- Distinguish the three types of set-off: abatement, equitable set-off and liquidated sums
- Apply the s.111 pay-less notice rule to challenge unjustified deductions
- Calculate statutory interest under the Late Payment of Commercial Debts (Interest) Act 1998
- Apply the modern Cavendish test to any LAD clause an MC tries to enforce
- Run an adjudication from the Notice of Adjudication through to enforcement
- Exercise the s.112 right to suspend performance correctly
- Sequence a debt recovery action from credit control through to Money Claim Online
- Manage limitation so the final account lands inside the six-year window
- Protect retention against upstream insolvency using pricing, bonds, insurance and trust accounts
1. Your Defence Layer When Things Go Wrong
Modules 1 to 7 are about prevention: pricing the job right, reading the contract before you sign it, keeping the records, running the controls. This module is about what happens when prevention is not enough. The application goes unanswered. The certificate comes in short. A contra-charge lands with no warning. The QS stops returning calls.
Once a contract is in trouble, disputed variations, late payment, alleged delay, contra-charges, you need three things working together: notices, records and the right escalation procedure. The law gives every scaffolding subcontractor a set of statutory rights that exist whatever the contract says. Most scaffolders never use them. Plenty of MCs are counting on that.
Where this module sits against the rest of the course: delay events, EOT and the notice machinery are Module 5. Applications, valuations and cost capture are Module 7. This module is the statutory layer underneath both: the rights that decide who ends up with the money when the paperwork war starts.
The time to win a dispute is before it starts. A pay-less deadline diaried on day one costs nothing. A notice served on time costs minutes. The same facts argued through an adjudicator cost thousands. Build the defence layer while the job is still going right.
2. Quick Definitions
Dispute and payment terms used through this module. Tap each to see the detail.
3. Set-Off and Withholding
Three types of set-off: abatement (work worth less than contracted), equitable set-off (a cross-claim closely connected to the main claim), liquidated sums (retention, contra-charges).
Set-off is how money disappears from your application without anyone ever saying no. The MC does not refuse to pay. It pays less, points to a deduction, and waits to see whether you push back. Knowing which type of set-off you are looking at tells you how to fight it.
- Abatement: the MC says the work is worth less than the sum applied for. Incomplete lifts, alleged defects, scope not done. A common law right, no clause needed.
- Equitable set-off: the MC holds a cross-claim closely connected to your claim. Alleged damage to finished work, costs it says your delay caused on the same job.
- Liquidated sums: deductions the contract itself fixes. Retention and contra-charges are the standard examples.
An unchallenged set-off is a gift to the contractor. Challenge every deduction in writing within the contractual notice period, however small the sum. A QS who gets away with a deduction once will repeat it on every application that follows.
Sort it: which type of set-off?
Each of these lands on a real application. Drop each one into the right bucket, because the label tells you how to respond.
Whatever the label, one rule sits over all three. To apply any of them against a notified sum, the payer needs a valid pay-less notice served in time. No notice, no deduction. That is the whole rule, and it is the subject of the next part of this section.
The withholding notice rule
A payer who intends to pay less than the notified sum must serve a pay-less notice within the contractual deadline. Without a valid pay-less notice the full notified sum becomes due.
The pay-less notice is the single most litigated mechanic in UK construction contracts. HGCRA s.111 sets the rule: if the payer does not issue a valid notice in time, the full notified sum becomes due regardless of merit. The Act does not care whose valuation is right. It cares who served notice on time.
All three standard forms enforce this floor, but they set the deadline differently. NASC operates at 7 days before the final date for payment, JCT at 5 days, NEC by reference to the Subcontract Data. The table below sets out the deadline, the required content, and what happens when a notice is invalid or missing. The S&T v Grove and Davenport v Greer line of cases applies under all three forms: the payer pays the notified sum first, then adjudicates the true value.
