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Smash and grab adjudication is a specific type of dispute resolution process within the construction industry, focused on avoiding delay for contractors in recovering payment for unpaid applications or certificates (formal payment requests submitted by contractors or contract administrators confirming amounts due to contractors).
Unlike standard adjudication, which may determine the true value of works, smash and grab proceedings only arise where the paying party does not comply with notice rights to challenge the amount claimed by the contractor.
If the client (paying party) submits a valid payment notice or pay less notice within the required statutory timeframe, a smash and grab adjudication is no longer possible because the payer has met their legal obligations. Instead, any dispute over the amount due must be resolved through a true value adjudication or another dispute resolution process.
A payment notice confirms the amount the payer agrees to pay and must be issued within 5 days after the payment due date. It often means the payer does not dispute the amount claimed but is also a way for the payer to hedge bets by complying with process. A pay less notice is only needed if the payer wants to reduce the amount that was previously notified and must be served at least 7 days before the final payment due date.
The right to adjudication and payment notice requirements come from the Housing Grants, Construction and Regeneration Act 1996 (the "Construction Act"). Parties cannot contract out of "smash and grab" adjudication. However, for the "smash and grab" mechanism to be available, the contract must include or have implied into it the statutory payment provisions required by the Act. This effectively means the contract must include requirements for payment notices, pay less notices, and specific timelines for these procedures. For contracts not covered by the Act, parties would need to rely on standard contractual remedies or other dispute resolution methods to recover unpaid amounts, as the statutory adjudication regime would not apply.
"Smash and grab" adjudication does not apply to all construction contracts. It applies specifically to construction contracts that fall within the scope of the Housing Grants, Construction and Regeneration Act 1996 (as amended).
The Act covers most commercial construction contracts in the UK, but there are notable exceptions:
Contracts with residential occupiers (homeowners)
Contracts related to oil, gas, or mineral extraction
Contracts for the manufacture or delivery of components, equipment, or materials
Contracts below a certain value (de minimis contracts)
Some PFI/PPP contracts with specific financing arrangements
Contracts with foreign governments or international organisations
The Scheme for Construction Contracts (England and Wales) Regulations 1998 is crucial to "smash and grab" adjudications because it provides default rules that apply when construction contracts don't include proper payment and adjudication provisions. The Scheme effectively guarantees that all qualifying construction contracts have enforceable payment notice requirements and adjudication procedures, whether the parties included them properly or not. Consequently :-
if your contract doesn't specify when payment notices should be issued, the Scheme provides the default timeframes
if your contract lacks proper adjudication procedures, the Scheme supplies them
even if parties try to avoid the payment notice requirements, the Scheme's provisions will be implied into their contract
unless the contract specifies otherwise, the Scheme provides that payment becomes due 28 days after completion or claim, payment notices must be issued 5 days after due date, pay less notices must be issued 7 days before final date and the final date for payment is 17 days after due date.
If no adjudicator or Adjudicator Nominating Body (ANB) is named in the contract, the referring party can apply to any relevant ANB of their choice to appoint an adjudicator. Common ANBs include the Royal Institution of Chartered Surveyors (RICS) or the Construction Industry Council (CIC). There are others as well.
In terms of process, it works as follows :-
Notice of adjudication served - briefly identifies the parties, outlines the dispute, states what payment is being claimed, and indicates the remedy sought
Adjudicator appointed within 7 days
Referral notice submitted - within 7 days of appointment of Adjudicator, the detailed document is submitted by the claiming party with full case details, supporting evidence, and arguments explaining why payment is due based on the absence or deficiency of required payment or pay less notices from the paying party.
Response from paying party - the paying party typically has 7-14 days to submit their response, though this timeframe is not statutorily fixed. The exact deadline is usually set by the adjudicator in their initial directions and depends on the complexity of the case and the overall 28-day timetable for reaching a decision.
Adjudicator's queries and investigations
Decision - The 28-day period for an adjudicator to reach a decision starts from the date the referral notice is received by the adjudicator. This is the standard timeframe established in the Construction Act, though it can be extended by agreement of the parties or by the referring party allowing the adjudicator up to 14 additional days.
Decision binding until final resolution - If a paying party intends to challenge the true value after complying with a "smash and grab" decision, the payee will typically know within days or weeks after payment, as the paying party must serve a notice of adjudication for the true value dispute. The true value adjudication follows the same basic process as the original adjudication - notice, referral, response, and decision within 28 days - but focuses on determining the actual value of the works performed rather than payment notice compliance.
May damage commercial relationships
Risk of subsequent 'true value' adjudication
Costs of proceedings
Enforcement might be challenged
Our construction law team can:
Advise on payment notice compliance
Review contract procedures
Represent you in adjudication proceedings
Handle enforcement proceedings
Negotiate settlements
Contact our construction law specialists for expert advice on construction payment disputes and adjudication.
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Solicitor - Construction & Engineering
Daniel is a Consultant.
He is a Construction & Engineering law specialist and covers the full span of construction matters across a range of sectors including private wealth, office, living, logistics, hospitality & leisure and energy &am...
