Payment & pay less notices

A disputed pay less notice can change the leverage in a construction payment dispute.

HQ Law advises on payment-notice and pay-less-notice issues as part of wider construction payment and adjudication disputes.

Discuss the notice dispute Construction disputes

Documents to check quickly

The contract, relevant payment cycle, application, due date/final date calculations, payment notice, pay less notice, service evidence and valuation basis.

The strength of any position depends on the actual contract, notices, evidence and procedural history. HQ Law can review the material, identify the legal and commercial issues and advise on the proportionate route forward.

Possible routes

Focused correspondence or negotiation
Construction adjudication where available and appropriate
Mediation or settlement discussions
Litigation or arbitration where the contract and circumstances require it

Fixed-fee payment review

Payment / Pay Less Notice Review — £495 + VAT.

For a defined payment-cycle issue, HQ Law can review the agreed core payment documents, the contractual payment provisions and key dates, followed by a 30-minute call and short written assessment.

The fee assumes one defined payment issue and an agreed document set. Adjudication, correspondence with the other party and further drafting are separately scoped.

Payment mechanics

What makes a payment or pay less notice important?

For construction contracts within the statutory payment regime, the payment cycle is driven by due dates, notices and the final date for payment. Section 110A requires the relevant payment notice to state the sum considered due and the basis on which it is calculated. The statutory framework also deals with what happens where the payer does not give the required notice.

Section 111 requires the notified sum to be paid by the final date for payment, subject to the statutory provisions. A party intending to pay less than the notified sum must serve a compliant pay less notice stating the sum it considers due and the basis of that calculation. The deadline is contract-specific, or supplied by the Scheme where the contract does not make adequate provision.

What is a pay less notice?

It is the notice used by a payer or specified person to state that less than the notified sum will be paid. It must identify the sum considered due at the date of the notice and explain the basis of the calculation.

What if the notice is late?

Timing can be decisive. A notice served outside the contractual or Scheme deadline may not reduce the amount that has become the notified sum for that payment cycle.

What if no payer notice was served?

Depending on the contract, the payee's application may operate as the relevant notice or the statutory default-notice machinery may become important. The exact contractual wording and service evidence should be checked.

What documents matter first?

The contract, amendments, payment schedule, application, payment notice, pay less notice, service evidence, valuation backup and the calculation of the final date for payment.

Key sources: HGCRA 1996, s.110A · s.110B · s.111.

Free PDF checklist

Construction Payment Dispute Checklist

Use the checklist to reconstruct the payment cycle, review the application and notices, record service evidence and organise the material needed to assess the next step.

Download the checklist

Next step

Discuss the dispute with HQ Law

Tell us who the parties are, what has happened and any immediate deadline. We can then carry out an initial conflict check and consider the next step.

Start an enquiry Call 07843 580 112