Payment Under the Construction Act: NASC's guidance on the Construction Act payment regime as it applies to scaffolding subcontracts, covering the notified sum, payment notices and pay-less notices.
| Topic | JCT SBCSub/C 2016 | NEC3 ECS | NASC Scaffolding Contract 2018 |
|---|---|---|---|
| Pay Less Notice deadline | Not less than 5 days before the final date for payment, unless the Sub-Contract Particulars say otherwise (Clause 4.12) | Within the prescribed period before the final date for payment per Subcontract Data Part Two (Clause 51) | Not later than 7 days before the final date for payment (Clause 14.4) |
| Required content | Sum considered due and basis of calculation (Clause 4.12.2) | Sum considered due and basis of calculation (Clause 51.3) | Sum considered due and basis of calculation (Clause 14.4) |
| Effect of invalid or no notice | Full notified sum becomes due, recoverable by smash-and-grab adjudication | Full notified sum becomes due, recoverable by smash-and-grab adjudication | Full notified sum becomes due, recoverable by smash-and-grab adjudication, plus 8% above base interest (Clauses 14.4 and 14.5) |
| True-value adjudication response | Available after the notified sum is paid, per S&T v Grove and Davenport v Greer | Available after the notified sum is paid | Available after the notified sum is paid |
The rule is mechanical and the courts enforce it mechanically: no valid pay-less notice, full notified sum due, regardless of the merits. Diary the pay-less deadline on every application, on every job. And remember the rule cuts both ways: serve your own pay-less notices on your labour-only subcontractors and hire suppliers inside the deadline too.
Pay-when-paid clauses
One more withholding tactic to recognise. The Construction Act makes pay-when-paid clauses unenforceable in almost all cases: an MC cannot withhold your money because its client has not paid it. The narrow exception is upstream insolvency. If an MC pleads "we have not been paid yet", that is a cash flow problem, and it is theirs, not a defence, unless the employer is insolvent. Challenge it.
"We note the deduction of £[X], described as [reason], in your [payment certificate / pay-less notice] dated [date]. We do not accept the deduction. [No valid pay-less notice has been served within the period required by the Subcontract / The notice does not state the sum considered due and the basis of its calculation]. The notified sum of £[X] therefore remains due in full on [final date for payment]. We reserve all rights under the Subcontract and the Housing Grants, Construction and Regeneration Act 1996, including the right to refer this matter to adjudication."
4. Late Payment of Commercial Debts
Statutory right to charge interest on late B2B payment at base rate plus 8%, plus a fixed sum of £40, £70 or £100 depending on debt size.
Late payment is a cost. Kit on hire, wages out, materials paid for, and the money sitting in someone else's account earning them interest. The Late Payment Act moves that cost back where it belongs: onto the payer. Interest is not a favour you ask for. It is a term of the contract, implied by law.
The framework
Implies a term into business-to-business contracts entitling suppliers to charge statutory interest on overdue debts.
Implements EU Directive 2011/7/EU. A 60-day cap on B2B payment terms, a 30-day cap in the public sector, fixed compensation amounts, and limits on verification periods.
The interest formula
The calculation is simple enough to do on the back of a daywork sheet:
Debt × interest rate × days late ÷ 365
Where the interest rate is the Bank of England reference rate plus 8 percentage points. The reference rate is fixed twice a year, on 1 January and 1 July, and applies for the following six months.
Worked example. XYZ Scaffolding is owed £20,000, paid 60 days after the final date for payment. If the reference rate for the period is 4%, the statutory rate is 12%. Interest: £20,000 × 12% × 60 ÷ 365 = £394.52, plus the applicable fixed sum on top. Not a fortune on one invoice, but charge it consistently and two things happen: you recover a real cost, and the payer learns that paying you late is not free.
To confirm before publishing: the worked example uses an assumed reference rate of 4% for illustration, and the fixed-sum bands (£40 / £70 / £100 by debt size) are quoted from CG7:22 without the exact thresholds. Verify the current reference rate treatment and the fixed-sum bands.
The substantial remedy carve-out
Contracts providing for contractual interest (for example JCT's 2% contractual interest) are exempted from the Act, so statutory interest cannot be claimed in addition. It is one or the other.
Before you add interest to an overdue application, check which regime the contract puts you in. If the contract provides its own interest remedy, that remedy applies instead of the Act, provided it is a substantial one. If it is not substantial, the Act still bites.
1% or 2% contractual interest is unlikely to be a substantial remedy. Reserve your right to statutory interest where the contractual remedy is inadequate, and say so in writing when you invoice it.
"Interest on overdue sums is chargeable under the Late Payment of Commercial Debts (Interest) Act 1998 at the statutory rate, together with the fixed sum provided by the Act. Where the Subcontract provides a contractual rate of interest, we reserve the right to contend that it does not constitute a substantial remedy within the meaning of the Act."
5. LADs: Liquidated and Ascertained Damages
LADs are a pre-agreed rate of damages payable for each unit of delay past the completion date. They must be a genuine pre-estimate of loss, not a penalty. Resist sums above 10% of order value.
