Preparing Payment Claims

Wednesday, 18 November 2009

If, up until now it has been your practice to submit a payment claim, indeed any payment claim made under the Building and Construction Industry Payments Act (the Act) no matter how well prepared with the expectation that any deficiencies can be fixed in a subsequent payment claim, think again.

A Claimant is not permitted to endlessly submit or re-agitate the same claim or the same issues. 

The purpose of the Act is to permit a Claimant one claim for work carried out during one reference period.

In other words, when a party has submitted a payment claim for work carried out in a reference period, that party is stuck with the claim even if there are flaws in the way in which the claim has been prepared and submitted. It cannot seek to rectify those flaws in any subsequent payment claim.

It seems that not only would a decision of the value of work carried out become binding but findings about “issues” will also be binding on future claims and adjudications.

These recent decisions establish that:

The Act gives the Claimant one shot and only one shot at submitting a payment claim under the Act in respect of work that has been carried out during one reference period; constant re-agitation of the same claim or issues may be struck down for being an abuse of process; a previous claim re-submitted in a later payment claim may render the subsequent payment claim invalid.

Put simply, the lesson for Claimants is:

all progress claims must be prepared with great care, thought and with thoroughness; 

if there is any doubt about the thoroughness of a claim or its completeness, serious consideration should be made to whether a claim should be made under the Act at all. 

a Claimant should be careful about what issues it puts before an adjudicator, for example, interpretation of the contract or complex legal questions.

If the adjudicator gets it wrong, it would nevertheless be binding on how future claims may be construed.

Read the full article by Aventra Dingh in "Resources"