Construction payment disputes: what your options are and how to prepare

Your PM has certified 180k on your 280k application. No explanation. No breakdown. Just a payment certificate with a number that's 100k short of what you submitted.

You've got wages to pay on Friday. Materials on 30-day terms. And a main contractor who won't pick up the phone. This is where most M&E subcontractors find out whether their records are good enough.

Your rights under the Construction Act 1996

The Housing Grants, Construction and Regeneration Act 1996 (amended 2011) gives you some real teeth. Every construction contract must include a payment mechanism with clear dates. If it doesn't, the Scheme for Construction Contracts fills the gaps.

You have the right to a payment notice within five days of the due date. If the main contractor wants to pay less than you applied for, they must issue a pay less notice before the prescribed period. Miss that deadline, and the full amount you applied for becomes due. That's not an opinion. That's the law.

If they don't pay the notified sum by the final date for payment, you can suspend work. You need to give seven days' written notice first. But the right is absolute.

Your rights under NEC4 specifically

Under NEC4 Option A, the PM assesses the amount due at each assessment date. Clause 50.1 sets the timetable. The PM has one week after the assessment date to certify.

If the PM's assessment is wrong, you don't just have to accept it. You can notify a compensation event under clause 61.1 if the PM has applied the contract incorrectly. You can also raise a dispute under the W1 or W2 clauses.

The W2 adjudication procedure (which applies when the Construction Act applies, so almost always in the UK) gives you the right to refer a dispute to adjudication at any time. The adjudicator has 28 days to decide, extendable to 42 with your consent.

Before you go to adjudication

Adjudication is quick and relatively cheap, but it's not free. A good adjudicator charges between 3,000 and 8,000 pounds. Your legal costs on top could be similar. So before you start, do the maths.

Ask yourself three questions:

1. Is the amount worth fighting for? If you're 10k short, a conversation might be cheaper than a referral. If you're 100k short, you probably don't have a choice.
2. Do you have the evidence? Contemporaneous records, dated notifications, photos with timestamps. If your evidence is thin, an adjudicator might not find in your favour even if you're right.
3. Did you follow the contract procedures? Timebars are real. If you notified a CE late, the adjudicator may decide it's time-barred. That's a hard lesson to learn at the hearing.

Talk to a construction solicitor before you refer. Most will give you 30 minutes to assess whether your case has legs. That's the cheapest advice you'll ever get.

Building your evidence file

Your adjudicator wants to see a clear story. They want dates, documents, and a logical sequence. They don't want a box of disorganised paper.

Here's what you need to pull together:

• Your payment application with the date it was submitted and proof of submission.
• The payment certificate (or proof that no certificate was issued on time).
• The pay less notice (or proof that no valid pay less notice was served).
• Your activity schedule or bill of quantities showing the work you've valued.
• Site diary records proving the work was done on the dates you claim.
• Photos with GPS and timestamps from the relevant period.
• All early warnings and compensation event notifications with dates sent and received.
• Correspondence trail. Every email, every site instruction, every RFI.

Organise it chronologically. Put a timeline at the front. Make it easy for the adjudicator to follow your story. They've got 28 days and a stack of cases. Don't make them work to understand yours.

The most common reason adjudications are lost

It's not bad work. It's not even wrong valuations. The most common reason M&E subcontractors lose adjudications is late notification.

Under NEC4, you've got eight weeks to notify a compensation event after becoming aware of it. Miss that window and the PM can reject it. Clause 61.3 is brutal. The event is treated as if it never happened.

I've seen subbies lose 60k because a CE was notified nine weeks late. One week. That was the difference between getting paid and writing it off.

The other common failure is poor records. You know the work was done. Your lads know the work was done. But if you can't show an adjudicator dated, location-stamped evidence, it's your word against theirs. Adjudicators decide on evidence, not feelings.

Start your records on day one. Not when a dispute starts. By then it's too late. The best evidence is the evidence you didn't know you'd need.