Non-payment challenges in the construction industry

• The importance of having an effective payment regime for construction works.
• Summary and failures of the statutory payment regime.
• How smash and grab cases are more likely to arise.

Contractors in the UK construction industry have for a long time worked on small profit margins, which has been a factor in the high turnover of contractors and regular disruption to construction projects. Today, high inflation, the increasing cost of energy and the shortage of some construction materials, when added to the history of fine margins, makes for financial precariousness across the industry. So, in that climate, the prompt payment (or non-payment) for construction works, is often a matter of trading life or death. Moreover, with lengthy supply chains in construction, it doesn’t take long for payment problems to have a widespread impact.

In this article we look at how legislation and industry best practice try to manage payment for construction works and how, despite that, a