Smash-and-Grab, True Value, and the Price of a Missed Notice

The vocabulary is inelegant, but everyone in the industry understands it. A smash-and-grab adjudication seeks payment of the sum stated in an application not because the valuation is right, but because the paying party failed to serve a valid payment notice or pay less notice in time. For the better part of a decade the courts have been mapping the boundaries of that tactic and of its counterweight, the true-value adjudication. The map is now reasonably settled. The casualties are the parties who have not read it.

The machinery is unforgiving by design. The Housing Grants, Construction and Regeneration Act 1996, as amended, requires the notified sum to be paid on or before the final date for payment.¹ A payer intending to pay less must say so in a valid pay less notice, served within the prescribed period and setting out the sum it considers due and the basis on which that sum is calculated.² Serve nothing, or serve something defective, and section 111 converts the payee's application into an enforceable debt. Adjudicators enforce it, and the TCC enforces the adjudicators.

The reported cases turn on small administrative facts: a notice served a day late, a notice that states a figure without the basis of calculation, an application issued outside the contractual window, a due date miscalculated under a bespoke payment schedule. The valuation merits are irrelevant at this stage. That is not a defect in the regime; it is the point of it. Cash flow first, argument afterwards.

Grove restored balance, but on strict terms. The right to a true-value adjudication arises only once the section 111 obligation has been discharged. In M Davenport Builders v Greer, the court refused to let a paying party deploy a true-value decision as a set-off against an unpaid notified sum.⁴ In Bexheat v Essex Services Group, the point was put beyond argument: the immediate payment obligation must be performed before a true-value adjudication on the same cycle can be pursued.⁵

Pay now, argue later is not a slogan. It is the sequencing rule the courts actually enforce.

The margins still generate litigation, notably over when the right to refer a true valuation accrues and what happens to a reference launched prematurely, as in Henry Construction Projects v Alu-Fix.⁶ But the architecture is stable. The notified sum is a debt. The true value is a later question.

Step back from the authorities and a pattern emerges: very few smash-and-grab defeats involve a genuine disagreement about what the works were worth. They involve paperwork. Payment administration is typically manual, distributed across a commercial team, and invisible until it fails; a payment calendar that quietly diverged from the contract after the works were varied is discovered only when the money has already moved.

The payment regime exists to keep cash moving through the industry, and it does. But it rewards administrative precision over commercial merit, and it will keep transferring money from the disorganised to the organised until notices are treated with the seriousness the statute always intended.