Know your right to suspend, and its procedure
If the notified sum is not paid by the final date for payment, the Construction Act lets you suspend some or all of your work. But the right only arises after written notice of your intention and the notice period. Suspend without following the procedure and you may be the one in breach.
Updated: . By Jack Butler-Kettle, Construction Claims Consultant.
Why it matters
Suspension is the strongest lever an unpaid subcontractor holds, and the easiest to misuse. Pull a crew off site on a Friday because the money has not come, and your unpaid sum becomes an allegation of walking off the job. The right under section 112 of the Housing Grants, Construction and Regeneration Act 1996 exists only when the notified sum is unpaid by the final date for payment. It also needs written notice, and the notice period must run first. Get the order right and you are in the right with the site stopped. Get it wrong and you are in breach, with no money either.
How to do it
- Confirm from the file that the notified sum for the month has not been paid by the final date for payment.
- Read the contract's suspension clause, check it against the Act, and take advice if they differ.
- Serve written notice of your intention to suspend, stating the ground, on the named people by a method the contract allows, and keep the proof of sending.
- Count the notice period from service, and do not stop work before it has run.
- Record the costs of suspending and remobilising from the first day, because you will need them later.
Example
Illustrative example. The scenario and figures are invented.
The facts
A subcontractor's seventh application is certified at £66,000 in the Payment Notice, and no Pay Less Notice is issued. The final date for payment passes with nothing paid. Chasing produces promises but no money. The director wants the crew off site by the end of the week.
What happens
- The QS checks the file: Payment Notice for £66,000, no Pay Less Notice, final date passed, no payment.
- The QS reads the suspension clause and writes a notice of intention to suspend, stating the unpaid notified sum and the ground.
- The notice goes to the named people by the permitted method, with proof kept. The crew stays on site while the notice period runs.
- The main contractor pays £66,000 on the last day of the period, and the crew never leaves.
The outcome
The sum is paid without a day lost on site, and the subcontractor is never exposed to a claim for walking off. The director's Friday plan would have done the opposite.
To have this done for you, see our Late Payment Claim service.