UK: Employers Breathe A Sigh Of Relief: Adjudicators' Decisions Will Not Always Be Enforced Against Them

In October 2011, the amendments to the Housing Grants, Construction and Regeneration Act ("HGCRA") came into force. They were specifically designed to give the payment provisions in the HGCRA more "teeth". If an employer failed to serve a timely payment or payless notice in response to a contractor's payment application, then the employer would become obliged to pay the amount of the application by default. This was because, in those circumstances, the amount of the application would become the "notified sum" which the employer would have to pay to the contractor.

Regarding payment disputes, the intention of the HGCRA was very much that, if an adjudicator decided that an employer owed a contractor a sum of money, the adjudicator's decision would be temporarily binding on the parties, and would be quickly enforced by the Courts, so that the money actually changed hands. The Courts have described this as the "pay now, litigate later" approach, which is obviously important to the construction industry, where cash-flow is vital.

However, in the recent Technology and Construction Court ("TCC") case of Caledonian Modular Ltd v Mar City Development Ltd, Mr Justice Coulson, bucked these trends.  He ruled that an adjudicator's decision, which decided that an employer had to pay the amount of an interim payment application to a contractor because it had failed to serve a timely payment or payless notice in response to the application, would not be enforced. He did so, stressing that the case turned on its own facts. Nevertheless, the judgment in Caledonian may provide some comfort to employers faced with adjudicators' decisions, which require them to pay contractors sums which they had applied for.

In Caledonian, Mr Justice Coulson noted that one of the more "baleful effects" of the amendments to the HGCRA had been a large increase in the number of cases before adjudicators and the TCC, in which a contractor argued that its employer had failed to serve notices on time, with the result that the contractor acquired an automatic right to be paid the sum that it claimed. In these circumstances, there is of course no examination of the underlying merits of the contractor's claim. Importantly for employers, Mr Justice Coulson commented that if contractors wished to have the benefit of these provisions, then they should be obliged, in return, to furnish their interim payment claims to their employers "with proper clarity".

The relevant facts in Caledonian were as follows:

  • The contractor submitted the first fifteen of its (monthly) interim payment applications to the employer at the end of each month. The fifteenth interim payment application was met by a timely payless notice from the employer, meaning that the employer had to pay very little in response to it;
  • By the time this payless notice was issued, there were on-going final account negotiations between the parties;
  • About a week after the payless notice was issued, the contractor submitted further payment documents to the employer. This was in the middle of the sixteenth month, and the contractor asked the employer to amend its payless notice. Crucially, the contractor did not present these documents as a new (sixteenth) application for interim payment;
  • Shortly after the employer received the further documents, it wrote to the contractor, querying their status. The contractor replied four days later, explaining that they were an "update of the account";
  • The employer did not serve any payment or payless notice in response to the further documents. Consequently, in the middle of the seventeenth month, the contractor sent the employer an invoice for the net sum which could be gleaned from the further documents, i.e. approximately GBP 1.5million. A breakdown was attached to this invoice, which was entitled "Final Account Application Summary";
  • A week later, i.e. towards the end of the seventeenth month, the employer responded to the invoice and breakdown, with a further payless notice, which maintained that no further sum was due to the contractor;
  • The contractor then commenced an adjudication, and asserted that further documents delivered in the middle of month sixteen comprised its sixteenth application for interim payment, and that, as the employer did not issue any timely payment or payless notice in relation to it, the net amount of the application became the notified sum due from the employer;
  • The adjudicator found, in his decision, that the further documents comprised an "early" application for a sixteenth interim payment, and that they had to be treated as a valid application, as the employer had issued a payless notice in relation to them, albeit out of time. As the payless notice was late, the adjudicator decided that the employer had to pay the GBP 1.5 million sum claimed to the contractor.

The contractor brought a court action to enforce the adjudicator's decision. Mr Justice Coulson stated that he had "no hesitation" in rejecting the claim. Although an adjudicator's decision would generally be enforced by the Courts, there would be an exception, where the merits of the claim underlying the adjudicator's decision could be determined as a short, self-contained point, requiring no oral evidence, at a short hearing.

Reviewing the further documents, Mr Justice Coulson held that, on the facts and the law, they did not constitute a sixteenth interim payment application. The contractor was not entitled to submit an interim payment application "early" in the middle of a month. They were not marked as an interim payment application, and when the employer queried their status, the contractor did not say that they comprised an interim payment application. Accordingly, the claim for enforcement of the adjudicator's decision was rejected.

Employers confronted with adjudicators' decisions requiring them to pay the amounts of payment applications made by their contractors will now consider whether the applications were valid and made with proper clarity, and whether enforcement of them can be successfully resisted by raising arguments as to the underlying merits, if the point in issue is a short and self-contained one, requiring no oral evidence.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Related Video
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.