Covering all Bases

A small flooring company in London was not paid £12500 for work it had undertaken. The reasons why its application had not been paid were set out in a Pay Less Notice. The allegation was that ply had been installed when no ply had been ordered for the works. An examination of the client’s quotation showed that it listed ply as part of the works that were to be undertaken. Further, the client had not used all the ply it had quoted for and had given a credit for the ply it had not used.

Overall it appeared that the client had a good case. This was a case of the Employer concocting an argument in the knowledge that the sum in dispute was not very great and was probably uneconomic to pursue by adjudication or court proceedings. The Employer had probably calculated that with no easy way to take proceedings the client would be forced to accept whatever deal it could secure on its unpaid application.

As the sum in dispute was high than £10,000 the matter could not be dealt with as a small claim and would have to proceed in the fast track of the County Court. That would take up to 12 months (or more), cost more than the sum in dispute and importantly expose the client to a claim for costs in the event that it lost some or all of the arguments.

Adjudication proceedings would likely cost £3500 - £5000 plus vat depending on the arguments before the adjudicator. In addition, there would be a £425 nomination fee for the appointment of the adjudicator. Those sums are not recoverable which meant that the best that the client could hope to gain from adjudication proceedings would be £8500.

In those circumstances the advice may be to settle for the best terms possible.

However, as a client of the NLC, paying £240 per month the client was able to issue adjudication proceedings as part of the service. The only cost to the client was the £425 nomination fee. The proceedings have not yet been completed but the client stands a good chance of an award for the full £12500 and will get all but £425 of that sum.  Had the client not been a client of the NLC the adjudication proceedings would have been uneconomic – a good reason for joining the National Legal Consortium!