No late payment silver bullet (2016) 27 4 Cons.Law 6 [Archived]
No late payment silver bullet (2016) 27 4 Cons.Law 6 [Archived]

The following Construction guidance note provides comprehensive and up to date legal information covering:

  • No late payment silver bullet (2016) 27 4 Cons.Law 6 [Archived]
  • Improvements in the payment landscape
  • Downsides to the Act
  • Further legislation in the pipeline
  • Challenging unfair payment terms
  • Other steps taken to address late payment
  • How do we therefore alleviate late payment?

This article appears as originally published in Construction Law on 5 May 2016 and is not maintained.

Guest editor Andrew Croft of Beale & Company Solicitors LLP examines the merits of recent steps taken to tackle late payment, and suggests some other possible paths to improvement. The Construction Act is under review, but don’t rely on legislation, he argues.

It is widely acknowledged that late payment is a key issue across the construction industry. For example, a study by the Asset Based Finance Association (ABFA) found that construction and real estate firms had to wait an average of 107 days to receive payment – a longer wait than in any other industry.

Improvements in the payment landscape

The Housing Grants, Construction and Regeneration Act 1996, as amended in 2011 by the Local Democracy Economic Development and Construction Act 2009 (the Act), has significantly improved the payment landscape in the construction industry.

The introduction of adjudication and the requirement for a clear payment process has provided some very useful tools for contractor, consultants and other suppliers (and also for ‘sophisticated’ employers who use adjudication and the payment notices to their advantage).

Downsides to the Act

However, there are some ‘downsides’ to the Act, including:

  1. to make use of the Act you need to understand how the complex payment processes work, which is not