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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 process by challenging 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), which in practical terms means most commercial construction contracts.
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. The overall process to get a decision is only 28 days because the essence of smash and grab is simply that the paying party has missed the time period and/or the process to challenge the payment. However, this does not mean the amount cannot be challenged later (see below).
This is where the adjudicator determines the actual sum due under the contract. It is often used to reassess sums awarded in a "smash and grab" adjudication. There is no mandatory waiting period after a smash and grab adjudication before launching a true value adjudication, but payment must first be made in accordance with the smash and grab decision before the true value adjudication can proceed.
In practical terms, a true value adjudication poses a significant financial risk to a contractor who has won a smash and grab adjudication because the true value adjudication could determine that the actual amount due is lower than what was paid. If this happens:
Repayment risk – the contractor may be ordered to repay part or all of the sum received. This could create cash flow problems, especially if the money has already been spent on project costs or other commitments.
Timing & cost – while the contractor benefits from the initial cash injection, a true value adjudication introduces further legal costs and uncertainty, potentially delaying final settlement.
Set-offs & deductions – if an employer successfully challenges the valuation, they may seek to offset any overpayment against future payments, retention sums, or even damages claims.
Weaker negotiating position – knowing that an employer has a right to revisit the true value may pressure the contractor into a commercial settlement, possibly for less than the smash and grab amount.
To mitigate these risks, contractors should ensure their valuations are robust, supported by clear evidence, and anticipate the possibility of a true value challenge when relying on a smash and grab claim.
Our construction law team can:
Advise on payment notice compliance
Review contract procedures
Represent you in smash and grab and/or true value 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...
