Consultations On Payment Issues In The Construction Industry

It is as much the case today that "cashflow is the life blood of the building industry" as it was when Lord Denning coined the phrase over 50 years ago in the Court of Appeal judgment of Dawnays vs Minter (1971). Slow and uncertain cashflow is a significant contributory factor to a high incidence of insolvencies in the construction industry, and ultimately adds to the overall cost of construction.

The position has much improved since Part II of the Housing Grants, Construction and Regeneration Act ("the Construction Act") came into force in 1998. As currently in effect with modifications introduced in 2011, the Construction Act requires every construction contract to include obligations on the paying party to give notice of payments which it intends to make ("the notified sum"), and the right for the parties to refer a dispute to adjudication at any time, in accordance with a process which requires the adjudicator to provide a decision within 28 days of referral, a