The modern test: a clause is a penalty only if the sum is out of all proportion to a legitimate interest of the innocent party. Genuine pre-estimate is no longer the sole test.
LADs are the MC's pre-agreed remedy for delay past completion: a fixed sum per day or per week, deducted without having to prove a penny of actual loss. That is exactly why MCs like them and exactly why you should look hard at any subcontract that contains them. The threat of LADs is used far more often than LADs are ever lawfully deducted, so learn the two tests that decide whether the threat is real.
Why LADs in subcontracts are unusual
The level of damages that might be incurred in a subcontract may vary considerably depending on the time at which any breach occurs, making it impossible to pre-estimate.
A week of scaffold delay in the first month of a two-year project may cost the MC very little. The same week at handover could drag the whole main contract past completion. Because the loss depends entirely on when the breach happens, a single pre-agreed weekly rate cannot honestly claim to be a pre-estimate of it. That is why the NASC form leaves LADs out altogether.
The burden of proof without LADs
The absence of LADs in your subcontract is commercially advantageous. Without LADs the MC must prove actual loss: main contract LADs actually paid, prelims, disruption to other subcontractors. That is hard, slow and expensive. A missing LAD clause is not a gap that needs filling. Do not let anyone fill it.
The three forms approach LADs very differently. JCT allows LADs to be entered in the Numerical Particulars as a standing option. NEC offers them only as an optional clause (X7) the parties have to elect into. NASC takes the strongest position: no LAD clause in the standard form at all. That absence is deliberate, and it is commercially valuable. Where the MC has amended the form to introduce LADs, the Cavendish test and the NASC CG19:18 10% cap are the two levers to push back with.
| Topic | JCT SBCSub/C 2016 | NEC3 ECS | NASC Scaffolding Contract 2018 |
|---|---|---|---|
| Default LAD position | LADs may be inserted at the Numerical Particulars, commonly a per-week or per-day rate (Clause 2.21) | Delay damages under Option X7 if selected, otherwise common law damages (Clause X7 if used) | No LAD clause in the standard form, MC must prove actual loss (no clause) |
| Burden of proof if no LADs | Common law damages, MC must prove actual loss, mitigation duty applies | Common law damages, MC must prove actual loss | Common law damages, MC must prove actual loss, main contract LADs paid, prelims, disruption to other trades |
| Enforceability test (current law) | Cavendish test: out of all proportion to a legitimate interest | Cavendish test, plus NEC fairness principles in operation | Cavendish test, NASC CG19:18 recommends a cap at 10% of order value |
| Negotiation position | Resist sums that are not a genuine pre-estimate, resist sums above 10% of order value | Resist X7 inclusion unless commercially justified | Standard form has no LADs, resist MC amendment to introduce them (NASC CG19:18) |
The deliberate absence of LADs in the NASC standard form shifts the evidential burden onto the MC. Where the MC amends the form to introduce LADs, run the Cavendish test and benchmark the rate against the CG19:18 10% cap. Where LADs survive negotiation, make sure they apply only to your portion of the Works and only to delays you have caused. And remember Module 5: a properly claimed EOT stops LADs running for the period it covers.
6. Adjudication: The Statutory Right
The most popular form of dispute resolution in the construction industry. Quick, relatively cheap, binding immediately.
Any party to a construction contract has the right to refer any dispute to adjudication at any time. This right cannot be excluded by contract.
Adjudication exists because Parliament decided that subcontractors should be able to recover money owed without the time and cost of litigation. Litigation runs 12 to 36 months to a hearing, with legal costs that can exceed the claim. Adjudication delivers a binding decision in 28 days, can be run by a quantity surveyor or a construction lawyer, and typically costs £5,000 to £25,000 all-in for a straightforward case. "At any time" means exactly that: mid-job, after practical completion, or in the middle of a final account stand-off.
When to use it
- The MC has failed to pay the notified sum and served no valid pay-less notice
- A pay-less notice has been issued for amounts you strongly dispute and the sum is significant
- A variation claim has been rejected without proper grounds
- Your EOT claim has been refused and you are facing LAD deductions you believe are wrong
- The final account is deadlocked and the evidence is on your side
The 28-day decision rule
The adjudicator must deliver a decision within 28 days of the Referral. That period can be extended by 14 days at the request of the referring party, and beyond that only with both parties' consent. Whatever the MC does, a decision is coming inside a month. That deadline changes behaviour: the moment a Notice of Adjudication lands, the dynamics of most payment disputes shift.
