No Valid Pay Less Notice? How Contractors and Subcontractors Can Recover the Full Sum Through a Smash and Grab Adjudication

If you’re a contractor or subcontractor, cashflow is everything. When you’ve applied for payment and the paying party simply doesn’t pay, the law may be firmly on your side: if it hasn’t served a valid pay less notice on time, it must pay the notified sum in full, whatever it later says about the value of your work.

We act for contractors and subcontractors on construction projects across England and Wales. If the final date for payment has passed and you haven’t been paid, or you’ve received a pay less notice you think is late or defective, contact our specialist construction disputes team straight away. We act nationally and would love to help you.

Key Takeaways

• If the paying party does not serve a valid pay less notice in time, it must pay the notified sum in full by the final date for payment
• A pay less notice that is late, lacks a proper calculation, or is served on the wrong person or in the wrong way may be invalid
• You have the right to refer a payment dispute to adjudication at any time, and adjudication produces a binding decision within weeks, rather than months or years
• An unpaid invoice or payment application can itself become the notified sum, provided it meets the legal requirements
• Time matters — contact Helix Law as soon as the final date for payment passes without full payment

What Is the Notified Sum?

The notified sum is the amount the paying party must pay by the final date for payment. This comes from the Housing Grants, Construction and Regeneration Act 1996 (the “Construction Act”): if the employer or main contractor wants to pay less than the notified sum, it must serve a valid pay less notice on time. If it doesn’t, it must pay the notified sum in full.

It is usually fixed by one of the following:

●        Your own payment application or invoice

●        A payment notice from the employer or main contractor (or someone acting for it, such as a contract administrator) stating the sum it considers due and how it has been calculated

●        A payee’s notice in default, which you may be able to serve if the paying party fails to issue its payment notice on time

Once the notified sum is set, the only way the paying party can lawfully pay less is by serving a valid pay less notice.

When Is a Pay Less Notice Invalid?

The rules are strict, and the burden is on the paying party to get them right. Common defects in a pay less notice include:

It Was Served Too Late

A pay less notice must be served no later than the period agreed in the contract before the final date for payment. If the contract is silent, the Scheme for Construction Contracts sets that period at seven days before the final date for payment. JCT (Joint Contracts Tribunal), NEC (New Engineering Contract) forms, or bespoke contracts often set their own deadlines, so always check the specific clause. Even a notice served one day late is out of time.

It Doesn’t Explain the Calculation

The notice must state the sum the paying party considers due and the basis on which that sum is calculated. A bare figure, or vague references to “defects” or “contra charges” without a breakdown, may not be enough. The sum stated can be zero, but the basis must still be explained.

It Was Served on the Wrong Person or in the Wrong Way

Most contracts say who notices must go to and how they must be served. A notice sent to the wrong address, the wrong person, or by a method the contract doesn’t allow may be defective.

It Was Served Too Early

Where the notified sum comes from your application or default notice, a pay less notice cannot be given before that application or notice.

What Is a Smash and Grab Adjudication?

A smash and grab adjudication is a quick, focused claim for the notified sum. It doesn’t ask the adjudicator to decide what your work is really worth. Instead, it asks a simple question: was there a valid notified sum, and did the paying party serve a valid pay less notice in time?

If there was no valid pay less notice, the adjudicator will usually order payment of the full notified sum. Because the issues are narrow, these adjudications can be efficient, and the decision is binding until the dispute is finally resolved by agreement, litigation or arbitration.

If the paying party still doesn’t pay, the decision can be enforced through the Technology and Construction Court (TCC), which deals with adjudication enforcement claims quickly.

Can I Use This to Recover an Unpaid Invoice?

Often, yes. Many contractors and subcontractors don’t realise that an unpaid invoice may count as a payment application or payee’s notice. If it does, and no valid pay less notice follows, the invoice amount can become the notified sum.

For this to work, your invoice generally needs to:

• State the sum you consider due
• Explain the basis on which that sum has been calculated (for example, a breakdown of work done, rates and quantities)
• Be served in line with the contract’s payment timetable and on the right person, or in accordance with the requirements of the Scheme for Construction Contracts

Where the contract has no proper payment mechanism — which is common on smaller jobs, informal subcontracts and verbally agreed works — the Scheme for Construction Contracts fills the gaps.

An invoice that simply says “£X for works” without any explanation may not qualify. We can review your invoices and contract terms to tell you quickly whether you have a smash and grab claim.

If your invoice or application for payment does not meet the requirements, we may be able to assist you in preparing a new one that will make it more likely you can pursue a Smash and Grab Adjudication and, ultimately, get paid.

Why You Should Contact Helix Law Straight Away

If the paying party has missed its deadline, it cannot fix the problem by serving a late pay less notice. But delay can still harm your position:

• Your cashflow suffers the longer you wait
• The paying party’s financial position may worsen, making recovery harder
• The paying party may try to bring its own “true value” claim, although it will generally need to pay the notified sum first
• You may lose the chance to use other remedies, such as your statutory right to suspend work for non-payment after giving at least seven days’ notice
• You may miss the deadline to serve a fresh invoice or application for payment

Acting quickly gives you the strongest position.

Things to Be Aware Of

A smash and grab adjudication is a powerful tool, but it’s important to go in with your eyes open:

• It follows the “pay now, argue later” principle. The paying party may later start a true value adjudication or court proceedings to argue that your work was worth less, and it may recover some of the money. However, under the “pay now, argue later” principle, they must pay you first
• Adjudication is not usually a forum where you recover your legal costs from the other side
• If the paying party is insolvent or close to it, an award may be hard to enforce
• The rules depend on your contract terms, so every case needs to be checked carefully

We’ll give you a clear, honest view of your prospects, likely costs and the practical risks before you commit.

Frequently Asked Questions

The Employer Served a Pay Less Notice One Day Late. Is It Valid?

No. A pay less notice served after the deadline is not effective, and the paying party must pay the notified sum in full.

Can a Pay Less Notice Reduce the Sum to Zero?

Yes. The sum stated can be zero, but the notice must still explain how that figure has been calculated and be served on time.

Do I Have to Wait Before Starting an Adjudication?

No. Under the Construction Act, you can give notice of your intention to refer a dispute to adjudication at any time.

What Happens If They Ignore the Adjudicator’s Decision?

You can apply to the Technology and Construction Court to enforce the decision. The court usually deals with these applications quickly.

Need Advice? Contact Helix Law.

The payment rules in the Construction Act exist to protect your cashflow. If the employer or main contractor hasn’t served a valid pay less notice, the law may entitle you to the full amount you’ve applied for or invoiced, without having to argue about the value of your work first.

Subject to case assessment and our funding criteria, we may offer a Conditional Fee Arrangement (CFA / No Win No Fee) on qualifying construction disputes and smash and grab adjudications with strong prospects of success.

If you’ve not been paid, or you’ve received a pay less notice you’re unsure about, contact our specialist construction disputes team today. We’ll review your position quickly and, if the pay less notice is missing or defective, pursue a smash and grab adjudication to recover what you’re owed. Our team have decades of experience acting in matters like yours and are happy to help.