The CCA 2013 came into force on the 25th July 2016. The Act shall applies in relation to all construction contracts entered into after that date. It is important that all paying parties are aware of the adjudication provisions of the CCA 2013. In particular, paying parties need to be aware of the very short timescales that apply once a payment dispute has been referred to adjudication. Prior to entering into the contract or subcontract the paying party should be aware of how the payment provisions in the contract or subcontract relate to the requirements in the CCA 2013. The paying party should ensure that it keeps good records in relation to the payment processes during the works and that it is aware of the emergence of any possible payment disputes.
Sub-section 4(1) of the CCA 2013 applies where, within 5 days of the payment claim date, the party seeking payment delivers a payment claim notice. In practice the application for payment will be very similar to applications contractors and subcontractors are used to making every month or so under standard form contracts.
Sub-section 4(2) sets out what should be included in a payment claim notice including the amount claimed, the stage of work to which the payment claim relates, the subject matter of the claim and the basis of the calculation. It is expected that, over time, standard forms of such notices will be developed by contractors and subcontractors as well as by professional bodies.
Sub-section 4(3) requires the paying party, if it contests that the amount claimed in the payment claim notice is due and payable, to respond within twenty-one days specifying the basis on which the amount is disputed. If it fails to do so, or if the party seeking payment is not satisfied with the response, the issue may be referred to adjudication.
It is very important for the paying party to plan for the contingency of a payment dispute being referred to adjudication and, in particular, for the paying party to know how it intends to react in the event of such a referral.
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