Dispute resolution partner Amanda Burge discusses payment provisions in Construction Law

In her article ‘More pay less confusion’  in Construction Law, dispute resolution partner Amanda Burge reviews recent court decisions concerning the vexed issue of payments and pay less notices.

More attention to contract administration will be needed until the courts clarify the position further in this area of construction law.

Key points

  • The payment provisions have proved a useful method of ensuring sums are paid to enable projects to progress
  • But they have also led to ‘smash and grab’ adjudications, technical claims for monies due under the payment notice based on the failure to serve a pay less notice
  • There now appears to be an artificial distinction between interim payment notices and final accounts
  • A contractor can have the benefit of sums in the interim to which it is not entitled
  • An employer risks losing those sums altogether if the contractor goes insolvent before determination as to the true value of the works
  • If a contract administrator fails to serve the pay less notice in the requisite form at the right time, the employer could bring a professional negligence claim against him or her for any costs incurred and interest on the sums in excess of the true value of the works

See the full article for further explanation on payment provisions and a summary of recent key cases on the issue:

Construction Law (April 2016): More pay less confusion