The 7-day referral rule
Within 7 days of the date of your notice of intent you must send your case to the adjudicator, with a copy simultaneously to the other party.
Seven days is not long to assemble a referral. The practical consequence: write the case first, serve the notice second. A referring party that serves its Notice of Adjudication and then starts drafting is a referring party about to miss its own deadline.
The right to adjudicate is statutory and cannot be excluded by any contract. What each form does is set the procedural detail: the nominating body, the route to legal proceedings, and whether mediation is built in as a first step. NASC names a specific ANB (constructionadjudicators.com) in the contract text and embeds mediation under Clause 20.1 as an agreed first step. JCT defaults to the RICS President or another listed body. NEC routes through Option W2 with the ANB stated in the Subcontract Data.
| Topic | JCT SBCSub/C 2016 | NEC3 ECS | NASC Scaffolding Contract 2018 |
|---|---|---|---|
| Statutory route | HGCRA s.108 right preserved, JCT Adjudication Agreement procedure (Clause 9.2) | HGCRA s.108 right preserved, Option W2 adjudication procedure (Option W2) | HGCRA s.108 right preserved, mediation option available first (Articles 3 to 4, Clauses 20.1 to 20.2) |
| Nominating body, default | RICS President or other listed body (Clause 9.2) | RICS, Adjudicator Nominating Body in Subcontract Data (Option W2) | constructionadjudicators.com, the ANB named in the standard form (Article 3) |
| Mediation step | Not contractually required, encouraged | Not contractually required, parties may agree | Mediation via the Centre for Alternative Dispute Resolution as an agreed first step (Clause 20.1) |
| Legal proceedings | English law and English courts unless arbitration elected (Clause 9.3) | Tribunal selected in the Subcontract Data, typically litigation (Option W2) | Subject to adjudication, disputes determined by legal proceedings, English law and English courts (Article 4 and Clause 21) |
NASC is the only one of the three to name a specific ANB and to embed mediation as an agreed first step. Both should appear in the Notice of Adjudication. Use mediation under Clause 20.1 where the relationship is worth preserving. Go straight to adjudication where it is not.
Adjudicator Nominating Bodies (ANBs)
- RICS, Royal Institution of Chartered Surveyors
- RIBA, Royal Institute of British Architects
- ICE, Institution of Civil Engineers
- CIArb, Chartered Institute of Arbitrators
- CIOB, Chartered Institute of Building
- TeCSA, Technology and Construction Solicitors Association
- NASC, National Access and Scaffolding Confederation
The nomination fee is typically £75 to £200 plus VAT.
Tolent clauses are void
Pre-referral clauses allocating the adjudicator's costs to the referring party are ineffective.
A clause that says "if you adjudicate, you pay the costs whatever the outcome" is designed to scare you off using your statutory right. Since the 2009 Act it is dead law. If one appears in a subcontract put in front of you, it tells you something about the drafter, and it binds nobody.
The slip rule
The adjudicator can correct clerical or typographical errors in the decision. There is a 5-day window under the Scheme.
Smash-and-grab vs true value
A smash-and-grab adjudication recovers the full notified sum where no valid pay-less notice was served. It is quick because there is almost nothing to argue about: was there a notified sum, was a valid pay-less notice served in time, no, then pay. A true-value adjudication is the payer's comeback: a second adjudication on what the work was actually worth. The law on the order of those two is now settled.
The payer can adjudicate on the true value of an interim payment after a smash-and-grab adjudication, but must pay the notified sum first.
Reinforced the rule: the payer must pay first and argue the true value second.
Insolvent companies can adjudicate. Insolvency is not a bar to the statutory right.
The order of events is the whole game. Notified sum first, true value second. If the MC has missed its pay-less deadline, its arguments about valuation belong in a later adjudication, not in this month's payment. Do not let a QS talk you into netting the two off.
7. Suspension Rights
If a notified sum is unpaid and no valid pay-less notice has been served, the payee can suspend performance after giving 7 clear days' written notice.
Suspension is the most powerful payment-recovery tool in the Act, and the least used. Scaffolders worry, with reason, about the relationship damage. But the threat alone usually moves money inside the 7-day notice window. An MC that will not answer emails about an overdue application tends to find its voice when the scaffold gang might not turn up on Monday.
