Case Notes

Say if you don't plan to pay
Can you hold back from paying an invoice if you haven't issued a withholding notice? Two contractors recently tried to argue that you could. Unfortunately for them the judge had other ideas. So make sure you issue a withholding notice as soon as you receive an invoice you don't intend to discharge. Otherwise, you'll have to pay in full even though you may have a good reason not to, for example, because the work is defective. Issuing a notice in hindsight is not good enough.¹

State your demands
Beware when accepting interim valuations, especially where there are variations. The court recently held that it's not enough for a contractor to make a polite request for money. He must provide a clear basis of calculation. So if a contractor's covering letter is not presented as a clear demand for payment with an adequate basis for calculation you don't have to accept it. The timetable for the employer to pay will not start to run. So take care not to waive your employer's rights by accepting badly drafted applications.²

Trying it on
What happens if you fail to issue a payment notice? Until recently no one knew. However, a subbie thought he would test the matter and argued that because the contractor didn't issue the payment notice he couldn't dispute the sum claimed. Contractors will be pleased to know that the subbie failed. Payment notice or not, subbies must still demonstrate that any amount claimed is due under the contract.³

Two contractors recently tried to argue that you can hold back from paying an invoice if you haven’t issued a withholding notice. Unfortunately for them the judge had other ideas

HSE gets tougher
Firms are facing bigger fines for site deaths and injury. Last month one firm was fined £80,000 for a site death – a big hike from a previous high of £45,000. The Health and Safety Executive has issued strong warnings and aims to reduce deaths on UK construction sites (currently running at two deaths a week).

Are you insured...
after September The US catastrophe has prompted insurers to revisit the terms of their terrorist insurance cover. The JCT has also announced that it's reviewing insurance provisions in its contracts. If cover for risks is no longer available or is limited, watch out, your project may be uninsured. Check your insurance arrangements and revisit your premium costs. Should you shop around?