Smash and grab adjudication

[justintime]

I have a client who works in the construction industry and I deal with their accounts and admin. A couple of his customers have withheld payments and it's reached the stage for County Court Summons to be issued. From what I understand a "smash and grab" adjudication can be applied for if the contractor fails to issue a pay less notice prior to withholding payment, and I'm thinking this may be a better option than waiting months for a county court decision.

Does anyone have any knowledge of "smash and grab" adjudications and although it's through the technology and construction court I've noticed that it's still held in a regional county court, so is the process likely to be any quicker.

 

[BubbaWY]

I have a client who works in the construction industry and I deal with their accounts and admin. A couple of his customers have withheld payments and it's reached the stage for County Court Summons to be issued. From what I understand a "smash and grab" adjudication can be applied for if the contractor fails to issue a pay less notice prior to withholding payment, and I'm thinking this may be a better option than waiting months for a county court decision.

Does anyone have any knowledge of "smash and grab" adjudications and although it's through the technology and construction court I've noticed that it's still held in a regional county court, so is the process likely to be any quicker.

Yes, I spent around 3 months earlier this year working on preparing an adjudication claim when a main contractor withheld payment.

It is not overly straight forward so if your client isnt bang up to speed with construction law then Id suggest they got external help. I can recommend someone if required.

I think your client is getting confused though. Adjudication wont go straight to County Court. An ajduciation application has to be submitted to RICS who will then appoint an adjudicator. The timing is crucial as its a strict timetable in applying, submitting your evidence, the other side responding back, etc.

The only time it will reach the Technology and Construction Court is should your client be successful and the customer refuses to pay. It then goes to court, as a formality really, where the court will issue a writ, enforcing the customer to pay. They wont be interested in the adjudication as they will respect the decision.

Obviously the key detail will be in the sub-contract order in relation to applications, pay less notices, payment certificates, etc. Your client needs to have been bang on in hitting the key dates.

The company I worked for at the time won their claim and was awarded circa £180k with £4k in interest and £14k in adjudicator costs. The main contractor still hasnt paid so its due in court in the next 7 or so days.

If I can help further please let me know.

 

[Gyumri]

@BubbaWY has given some good guidance. I would also take a look here to understand the possible complexity:

An Unusual Defence to a Smash and Grab | FTI Consulting

The construction industry is often faced with ambitious time schedules and limited budgets, making steady cash flow an important element of any project.

www.fticonsulting.com

 

[justintime]

Yes, I spent around 3 months earlier this year working on preparing an adjudication claim when a main contractor withheld payment.

It is not overly straight forward so if your client isnt bang up to speed with construction law then Id suggest they got external help. I can recommend someone if required.

I think your client is getting confused though. Adjudication wont go straight to County Court. An ajduciation application has to be submitted to RICS who will then appoint an adjudicator. The timing is crucial as its a strict timetable in applying, submitting your evidence, the other side responding back, etc.

The only time it will reach the Technology and Construction Court is should your client be successful and the customer refuses to pay. It then goes to court, as a formality really, where the court will issue a writ, enforcing the customer to pay. They wont be interested in the adjudication as they will respect the decision.

Obviously the key detail will be in the sub-contract order in relation to applications, pay less notices, payment certificates, etc. Your client needs to have been bang on in hitting the key dates.

The company I worked for at the time won their claim and was awarded circa £180k with £4k in interest and £14k in adjudicator costs. The main contractor still hasnt paid so its due in court in the next 7 or so days.

If I can help further please let me know.

We're only talking a few thousand in one case and £1000 in another, so probably not worth the time and effort. I appreciate your response though, thank you.

 

[justintime]

@BubbaWY has given some good guidance. I would also take a look here to understand the possible complexity:

An Unusual Defence to a Smash and Grab | FTI Consulting

The construction industry is often faced with ambitious time schedules and limited budgets, making steady cash flow an important element of any project.

www.fticonsulting.com

Thank you, I skim read it before coming on here.

 

[BubbaWY]

We're only talking a few thousand in one case and £1000 in another, so probably not worth the time and effort. I appreciate your response though, thank you.

Unfortunately the adjudicators fees would deem it not worth it. You could potentially try the small claims court though I am not sure what jurisdiction it would have on a construction contract. I am guessing your clients contract will state any disputes should be dealt with down the adjudication route.

The construction industry really is the pits. If I could get out of it and get a job on similar money elsewhere, I would.

 

[Michael Gerard]

As well as a lawyer specialising in construction and engineering disputes, I also practice as an adjudicator, and have written quite a few articles over the years about contractual and statutory adjudication, and if I had more time now, I would gladly give you some advice.

All I will say is that adjudication is not for the DIYer. Firstly, you need to ensure that you can refer a dispute to adjudication and if so, whether it is a contractual or statute right - adjudication against consumers is only a contractual right.

A 'smash n grab' adjudication will only work if a number of mandatory ingredients are present, including whether an application has been made and if so, is it a valid application. In any event, even where a 'smash n grab' adjudication is successful, the 'losing' party can then start a 'true valuation' adjudication, which is more costs and involves the same application.

Also, you can only refer a single dispute to an adjudicator - disputes arising out of [say] 2 or more contracts are not single disputes.

Nor is it worth referring a dispute that just involves a couple of thousand pounds (as BubbaWY has pointed out).

The RICS is only one of the ANB's - there are dozens about, including the RIBA and the Ciarb.

As the sum involved is nominal, small claims is probably the answer. However, a well drafted Letter of Claim under the PAP could bring an early settlement.