Posted by Andrew Ash, Partner
Contractor and sub-contractor applications for payment requirements
Back in 2011, amendments were made to the statutory payment notice and withholding notice regimes, first introduced by the Housing Grants Construction and Regeneration Act 1996.
These amendments included important concepts such as the “Notified Sum” and the “Contractor’s Default Notice”, which commentators perceived at the time as providing main contractors and sub-contractors alike with a potent means of recovering payment for works carried out under construction contracts.
However, following a number of recent cases in the Technology and Construction Court, it has become clear that these provisions will only be of assistance to those contractors and sub-contractors whose applications for payment comply with the requirements of the statutory payment and notification regime.
These cases also provide insight into how one should interpret and apply the new provisions dealing with the timing of:
- Due Dates,
- Payment Notices, and
- Pay Less Notices
They also illustrate the dangers arising where the parties to a construction contract adopt bespoke amendments to the payment mechanism models in the standard forms, such as JCT.
On 30 June 2016, we’ll be holding a breakfast seminar aimed at contractors, where we’ll be discussing the points above and the recent cases, as well as the requirements that contractors and sub-contractors applications for payment need to satisfy.
In addition, our insolvency expert, Philip Banks-Welsh, will be considering the implications that an insolvency in the chain of contracts on a construction project will have in relation to the new payment regime.
For advice on construction and engineering legal issues, contact our team of experts
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