Webinar - Payment and the Construction Act

Legal and Disputes
1

This topic is for all questions raised on our webinar "Payment and the Construction Act”. If you haven’t already attended it, you can sign up here:- Webinar - Payment and the Construction Act | Built Intelligence

This one-hour webinar will give you an overview of Payment and the Construction Act.

After attending this webinar, you should be able to:

  1. Understand the Construction Act and how it regulates payment
  2. Understand Payment Applications & Notices
  3. Understand Payless Notices
    @Mike_Tiplady
2

If say a Contractor issues no notice and pays less than the sum valued by the Subcontractor, if the Subcontractor has issued no notified sum are they timed out from issuing a notified sum?

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3

Regarding the situation where no Application has been made is there still a requirement for the MC to submit a Payment Notice? I thought this had been amended?

4

Given that both the ‘Payment Notice’ and the ‘Pay Less Notice’ both detail the information required under subsection 3, if a ‘Payment Notice’ is issued late, could it be argued that the ‘Payment Notice’ is the ‘Pay Less Notice’? Or do they each need to be clearly labelled as either ‘Payment Notice’ or ‘Pay Less Notice’

5

Must I certify a payment if the sub-contractor has not submitted their application by the due date as per contract terms?

6

it depends on the terms of the contract but generally I would say no they are not timed out. If they were to issue a payment notice to attempt to create a notified sum then the Main Contractor could then issue a Payless Notice before the Final Date for Payment. The issue of the Payment Notice by the Sub-Contractor after the due date postpones the Final Date for Payment.

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7

Depends on the terms of the Contract but the best thing to do is to issue a Payment Notice. That is how you avoid a smash and grab.

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8

To avoid a smash and grab its always best to issue a Payment Notice. Again it depends on what the Contract requires.

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9

If the contract provides for escalation clauses in relation to dispute resolution procedures, does the right to refer to adjudication at any time under the Construction Act take precedent? @Mike_Tiplady

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10

Liz

Yes it does because the right to adjudicate is a Statutory Right that cannot be contracted out of. I guess there could be an argument that until a dispute has been through the, say, mediation provisions of a contract then the dispute has not crystallised for the purposes of the Construction Act as amended. I don’t think that such an argument would prevail.

Regards

Mike

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13
  1. Question - what is the different between subsection (2) and subsection (3) of section 110A? In the slides, they appears to be exactly similar.
  2. Question - what if the payer in payment notice/payless notice justifies his deduction of amounts from payment application on account of payer’s own claims agains payee which may not be unrelated to original payment application?

@Mike_Tiplady

14
  1. Section 110b - are you saying that there is an obligation to remind the Contractor?
  2. What happens if the subcontractor sends through an application on time, numbers and dates the application correctly and even gives the calculations in detail correctly… however, they do not provide support information, is the contractor obligated to put in the payment notice along the same dates as prescribed in the Act?

@Mike_Tiplady

15

I think that it would depend exactly what your contract requires you to do. The construction act just asks that you set out the basis of the calculation; sub-contracts are often amended to require the sub-contractor to provide further information that just the calculation.

16

subsection 2 is where the payer gives the notice and subsection 3 where the payee gives the notice. Payer being the person making payment and payee receiving payment.