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Is it right to assume that a contractor would have a claim for breach by the employer (under 60.1.18) for the consequences (delay / disruption if proven) for late payment by the employer (other than an interest claim)

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asked Aug 21, 2014 in Payment by anonymous   10 56 82

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This is a slightly tricky question. While there clearly is a breach there is also a contractually prescribed remedy for that breach, interest. The real question is therefore whether interest is a complete remedy in the same way delay damages are. The answer to that is difficult but probably interest is not a complete remedy so a claim for other losses may be possible. The question really is what other losses. Delay could be recovered but if you cannot work without payment then there is the right of suspension under the Construction Act (confirmed as a CE under Y(UK)2.4) and if you don't exercise that right to suspend and just work slower then there will be problems showing the causative link between the failed payment and reduced working, questions of mitigation will also arise. In terms of disruption, a very difficult subject at the best of times, why would a failure to pay create or increase disruption? Questions of mitigation and causation will be central again. So, theoretically a claim may be possible but in reality it will be hard to make out.
answered Sep 30, 2014 by Rob Horne Panel Member (19,700 points)