Conditions for suspension
- The contract must be a construction contract under HGCRA
- A notified sum must be unpaid past the final date for payment
- No valid pay-less notice has been served
- 7 clear days' written notice is given before suspension
The Act sets the floor: 7 clear days' written notice of non-payment before work can stop. JCT and NASC both operate at that floor. NEC takes a different approach, using Core Clause 92 to set a four-week notice period before termination, with suspension as an interim step less commonly used under NEC. The table below shows the notice required, the trigger event, the cost position and the right to resume. Use it to decide whether to suspend, terminate, or threaten one of the two.
| Topic | JCT SBCSub/C 2016 | NEC3 ECS | NASC Scaffolding Contract 2018 |
|---|---|---|---|
| Notice required before suspension | 7 clear days' written notice of intention to suspend (Clause 4.14) | Four weeks' notice required under Core Clause 92 before termination, suspension less commonly used (Clause 92) | 7 clear days' written notice of non-payment, suspension after expiry (Clause 15) |
| Trigger event | Notified sum unpaid past the final date for payment with no valid pay-less notice (Clauses 4.10 and 4.12) | Unpaid amount due past the final date for payment (Clauses 51 and 92) | Non-payment of a sum due under the contract (Clause 15) |
| Costs of suspension | Reasonable costs and expenses recoverable (Clause 4.14.2) | Disruption and demobilisation costs as a Compensation Event (Clause 60.1) | Costs of suspension recoverable, no carve-out (Clause 15) |
| Right to resume | Resume work on payment of the notified sum (Clause 4.14) | Resume on payment | Resume work on payment of the notified sum (Clause 15) |
NEC3's 4-week termination notice is the longest of the three. HGCRA s.112 sets the floor at 7 days for suspension, and NASC and JCT both operate at that floor. Use suspension carefully: the threat often moves money inside the 7-day window, but actual suspension damages the working relationship.
"We give notice pursuant to section 112 of the Housing Grants, Construction and Regeneration Act 1996 of our intention to suspend performance of our obligations under the Subcontract unless the sum of £[X], which fell due on [final date for payment] and in respect of which no valid pay-less notice has been served, is paid in full within 7 days of the date of this notice." Deliver by email and recorded post, and keep proof of both.
One caution before you serve. Check all four conditions first, against the paperwork, not from memory. If a valid pay-less notice exists that you missed, or your application was served outside the contractual date, a suspension can amount to abandonment or repudiation: your breach, not theirs. Get the facts straight, then act. Once you do suspend, the costs of suspension are recoverable, the suspension period does not count against your programme obligations, and you resume promptly on payment.
8. The Debt Recovery Sequence
Step-by-step escalation from internal credit control to court action.
Debt recovery is a ladder, and it works when you climb it in sequence: in writing, on deadlines you set and then keep. Skipping rungs wastes the pressure each one builds. Stalling on a rung teaches the debtor you are not serious. Tap each rung for the detail.
Money Claim Online (MCOL)
MCOL suits undefended debts under £100,000. The defendant has 14 days to acknowledge and 28 days to defend. If the claim is undefended, judgment in default is obtained automatically. With judgment in hand, the enforcement options are: bailiff, a charging order on property, attachment of earnings, or a third-party debt order.
Cross-discipline guidance on the choice of dispute resolution forum.
"Despite our statement dated [date] and our reminders of [dates], the sum of £[X] due under [contract/order reference] remains outstanding. Unless payment in full is received within 7 days of the date of this letter, we will commence recovery proceedings without further notice. Statutory interest and the fixed sum under the Late Payment of Commercial Debts (Interest) Act 1998 will be added to the claim."
A debt chased in sequence usually gets paid at rung two or three. A debt chased with one angry phone call and then silence gets paid last, or never. The ladder works because every rung tells the debtor the next one is coming.
9. Statutory Demand and Insolvency
A statutory demand is a formal demand for payment of an undisputed debt of £750 or more. If unpaid for 21 days, the creditor can present a winding-up petition.
A statutory demand is a powerful but blunt instrument. Use it only where the debt is undisputed and the debtor's insolvency is suspected. A sledgehammer is a poor tool for a debtor who is solvent but slow: check what you are hitting first.
Why insolvency deserves its own section: scaffolders sit near the bottom of the payment chain, and when a contractor above you fails, the money owed to you usually fails with it. The numbers are not a scare story. They are the current state of the industry you trade in.
