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How to Challenge an Underpayment on a Construction Project

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How to Challenge an Underpayment on a Construction Project

Underpayments are one of the most common triggers for construction payment disputes, often leading to adjudication. Whether you’re a developer, main contractor or subcontractor, knowing how to challenge an underpayment can make the difference between recovering rightful payment or writing off thousands.

This guide outlines the steps you should take and the quickest route to resolving a dispute.

 

  1. Identify the Basis of the Underpayment

Underpayments typically arise from:

  • Rejected or undervalued variations
  • Adjustments to measured works
  • Withheld payment due to alleged defects
  • Errors in the application
  • Contractual misunderstandings
  • Invalid or missing payment notices

Understanding why payment was reduced is essential before responding.

 

  1. Review Contractual Entitlement

Check:

  • Contract terms
  • Payment schedule
  • Valuation rules
  • Evidence required
  • Notice procedures

Many underpayment disputes hinge on improper notices or misinterpretation of the contract.

 

  1. Gather Evidence

Well-organised evidence strengthens your position, especially if adjudication becomes necessary.

Key documents include:

  • Original contract and amendments
  • Payment applications
  • Variations and instructions
  • Daily records and timesheets
  • Emails and correspondence
  • Valuation breakdowns

 

  1. Respond Promptly and Professionally

Before escalating:

  • Seek clarification from the other party
  • Provide supporting records
  • Highlight contractual obligations
  • Request re-review or re-measurement

Often, a calm but firm response triggers a reassessment.

 

  1. Consider Adjudication if Payment Is Still Withheld

Under the Construction Act, you have a statutory right to adjudicate payment disputes at any time.

Adjudication is:

  • Fast (28 days)
  • Cost-effective
  • Binding (unless later revised)
  • Suitable for both claimant and respondent

Precision Consultancy regularly acts for all parties in underpayment adjudications.

 

  1. How Precision Consultancy Can Help

We support:

  • Developers
  • Main contractors
  • Subcontractors

With:


✔ Valuation reviews
✔ Quantum evidence
✔ Preparation of Referral/Response
✔ Strategy and negotiation

If you believe you’ve been underpaid, contact Precision Consultancy for a free dispute triage call.