost or given up by contract or otherwise. A Construction Contract is a defined term that includes most contracts you would expect it to, apart from those where there is a residential occupier.

Adjudications are a form of fast-track (28 days) rough justice and the Adjudicator’s Decision is usually enforceable straightaway, leaving the losing party either to go off and launch litigation or arbitration to try and get a different outcome to that dispute (if they are prepared to commit the considerable cost and time of doing so), or start their own Adjudication of a different issue because the same issue cannot be adjudicated twice.

The most common dispute run via Adjudication is a contractor non-payment dispute, ie a contractor claims that it has not been paid its interim or final account either at all or in the correct amount. The most frequent basis for making that claim, is that the employer has not served the correct statutory payment notice(s) on time each interim period (eg each month) or at the final account stage. In that situation there is a default entitlement of the contractor to be paid everything that it has claimed for that period or as its final account. These payment rights are also in the HGCRA.

This is usually an easy win for the contractor and one that has nothing to do with whether there are in fact works that warrant payment for. It is just a technical procedural point about notices. So don’t make a Contractor’s life too easy.

About the Author: Tim Seal is a specialist Construction Disputes Solicitor. He is experienced in all forms of domestic dispute resolution including Litigation (up to the Court of Appeal), Arbitration, Adjudication, Mediation, Dispute Board and Expert Determination. Tim is also experienced in International Arbitration.

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