Upstream insolvency is the single biggest cause of retention loss in UK construction. Treat retention as money you might never see, not money you have earned. Pricing for the risk, retention bonds, retention insurance and trust accounts are all worth considering.
10. The Prompt Payment Code
The Prompt Payment Code: a voluntary code encouraging on-time payment between organisations and their suppliers.
Many tier-1 main contractors have signed the Prompt Payment Code. Where they have, breaches can be reported to the Small Business Commissioner. Signatories do not enjoy being reported: the Code is a public commitment, and losing it is a procurement problem for them.
Keep it in perspective. The Code is pressure, not law. It sits alongside your statutory rights, never instead of them. The legal route to your money runs through the Construction Act: the notified sum, the pay-less rule, adjudication, suspension. Use the Code as an extra turn of the screw while the statutory machinery does the real work.
11. Limitation: The Six-Year Rule
Six-year limitation period for breach of contract (12 years for deeds). Time runs from the date of breach, not the date the breach was discovered.
Limitation is the quiet killer of old claims. Six years from the date of breach and the right to recover is gone, however good the claim. For most scaffolding subcontracts the breach is the missed payment, so the clock starts the day the money should have arrived and did not. Check how the subcontract was executed: a contract signed as a deed carries 12 years instead of six.
The final account must be issued within the limitation period or the right to recover is lost. For most scaffolding subcontracts that is 6 years from the date of breach, typically the missed payment. Old debt does not improve with age. Close accounts out while the records are fresh and the people who kept them still work for you.
12. Mitigation: The Innocent Party's Duty
The innocent party in any breach of contract has a duty to mitigate its loss. A scaffolder claiming damages must show what reasonable steps were taken to reduce the loss. This is more than a century old and it is tested in almost every claim.
Established the duty to mitigate. The injured party cannot claim losses that could have been reasonably avoided.
On the ground that means: off-hire the cross-hired kit you no longer need, redeploy the gang where you reasonably can, and record every step as you take it. The duty runs the other way too. Where an MC claims common law damages against you for delay, its recovery is limited by the same rule: ask, in writing, what it did to mitigate.
Mitigation evidence is claim evidence. Every step you take to reduce a loss, record it. It proves the loss that remains was unavoidable, and it takes the "you just sat there" argument off the table before it is made.
13. Building a Defensible Position
Everything in this module comes down to three disciplines. They are the same three whether the dispute ends in a phone call, an adjudication or a courtroom.
- Notices: issue every contractual notice within the deadline. No exceptions.
- Records: capture every event in writing the same day.
- Quantification: every claim with a number, every number with a calculation, every calculation with supporting evidence.
This is the same discipline the course has built from the start: the delay records in Module 5, the cost capture in Module 7. Module 8 is where that discipline pays out, because the statutory rights in this module are only as strong as the paperwork behind them. A smash-and-grab needs the application and the missing notice. A suspension needs the unpaid notified sum. An interest claim needs the dates. A defensible position is built months before it is needed.
Complex cases with poor records often end in adverse decisions, even where the underlying merits favour the claimant. An adjudicator decides on what is in front of them, in 28 days. If the evidence is not there, the merits never get a vote.
Action Checklist
- Challenge every set-off in writing within the contractual notice period
- Diary the pay-less notice deadline on every application, on every job
- Reserve the right to statutory interest in your standard terms and invoice it on every late payment
- Resist LADs above 10% of order value in any subcontract
- Test any LAD clause an MC introduces against the Cavendish test before accepting it
- Maintain a notices log on every job
- Prepare the referral before serving a Notice of Adjudication: the 7-day clock is short
- Check all four s.112 conditions against the paperwork before serving a suspension notice
- Run every debt up the CG20:20 escalation ladder in sequence, in writing
- Reserve statutory demands for undisputed debts where insolvency is suspected
- Issue final accounts within 6 years of the date of breach
- Treat retention as at-risk money: consider bonds, insurance or trust accounts
Case Study: The £80k Application and the LADs Threat
Five decisions, one per core mechanism in this module. You are partway through a £600k scaffolding subcontract for ABC Construction on a residential scheme. You apply for £80k on the contractual application date. Five days later ABC issues a payment certificate for £45k. No pay-less notice. The final date for payment passes. They have paid £45k. You are £35k short. Separately, £25k of retention is overdue from practical completion three months ago. ABC has been a Prompt Payment Code signatory for two years. And this morning ABC's QS emailed threatening £100k of LADs at 1.5% per week on the £600k order, claiming you caused three weeks of delay to the kitchen fit-out.
