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Over the last year we have seen two sets of three cases on the issue of payment provisions in construction contracts. Payment in construction contracts on projects in Great Britain is an issue underpinned by a statutory framework intended to improve cash flow to the construction supply chain by the inclusion of an adequate payment mechanism in construction contracts and the service of certain notices at key stages in the payment cycle. A failure on behalf of an employer to serve a relevant notice in cases where a contractor’s application for payment is not agreed can result in an automatic right to payment in full of the amount claimed without consideration of the underlying merits of the claim.
Matters are complicated by the fact that in addition to the statutory framework and the general principles that apply, payment provisions in standard form contracts can vary immensely. In the first set of cases for example, there was some debate as to how two of the decisions were to be applied as it had been argued that they appeared inconsistent. The court subsequently clarified that the difference resulted from the manner in which interim payments and a payment upon termination were dealt with under the JCT Design and Build Contract. In the absence of an employer serving a payment or pay less notice, the amount of an interim payment shall be “the sum stated as due in the Interim Application” whereas the payment upon termination in the absence of the required notices shall be “the amount properly due in respect of the account”. Close attention is therefore required to the payment provisions in the relevant contract.
In view of all these differences, it is not unreasonable to ask whether any general principles arise from this run of payment related cases, because it may well be that different decisions would arise based on other standard form contracts. Some general principles include the following:
The updated statutory framework relating to payment in construction contracts came into effect in autumn 2011. The fact that this issue continues to be topical, as illustrated by these cases, only serves to confirm that the statutory requirements have led to unnecessarily complex arrangements, not least those dealing with the consequences of a failure to comply with the provisions relating to the time for service of the relevant statutory notices. Taking professional advice at an early stage and ensuring that the proper paperwork is in place and served on time will assist in avoiding the pitfalls which befell the parties in these cases.
 The first set comprises Harding (t/a MJ Harding Contractors) v Paice and another  EWHC 3824 (TCC), ISG Construction Ltd v Seevic College  EWHC 4007 (TCC) and Galliford Try Building Ltd v Estura Ltd  EWHC 412 (TCC). The second set comprises Leeds City Council v Waco UK Ltd  EWHC 1400 (TCC), Caledonian Modular Ltd v Mar City Developments Ltd  EWHC 1855 (TCC) and Henia Investments Inc v Beck Interiors Ltd  EWHC 2433 (TCC).
 Part II of the Housing Grants, Construction and Regeneration Act 1996, as amended by Part 8 of the Local Democracy, Economic Development and Construction Act 2009.
 Leeds v Waco.
 See Caledonian v Marr and Henia v Beck.
 Caledonian v Marr.
 Part 8 of the Local Democracy, Economic Development and Construction Act 2009 amended the adjudication, payment and suspension provisions in Part II of the Housing Grants, Construction and Regeneration Act 1996 from 1 October 2011 in England and Wales and 1 November 2011 in Scotland.