The deadlines the Construction Act sets for a payment notice, a pay-less notice and an adjudicator's decision, and what happens if a payer misses one.
Most construction contracts fall under the Housing Grants, Construction and Regeneration Act 1996, called the Construction Act in the industry. It fixes the notices each side must serve, by when, and gives either side the right to a binding decision inside 28 days if a dispute remains once the notices are done. Missing one of its notices decides who is owed what, before anyone looks at the value of the work.
Sections 104 and 105 define a 'construction contract' broadly: an agreement to carry out construction operations, or to arrange for someone else to carry them out, covering most building, civil engineering and installation work. Section 106 excludes a contract with a residential occupier — one that mainly relates to work on a dwelling that a party to the contract occupies, or intends to occupy, as their home.
A contract does not need to be in writing. Section 107, which once limited the payment and adjudication provisions to written contracts, was repealed from 1 October 2011. An order confirmed only by email, or varied on site in conversation, is still within the Act, and the Scheme for Construction Contracts supplies any term the parties did not agree in writing.
Two dates matter, and they are different dates. The due date is when a sum becomes payable under the contract's own payment mechanism, usually set against an application, a valuation or an interim certificate. The final date for payment is the deadline for actually paying it, set as a stated number of days after the due date.
Where the contract does not fix that period, the Scheme for Construction Contracts supplies 17 days after the due date. Read your own contract first — many standard forms set a shorter period, commonly 14 days.
Within 5 days of the due date, section 110A requires the payer, or whoever the contract names to do it, to give the payee a notice stating the sum considered due and how it was worked out. Several standard forms make the payee's own application serve as this notice automatically if the payer does not respond, so check which model your contract uses before assuming none exists.
Section 110B lets the payee step in. Once the 5-day deadline for the payer's notice has passed unpaid, the payee can serve their own notice stating the sum claimed and its basis. Serving one moves the final date for payment back by the same number of days the notice is late, so a payee who waits three weeks to serve a default notice pushes their own final date for payment back by three weeks on the same application.
Where the contract already lets the payee notify the sum expected before the original deadline — many applications under standard forms do exactly that — the application itself stands as the default notice, and nothing further has to be served.
Section 111 is where most payers who get this wrong lose the argument. A payer who wants to pay less than the notified sum must serve a notice of intention to pay less, stating the sum they consider due and the basis for the lower figure, by the deadline the contract sets.
Where the contract is silent, the Scheme supplies 7 days before the final date for payment. Miss that deadline and the notified sum becomes payable in full: section 111 removes the right to withhold any part of it once the final date for payment has passed without a valid notice, whatever the payer's view of the work actually done.
Illustrative, using the Scheme's default periods, which apply only where the contract does not set its own. With neither notice served, the £18,400 cannot be reduced, whatever dispute is raised afterwards.
Section 108 gives a party to a construction contract the right to refer a dispute to adjudication at any time, including a dispute about a payment notice or a pay-less notice. The adjudicator must reach a decision within 28 days of referral, extendable by up to 14 days with the consent of the party who made the referral, or by a longer period with the agreement of both sides.
The decision binds both sides straight away and is enforceable through the courts, even though either side can still ask a court or an arbitrator to decide the dispute afresh later. A business can run its own adjudication, or use a surveyor or consultant to do it: adjudication is not a reserved legal activity.
A losing party who does not pay a sum an adjudicator has ordered can be made to through the courts, by an application to enforce the decision. Issuing that application is conducting court proceedings, a reserved legal activity carried out by AD Solicitors (SRA no. 8011228). Preparing the adjudication referral itself is not reserved, and that is the stage Buzz Legal can act on directly. See taking a customer to court for how an undefended court application proceeds.
Establish four things before deciding whether an unpaid application is a genuine dispute or a missed notice.
If the notices check out and a genuine dispute about the value of the work remains, adjudication or a County Court claim are the routes; see writing a letter before action for the step before either. Retention held back under the contract, and materials supplied under a retention of title clause, are covered on the construction and trades page.
Yes, since 1 October 2011. Section 107, which once confined the payment and adjudication provisions to contracts in writing, was repealed from that date, so an order confirmed by email, agreed on the phone, or varied on site in conversation is within the Act in the same way a fully signed contract is. Where the parties did not set a term in writing — a payment period, for instance, or the adjudication procedure — the Scheme for Construction Contracts supplies the missing term by default. Check what, if anything, was actually agreed in writing before assuming a verbal instruction falls outside the Act.
The payee can serve a default notice of their own under section 110B, once the payer's 5-day deadline has passed unpaid, stating the sum claimed and how it was calculated. Serving it shifts the final date for payment back by the number of days the notice is late, so there is a cost to waiting as well as a right to act. Many standard-form applications already satisfy section 110B automatically, because the contract lets the payee's own application stand as the default notice from the outset. Check which model your contract uses before serving a notice that may already exist.
No. The deadline is fixed by the contract, or by the Scheme's default of 7 days before the final date for payment where the contract is silent, and a notice served after it has no effect under section 111. The payer's only route at that point is to pay the notified sum and raise the valuation dispute separately, including by adjudication. A notice that arrives on time but understates its reasoning can still be challenged on its contents, so a late notice and a defective notice are not the same problem and do not have the same fix.
Yes. Section 108 lets either party refer any dispute under the contract to adjudication, including whether a payment notice or a pay-less notice was valid, served in time, or correctly calculated. An adjudicator deciding that a pay-less notice is invalid will usually order payment of the notified sum, leaving the underlying valuation dispute to be resolved separately if either side still wants to pursue it. That makes a notice dispute one of the fastest adjudications to bring: the facts turn on dates and documents.
Not always. An adjudicator's fee is agreed and paid regardless of the outcome, and on a modest application that fee can be disproportionate to the sum in dispute. Where the notices were missed and the sum is simply payable in full, a letter before action followed by a County Court claim — see taking a customer to court — is usually cheaper and just as effective, because there is no valuation argument left to adjudicate. Reserve adjudication for a dispute that is actually about the value or quality of the work.
Anyone the business chooses. Adjudication is not a reserved legal activity, so a director, a quantity surveyor, a claims consultant or a solicitor can prepare and present the referral, and many referrals in this industry are run by surveyors. Buzz Legal can prepare a referral where the facts turn on notices, dates and figures. Where the dispute turns on the standard of work itself, a surveyor with relevant experience in the trade is usually the better choice to present it.
Retention that has passed its release date is an ordinary debt, with statutory interest running on it since the release date in the same way as any other late payment. The payment notice and pay-less notice regime still applies to it, so check whether either notice was served against the application for release before assuming the sum is open to a fresh dispute. See writing off a bad debt if the paying party has since ceased trading, and checking whether a customer can pay before spending money recovering a retention from one that has.
Enforcing an adjudicator's decision, or issuing a court claim for an unpaid application where no adjudication has taken place, is conducted by AD Solicitors (SRA no. 8011228), because issuing and conducting court proceedings is a reserved legal activity. Everything before that point — checking the notices, calculating the sum due with interest, sending the demand, and preparing an adjudication referral where one is the right route — is not reserved, and is where we act directly. Tell us at the outset whether a notice is missing: it decides whether the numbers are the notified sum or a disputed valuation.
We email you the letter before action checklist, the interest and compensation rules, and the cost of each recovery stage.
Tell us what you are owed and who owes it. We reply with the total once interest and compensation are added, the first step we recommend, and its fixed fee.