Downloads
Payment rights and dispute templates. Coming soon.
Module 8 Quiz
10 questions. Pass mark is 80% (8 out of 10 correct).
Complete.
You know your defence layer: set-off and the pay-less regime, statutory interest, LADs, adjudication, suspension and the debt recovery sequence. One module left: the Course Debrief pulls every rule together and issues your certificate.
- Module 9: Course Debrief (final knowledge check and your certificate)
References
Harvard-style referencing applies throughout the course.
NASC Commercial Guidance
- NASC (2018) CG2:18 Set-Off. London: National Access and Scaffolding Confederation.
- NASC (2022) CG7:22 Late Payment of Commercial Debts. London: National Access and Scaffolding Confederation.
- NASC (2022) CG9:22 Payment Under the Construction Act. London: National Access and Scaffolding Confederation.
- NASC (2022) CG10:22 Adjudication, Its Use by the Sub-contractor. London: National Access and Scaffolding Confederation.
- NASC (2018) CG19:18 Liquidated and Ascertained Damages. London: National Access and Scaffolding Confederation.
- NASC (2020) CG20:20 A Guide to Monitoring and Chasing Debt. London: National Access and Scaffolding Confederation.
Standard Forms of Contract
- Construction Industry Publications Ltd (2018) Scaffolding Contract 2018: Form of Contract for the Erection, Hire and Dismantling of Scaffolding. Birmingham: Construction Industry Publications Ltd.
- Joint Contracts Tribunal (2016) Standard Building Sub-Contract Conditions (SBCSub/C 2016). London: Sweet and Maxwell.
- NEC (2013) NEC3 Engineering and Construction Subcontract (ECS). London: Institution of Civil Engineers.
RICS
- RICS (Black Book current edn) Conflict Avoidance and Dispute Resolution. London: Royal Institution of Chartered Surveyors.
CIOB
- Chartered Institute of Building (current edn) Adjudication and Dispute Resolution publications. Bracknell: CIOB.
- Chartered Institute of Building (2022) Code of Practice for Project Management for the Built Environment, Disputes. 5th edn. Chichester: Wiley-Blackwell.
Industry Reports and Research
- Arcadis (2024) 14th Annual Construction Disputes Report. Available at: arcadis.com.
- Centre of Construction Law and Dispute Resolution, King's College London (2024) Construction Adjudication in the United Kingdom: Tracing trends and guiding reform, 2024 update. Available at: kcl.ac.uk.
- Construction Wave (2025) More than two-thirds of Carillion businesses unable to pay creditors seven years on from collapse. Available at: constructionwave.co.uk.
- GOV.UK Insolvency Service (2026) Company Insolvency Statistics, February 2026. Available at: gov.uk.
- New Civil Engineer (2024) Failed ISG companies had over £800M in liabilities. Available at: newcivilengineer.com.
- Pinsent Masons (n.d.) Enforcement of Adjudicators' Decisions. Available at: pinsentmasons.com.
- Watson Farley & Williams (2024) Collapse of ISG and contractor insolvency: another stark warning to the construction industry. Available at: wfw.com.
Legislation
- Housing Grants, Construction and Regeneration Act 1996, c. 53. London: HMSO.
- Local Democracy, Economic Development and Construction Act 2009, c. 20, Part 8. London: TSO.
- Late Payment of Commercial Debts (Interest) Act 1998, c. 20. London: TSO.
- Late Payment of Commercial Debts Regulations 2013, SI 2013/395. London: TSO.
- Scheme for Construction Contracts (England and Wales) Regulations 1998, SI 1998/649. London: HMSO.
- Insolvency Act 1986, c. 45. London: HMSO.
- Limitation Act 1980, c. 58. London: HMSO.
Case Law
- British Westinghouse Electric and Manufacturing Co Ltd v Underground Electric Railways Co of London Ltd [1912] AC 673.
- Cavendish Square Holdings BV v Talal El Makdessi [2015] UKSC 67.
- S&T (UK) Ltd v Grove Developments Ltd [2018] EWCA Civ 2448.
- M Davenport Builders Ltd v Greer [2019] EWHC 318 (TCC).
- Bresco Electrical Services Ltd (in liquidation) v Michael J Lonsdale (Electrical) Ltd [2020] UKSC 25.