Adjudication Referral on behalf of a Specialist Subcontractor

Adjudication Referral on behalf of a Specialist Subcontractor

Can construction adjudication help you solve your cash-flow difficulties swiftly?

Summary

A specialist subcontractor’s interim application for payment was undervalued by their client by around £200k. We were instructed to refer the dispute to adjudication on behalf of the subcontractor.

The Problem

Our client, a groundworks/civil engineering contractor, issued an interim application for payment to the main contractor.  The main contractor issued a payment notice and undervalued the interim account by approximately £200k.  This issue had caused our client significant cashflow problems.

Appointment and Action

Lakeside Construction Adjudication Consultants were appointed to refer the interim valuation dispute to adjudication. We provided the subcontractor with legal and commercial advice on the process of adjudication.

As we assessed the interim payment application, it became apparent that insufficient substantiation and explanation had been provided.

Working closely with our client’s project and commercial team we drafted detailed narrative documents, supported with evidence for each disputed variation. The evidence included photographs, instructions, notices, invoices and correspondence.  We assisted the subcontractor in compiling evidence to support the claim.

The narratives detailing our client’s entitlements referred to the factual and financial information and referenced the appropriate subcontract terms.  Legal arguments were provided in the referral document.

The subcontract was silent in relation to the payment of interest and did not include an interest rate.  We therefore claimed the payment of interest for our client, at 8.5%, in accordance with the Late Payment of Commercial Debts (Interest) Act 1998[1].

Lakeside prepared and issued the notice of adjudication, applied for an appropriate adjudicator to be appointed [2], and issued the referral and supporting evidence.

Working closely with our client we also produced a reply document to the main contractor’s response to the referral.

Result

The adjudicator preferred our assessment of the interim account.  This was because it was backed up with evidence.  The adjudicator ordered the main contractor to pay a sum of £180k to our client and to pay the adjudicator’s fees and expenses in full.

The adjudicator was no doubt persuaded by the supporting evidence provided by Lakeside to prove our client’s entitlements.

Our client’s cash flow problem was resolved swiftly.

Construction adjudication is a swift and cost-effective method of resolving disputes, in comparison to court proceedings and arbitration.  Generally, the adjudicator will decide the dispute within 28 days from commencement.   As each party pays their own legal costs it makes this form of construction dispute resolution very cost effective.

If you would like any further information concerning Construction Adjudication, or any of our services, then please call us now on 0330 133 6176 or via email at advice@lakeside.consulting for a free, no-obligation discussion with a construction adjudication specialist.”

[1] www.legislation.gov.uk/ukpga/1998/20/contents 

[2] www.ciarb.org/disputes/dispute-appointment-service/adjudication