Construction Act payment notices, in plain terms

Most payment disputes in construction are not won on the merits. They are won on a date.

The Construction Act sets a mechanism that runs whether or not your contract says anything sensible, and it is unforgiving about timing. This is the short version of what a director needs to hold in their head.

The four dates

Every payment cycle has the same shape.

The due date. When the payment becomes due. Your contract sets it.
The payment notice, within five days of the due date. It says what is due and how that was calculated.
The pay less notice, if you intend to pay less than the notified sum. It must come before the final date for payment, by the period your contract sets.
The final date for payment. When the money has to be there.

Miss step two and, on most contracts, the payee's own application becomes the notified sum. Miss step three and you owe that sum in full — even if the work was not worth it.

The expensive part

That last sentence is the whole reason this article exists.

A pay less notice served late is not a weak argument. It is no argument. The adjudicator does not weigh whether the valuation was fair. They look at whether a valid notice was served in time, find it was not, and order payment of the notified sum.

This is what a "smash and grab" adjudication is. It is not a loophole. It is the Act working exactly as intended, on a contractor who did not diarise a date.

You can still challenge the true value afterwards, in a second adjudication. But you pay first, and you have spent the cash and the fees to get back to where a notice would have put you.

What actually goes wrong

In practice the failure is rarely legal. It is operational.

The quantity surveyor cannot value the work in time because the labour figures for the period have not landed. The site records are on paper, or in a WhatsApp thread, or in a supervisor's head. By the time the numbers are good enough to write a notice on, the window has closed.

So the notice goes out late, or it goes out defensive and vague, or it does not go out.

The date was never the hard part. The information was.

What to fix

Put the four dates for every contract in one place, with the notice deadlines, not the payment dates. The payment date is the one everybody already knows.
Make the labour figure available before the notice window, not after. If your cost data arrives at month end, every notice is written blind.
Send the notice even when the number is provisional. A notice with a stated basis beats no notice, every time.

Where these rules come from

The mechanism is in Part II of the Housing Grants, Construction and Regeneration Act 1996, as amended by the Local Democracy, Economic Development and Construction Act 2009. Where a contract does not comply, the Scheme for Construction Contracts supplies the missing terms.

This is a plain-English summary, not legal advice. The periods differ by contract, and the difference is the thing that catches people.

VORDO exists because of the second half of this article. Labour lands against the project the day it is worked, so the figure you need for a notice is there while the window is still open. Register now and see it on a job you are running.